River Campus lawsuit gets dismissed by circuit judge

But any city financial support may bring new legal action

By Mark Bliss ~ Southeast Missourian

A circuit judge on Friday dismissed Cape Girardeau businessman Jim Drury's second legal challenge to the River Campus arts school project.

It was the city's second legal victory in the past six months and, city officials say, could help get the $36 million project rolling again.

"We are extremely happy with the decision," Mayor Jay Knudtson said after meeting with city staff and lawyers at City Hall. "It is time to move on."

But Drury's Cape Girardeau attorney, Walter S. Drusch, said his client -- while disappointed in the ruling -- likely will file another lawsuit if the city commits funding to the project.

Drury filed the lawsuit on Jan. 22 in Cape Girardeau County Circuit Court. Drury contended the city council ignored a Dec. 31 funding deadline and extended an agreement with Southeast Missouri State University on the River Campus project in violation of the state's Hancock Amendment, which limits growth in state revenue and requires most tax increases to go to a public vote .

The city disagreed and moved to have the suit dismissed.

Circuit Judge Keith Sutherland of Warren County heard oral arguments from both sides during a hearing Friday in the Common Pleas Courthouse in Cape Girardeau. At the conclusion of the hearing, the judge dismissed the lawsuit but gave Drury 30 days to file an amended petition.

Raising more arguments

Drusch said his client could raise other legal arguments in connection with this lawsuit in an amended petition but that no decision has been made yet on whether to do so.

Even if there is no further legal action on this lawsuit, Knudtson said the city council won't commit $8.9 million in city motel and restaurant tax money to the project until Southeast Missouri State University can guarantee that state and university funding are in place for the project.

State funding is expected to pay for $16.5 million of the cost with the university contributing $10 million and the city the other $8.9 million.

But state funding woes have put at least some of that money in question, the mayor said.

Knudtson, who has met privately with Drury at least eight times in recent months, said he still would like to reach an out-of-court "compromise" that would allow the Cape Girardeau businessman to support the project.

"It is my goal to work with him instead of against him," Knudtson said.

But Drusch said he doesn't know what compromise could be fashioned in this case.

Legal threats

Don Dickerson, president of Southeast's board of regents, said the city and university need to move ahead with the project and not be held hostage to legal threats.

The university wants to turn the grounds of the former Catholic seminary overlooking the Mississippi River into a visual and performing arts school that would include a new university museum, a theater, and classrooms.

Knudtson said the project on Morgan Oak could help boost development on the city's south side. "We have an opportunity to develop an area of town that will be the gateway to the city from the new bridge," he said. The site is next to the Bill Emerson Memorial Bridge that's currently being constructed to replace the existing river bridge.

Dr. Ken Dobbins, university president, said the project not only would provide a needed arts campus but would free up space on the main campus several blocks away. That's important since the university's enrollment has jumped by 1,400 students since 1994, he said.

"As we look forward to growing to 10,000 or more students, we need to have that venue so we can free up space on campus here for our accreditation needs and the need for additional classrooms," Dobbins said.

The legal hurdles so far haven't stopped the university from raising private money for the project. "We have around $7 million in pledges and cash toward the $10 million we are looking for," Dobbins said. "We think that is excellent when there has been a lawsuit pending."

The Missouri Supreme Court in February upheld the legality of two Cape Girardeau city ordinances dealing with tax funding for the project.

One of those ordinances authorized the city to enter into an agreement under which the university through a state agency would issue bonds that the city would pay off.

That measure was prompted by a November 1998 election in which city voters raised the motel tax and extended the restaurant and motel taxes to 2030, but failed to give the needed super majority to a bond issue to help fund the River Campus project.

Drusch has argued that the city would be pulling an unconstitutional end-run around the will of the voters by paying for bonds issued through the university.

Drusch said the Missouri Supreme Court concluded the indebtedness issue couldn't be subject to a legal challenge unless bonds have been issued. He said Drury is still prepared to raise that issue in a future lawsuit.

"The legal challenge is definitely still there," he said.

mbliss@semissourian.com

335-6611, extension 123