Opinion
No. ED77823
FILED: May 29, 2001
APPEAL FROM THE CIRCUIT COURT OF STE. GENEVIEVE COUNTY HON. KENNETH PRATTE.
Steven L. Wright, WRIGHT GRAY, 2716 Forum Blvd., Suite 3B Columbia, MO 65203, for Appellant.
James E. Mello, Shulamith Simon, SCHLUETER, HAYWOOD, BICK, ARMSTRONG TEASDALE LLP KISTNER, P.C., One Metropolitan Square, Suite 2600, St. Louis, MO 63102-2740; Jeffrey T. McPherson, 7700 Bonhomme Avenue, Suite 450, St. Louis, MO 63105 for respondent.
Lawrence E. Mooney, P.J. and Sherri B. Sullivan, J., concur.
Ste. Genevieve School District R-II (School District) and Mikel A. Stewart (Stewart), a resident taxpayer of School District and the city and county of Ste. Genevieve, (collectively Plaintiffs) appeal the trial court order granting the motions of Board of Aldermen of the City of Ste. Genevieve (City) and Golden Management, Inc., (Golden) (collectively Defendants) to dismiss Plaintiffs' petition for a declaratory judgment as to the validity of an amendment to a tax increment financing (TIF) plan for lack of standing and failure to state a claim. We affirm.
On appeal, Plaintiffs contend the trial court erred in dismissing their petition for declaratory relief for: (1) lack of standing, because the petition pleaded facts establishing that School District and Stewart had an interest in the subject matter of the suit and a threatened or actual injury sufficient to support standing; and (2) failure to state a claim because the petition pleaded facts establishing that School District and Stewart were entitled to a declaration concerning the validity of the challenged amendment under the statutes and constitutional provisions cited, and, if true, showed that they were entitled to the relief requested. In their points, Plaintiffs rely on their contention that the petition alleged facts that demonstrate: (a) Defendant adopted an amendment to the Point Basse Redevelopment Project (RPA 3) pursuant to the TIF Act without first complying with mandatory statutory provisions requiring School District representatives to be reappointed to the Tax Increment Financing Commission of Ste. Genevieve, Missouri (TIF Commission), to participate in required hearings and to vote on proposed amendments prior to the adoption of an amendment to a redevelopment project; (b) that amounts that would otherwise be collected as school revenues within the area of RPA 3 would instead be collected as payments in lieu of taxes (PILOTs) and expended for the purposes established in the amendment; (c) that the PILOTs collected would be expended to fund or reimburse the costs of private parties to purchase and improve private property to the extent that such expenditures amount to the illegal use of public funds for private purposes; and (d) that Stewart is a taxpayer of the school district and the City.
When reviewing the dismissal of a petition for failure to state a claim, the pleading is granted its broadest intendment, all facts alleged are treated as true and the pleading is construed in favor of the plaintiff to determine whether the averments invoke substantive principles of law which entitle the plaintiff to relief. L.C. Development Co., Inc. v. Lincoln County, 26 S.W.3d 336, 339 (Mo.App.E.D. 2000). An exhibit to a pleading is a part thereof for all purposes. Rule 55.12. The conclusions of the pleader are not to be considered in determining whether plaintiffs have stated a claim upon which relief can be granted because the averment of a legal conclusion is not a statement of an issuable fact and is to be treated as no statement at all. Berga v. Archway Kitchen and Bath, Inc., 926 S.W.2d 476, 478 (Mo.App.E.D. 1996).
In 1992, the TIF Commission was constituted and recommended that City adopt Ordinance 2675 establishing a redevelopment area (RPA 1). The Commission also recommended City's approval of a redevelopment plan titled the "Redevelopment Plan for Valle Springs Tax Increment Financing District" (Redevelopment Plan) and authorization of redevelopment activities within RPA 1 in accordance with the Sections 99.800 to 99.865 RSMo 1994, as amended (TIF Act) (all further references herein shall be to RSMo 1994, as amended, unless otherwise indicated). City adopted Ordinance No. 2675 on December 22, 1992.
Upon recommendation of the TIF Commission, City adopted Ordinance 2939 on December 11, 1997. Ordinance 2939 amended the Redevelopment Plan to alter the boundaries of the redevelopment area established by Ordinance No. 2675 to include new redevelopment project areas, RPA 2, RPA 3 and RPA 4 (collectively with RPA 1, Redevelopment Area). Ordinance 2939 further amended the Redevelopment Plan to provide for additional redevelopment projects within the Redevelopment Area, including the construction of water, storm water and sanitary sewer improvements within RPA 3. The Redevelopment Plan approved the payment from TIF Revenues of certain redevelopment project costs incurred within the Redevelopment Area, including costs associated with property acquisition, site work, sanitary sewer, water, storm sewers, street, curb and gutter improvements.
Following the City's publication of a notice soliciting proposals for redevelopment of a portion of RPA 3, Golden submitted a proposal to the City for redevelopment of Pointe Basse Plaza within RPA 3. The proposal included the acquisition of property, site preparation, storm water improvements, relocation of utilities, road and signalization improvements, relocation of certain tenants and parking lot improvements.
On September 23, 1999, the City passed Ordinance 3057, which amended the Redevelopment Plan and authorized and directed the Mayor of Ste. Genevieve to execute the Redevelopment Agreement between City and Golden on behalf of the City.
In the preamble of Ordinance 3057, City found that "it is necessary and advisable and in the best interest of the City and of its inhabitants to (1) accept the Proposal, (2) designate Golden Management, Inc. as developer of the Plaza Project, (3) authorize and approve the Redevelopment Agreement and the transactions contemplated thereby, (4) authorize the issuance of the Pointe Basse TIF Notes, and (5) amend the Redevelopment Plan."
In Section 3 of Ordinance 3057, the City amended the Redevelopment Plan in accordance with Exhibit B thereto, a document replacing Section II.E.1. of the Redevelopment Plan and incorporating the changes proposed in Ordinance 3057. City found the amendment of the Redevelopment Plan set forth in Exhibit B did not enlarge the exterior boundaries of the Redevelopment Area, substantially affect the general land use established by the Redevelopment Plan or change the nature of the redevelopment project. Further, Ordinance 3057 specified the redevelopment activities associated with the Redevelopment Plan which, prior to the adoption of Ordinance 3057, had not yet been specified.
Plaintiffs filed their petition for declaratory judgment naming City as the only defendant on November 23, 1999. Exhibits attached to the petition consisted of: (1) a copy of Ordinance 3057, including Exhibit B thereto; (2) a September 10, 1999 letter to Stewart from Ste. Genevieve City Administrator, Gary Edwards, setting forth a summary of the proposed changes to the Redevelopment Plan; and (3) a copy of the original estimated Redevelopment Project costs, Redevelopment Plan objectives and Redevelopment Project activities with the changes mandated by the adoption of Ordinance 3057 displayed by interlineation.
On December 23, 1999, City filed its Motion to Dismiss for: (1) lack of jurisdiction for failure to join Golden as a necessary party; (2) lack of jurisdiction because Plaintiffs have no standing to assert their alleged claims; and (3) failure to state a claim for relief as a matter of law. Plaintiffs filed their Suggestions in Opposition to City's motion on January 18, 2000. The trial court heard arguments on City's motion on the same day and ordered that Golden be added as a necessary party.
After being added to the petition and served therewith, Golden filed its motion to dismiss on February 25, 2000, and a memorandum in support on March 10, 2000. On March 21, 2000, the trial court heard further argument on Defendants' motions to dismiss and sustained them for want of standing and further found that, even if Plaintiffs had standing, their petition failed to state a claim upon which relief could be granted.
In their first point, Plaintiffs allege the trial court erred in dismissing their petition for want of standing because the petition pleaded facts establishing that they had a legally cognizable interest in the subject matter of the suit and a threatened or actual injury sufficient to support standing. Defendants argue that Plaintiffs had neither the pecuniary nor the personal interest directly in issue or jeopardy required to establish standing. They contend that even if a court ruled in Plaintiffs' favor, they would be in no different position and would realize no benefit.
Initially, we consider whether the trial court erred in dismissing Stewart for want of standing. Absent fraud or other compelling circumstances, to have standing a taxpayer must be able to demonstrate a direct expenditure of funds generated through taxation or an increased levy in taxes or a pecuniary loss attributable to the challenged transaction of a municipality. Eastern Missouri Laborers Dist. Council v. St. Louis County, 781 S.W.2d 43, 47 (Mo.banc 1989). Plaintiffs' petition alleges only that Stewart "is a resident taxpayer of the Ste. Genevieve School District R-II and the City and County of Ste Genevieve." Nowhere in the petition is it alleged that Stewart will personally suffer an increased levy in taxes or a pecuniary loss attributable to the challenged transaction of a municipality.
As Plaintiffs point out, the petition alleges that: an expenditure of funds that "would otherwise be collected by the district as school district property tax revenues will instead be collected as [PILOTS]"; Ordinance 3057 proposes the expenditure of public funds for private purposes; and the City's effort to grant the funds to a private party are illegal. However, paragraph 24 of the petition concedes that "[p]ayments in lieu of taxes under the TIF Act are not taxes, but are public funds." Pursuant to this concession in the petition, we conclude that Stewart is not challenging an expenditure of funds generated through taxation. Furthermore, the petition does not allege fraud and we find the allegations in the petition do not rise to the level of "compelling circumstances" sufficient to impart standing to Stewart to maintain this action.
In determining whether School District had standing, we apply a slightly different standard. In State ex rel. School Dist. of City of Independence v. Jones, 653 S.W.2d 178, 289 (Mo.banc 1983), our Supreme Court held that a school district imminently threatened with allegedly unlawful deprivation of their statutorily-mandated share of state school funds had standing via an action in equity, and therefore declaratory judgment, to challenge the statutory interpretation threatening such deprivation.
Pursuant to the TIF Act, "two members shall be appointed [to the TIF Commission] by the school boards whose districts are included within the redevelopment plan or redevelopment area." Section 99.820.2(1). The TIF Act further states that the TIF Commission "shall consist of the six members appointed by the municipality, except that members representing school boards and other taxing entities shall be appointed as provided in this section prior to any amendments to any redevelopment plans, redevelopment projects or designation of a redevelopment area." Section 99.820.2(7) (amended in 1998). Clearly, School District has statutorily-mandated representation on the TIF Commission that is specified and prioritized within the TIF Act. Therefore, it is clear that, under the TIF Act, School District is an intended participant in, and beneficiary of, decisions made by the TIF Commission and as such, has an interest in the application and construction of the TIF Act in determining when a redevelopment plan is altered and when convening the TIF Commission to authorize such amendments is required. Thus, School District's interest in the interpretation of the TIF Act is analogous to the interest of the school district in Independence and sufficient to warrant standing.
In their second point, Plaintiffs contend the trial court erred in finding that their petition failed to state a claim upon which relief can be granted. Because of our previous finding that Stewart lacked standing to bring the declaratory action, we will consider this issue only as it pertains to School District.
School District argues that the application of the provisions of the TIF Act to the undisputed contents of Ordinance 3057 demonstrates that School District is entitled to a judgment invalidating the amendment to RPA 3. School District contends it is entitled to such judgment because the amendment embodied in Ordinance 3057 was adopted without first appointing the TIF Commission, conducting hearings on the amendment and allowing the Commission to vote concerning a recommendation to the City as required by law.
The portions of the TIF Act that are of particular importance include Section 99.820.2(7) (amended in 1998) which provides for the composition of the TIF Commission. Another important portion of the TIF Act, Section 99.820.3, provides that "[t]he [C]ommission shall vote on all proposed redevelopment plans, redevelopment projects and designations of redevelopment areas, and amendments thereto." Finally, Section 99.825.1 provides:
After the adoption of an ordinance approving a redevelopment plan or redevelopment project, or designating a redevelopment area, no ordinance shall be adopted altering the exterior boundaries, affecting the general land uses established pursuant to the redevelopment plan or changing the nature of the redevelopment project without complying with the procedures provided in this section pertaining to the initial approval of a redevelopment plan or redevelopment project and designation of a redevelopment area
Defendants argue that all of the statutory provisions in the TIF Act should be read in pari materia and, as such, the last cited statutory provision determines the standard regarding when an amendment to a redevelopment project would require the authorization of a reconvened TIF Commission. Further, Defendants argue even though the petition alleges that Ordinance 3057 "changed the nature" of the redevelopment project or projects to be undertaken in RPA 3, that is a legal conclusion not supported by facts sufficient to establish a cause of action.
Statutory provisions relating to the same subject matter are considered in pari materia, and are to be construed together. Martinez v. State, 24 S.W.3d 10, 19 (Mo.App.E.D. 2000). Statutes in pari materia are intended to be read consistently and harmoniously. Derossett v. Alton and Southern Railway Co., 850 S.W.2d 109, 112 (Mo.App.E.D. 1993). As Defendants point out in their brief, Sections 99.820 and 99.825 are both part of the TIF Act, they both relate to redevelopment of substandard areas to foster economic growth and Section 99.820 specifically refers to Section 99.825. Therefore, we will consider the sections in pari materia and read them together.
Thus, it is clear that the language in Section 99.820.3 dictates that the TIF Commission shall vote on all proposed redevelopment plans, projects and amendments thereto. Since Ordinance 3057 was not a proposed redevelopment plan, or an amendment to a proposed redevelopment plan, but rather an amendment to an existing redevelopment plan already adopted by a previous ordinance, we apply the standard in Section 99.825.1 to determine whether the enactment of Ordinance 3057 required the prior authorization of the TIF Commission.
School District does not allege in its petition that Ordinance 3057 altered the exterior boundaries of the redevelopment area or that it affected the general land uses established pursuant to the redevelopment plan. Thus, the Section 99.825.1 standard is applicable only to the portions of the petition alleging that the adoption of Ordinance 3057 changed the nature of the redevelopment project or projects to be undertaken in RPA 3.
School District's petition alleges in pertinent part:
The Amendment as adopted by Ordinance 3057 changes the nature of the Redevelopment Project or Projects to be undertaken in Redevelopment Project Area Number 3 by substantially increasing the costs of such project or projects. The specific changes are shown by interlineation in a notice provided by the City to Relator (sic), which is attached to Exhibit 1.
The Amendment as adopted by Ordinance 3057 changes the nature of the Redevelopment Project or Projects to be undertaken in Redevelopment Project Area Number 3 by substantially changing the purposes for which payments in lieu of taxes and economic activity taxes will be used for such project or projects from purposes related to public infrastructure to the acquisition and improvement of private property by private parties.
Treating the factual allegations of paragraph 22 of School District's petition as true, the substantial increase in costs of the redevelopment project or projects to be undertaken in RPA 3 does not change the nature, that is the essential character, of the redevelopment project or projects in RPA 3. The application of the plain and ordinary meaning of Section 99.825.1, in particular the word "nature," does not indicate that an increase in cost alone results in "changing the nature of the redevelopment project" (RPA 3).
School District's allegations in paragraph 23 of its petition are directed to the use of TIF funds to cover the costs of property acquisition, site preparation, relocation of utilities, road/signalization improvements, relocation of tenants and parking lot improvements in RPA 3.
Section 99.805(14) provides:
"Redevelopment project costs" include the sum total of all reasonable or necessary costs incurred or estimated to be incurred, and any such costs incidental to a redevelopment plan or redevelopment project, as applicable. Such costs include, but are not limited to, the following:
(c) Property assembly costs, including, but not limited to, acquisition of land and other property, real or personal, or rights or interests therein
(f) Costs of construction of public works or improvements
(i) Relocation costs to the extent that a municipality determines that relocation costs shall be paid or are required to be paid by federal or state law[.]
Rules of statutory construction hold that legislative intent is to be determined from the clear language of the statute. State v. Sweeney, 701 S.W.2d 420, 423 (Mo.banc 1985). A non-exclusive list broadens and does not narrow or limit the application of the statute to the items contained therein. Id.
Clearly, the costs of property acquisition, site preparation, relocation of utilities, road/signalization improvements and relocation of tenants are included in the list defining "redevelopment project costs" contained in the TIF Act. Therefore, the use of TIF funds to pay for these activities would not change the nature of the redevelopment project or projects to be undertaken in RPA 3 by changing the purposes from public to private.
The final change in the projects to be undertaken in RPA 3 was the addition of the cost of parking lot improvements. Though Section 99.805(14) does not explicitly provide for costs related to the improvement of parking lots, we find such costs to be reasonable, necessary and incidental to the redevelopment projects in RPA 3 and to the Redevelopment Plan. JG St. Louis West Limited Liability Company, et al., Appellants v. City of Des Peres and West County Center, LLC, Respondents, No. ED77037, slip op. at 14 (Mo.App.E.D., filed January 2, 2001). It is logical that a shopping mall must provide parking for its customers to be a viable enterprise. Id. Thus, because the use of TIF funds to improve parking lots is included in our reading of Section 99.805(14), the changes made by Ordinance 3057 did not change the nature of the redevelopment project or projects to be undertaken in RPA 3. Therefore, the allegations in paragraph 23 of the petition amount to incorrect legal conclusions and fail to state facts sufficient for School District to state a claim for relief.
Judgment affirmed.