Millions of dollars going toward renovations at the Scottrade Center could be ruled unconstitutional. That's the hope behind a lawsuit filed in St. Louis Friday.
Plaintiffs say the city is illegally paying $105.9 million dollars in public money to help the St. Louis Blues Hockey Club spruce up the downtown venue.
The question essentially comes down to who owns the building and should be responsible for the upgrades. Some city leaders feel it's on the city. But the 26-page lawsuit claims the job is up to the Blues and their partners.
In February the St. Louis Board of Aldermen approved the use of public money to pay for upgrades to the Scottrade Center. A move 20th Ward Alderwoman and co-plaintiff Cara Spencer voted against.
“I found this to be a very frustrating proposal to allocate and obligate the city to repay $106 million to upgrade a privately-controlled, for-profit entity,” said Spencer.
Back in 1992 the city reached an agreement with the St. Louis Blues to clear the land for what is now the Scottrade Center. In turn, the team paid to build the facility and signed a 50-year lease. The team pays the city one dollar per year in rent, has full control of the property and receives all profits from events held there.
According to the lawsuit, the city holds the "Bare Legal Title" to the property.
It's now up to St. Louis Circuit Judge Robert Dierker, Jr. To decide who's on the hook to revamp the building.
Plaintiffs say approving public money to upgrade the facility was the wrong move for cash-strapped St. Louis.
“I'm not saying this was ill-intended or anything of the sort. It's just been done the wrong way and it will hurt the city,” said Erich Vieth of Campbell Law.
Vieth says the ordinance passed by the Board of Alderman allowing city money for the upgrades violates Article VI of the Missouri Constitution, "in that it permanently grants substantial public money to a for-profit corporation for the purpose of assisting that corporation to make further profits for itself."
The long-term answer, Spencer says, is a broader-reaching partnership with surrounding counties.
“What I have been pushing for from the beginning is a regional solution to the financial obligations for these regional assets.”
The city of St. Louis is also named in the lawsuit. Deputy Counselor Michael Garvin said in a statement:
“While we won't comment on the merits of this particular litigation, this ordinance was approved by the Land Clearance for Redevelopment Authority, the Board of Aldermen, the Board of Estimate and Apportionment and signed by then-Mayor Francis Slay. We will vigorously defend the City, its ordinances and agreements."
Mike Caruso, spokesman for the St. Louis Blues, sent Five on Your Side a statement on behalf of co-defendant Kiel Center Partners, L.P.:
“The ordinance authorizing a financing agreement for the renovation of the city-owned Scottrade Center, and the issuance of bonds to fund those improvements, was passed by the Board of Aldermen and signed into law by the Mayor of St. Louis. This lawsuit, spearheaded by one member of the Board of Aldermen in a clear attempt to counter the consensus of her fellow elected officials, is frivolous, disappointing and embarrassing to our city. It also has the potential to be extremely costly, not only to taxpayers, but to the regional and national reputation of St. Louis. As the comptroller has a legal obligation to sign the financing agreement, as directed in the ordinance, we have asked her to sign and execute the agreement immediately so the project may proceed for the betterment of our community and its economy.”
Currently there are renovations happening at Scottrade. However, City Comptroller Darlene Green has refused to issue the bonds for the work, so it's not clear who is paying for the project.
A statement was posted to the Comptroller's website Friday Afternoon:
"The city faces a credit crisis having been downgraded twice in less than six months by Moody's Credit Rating Agency. In January, Comptroller Green issued a letter encouraging the project team to adhere to the broad framework that states: “the city's current budget revenues should not be considered for use as part of any economic incentive package when planning financing for the project. The economic incentive package should not include adding any new city debt or using the city's credit or current revenues as a backdrop.”
The Comptroller calls on all parties to work together to upgrade Scottrade Center within a framework that protects the City of St. Louis's credit and does not reduce current revenues meant for delivering essential city services, such as public safety, to our taxpayers."
Scottrade Center Lawsuit on Scribd