Posted by: Patricia Salkin | July 24, 2013

Missouri Supreme Court Upholds Redevelopment Plan Pursuant to State TIF Act Finding it is Consistent with the Comprehensive Plan, Complied with Financing Standards and Allegation of Lack of Specificity of Project was Raised Too Late

Northside Regeneration, LLC proposed a redevelopment plan on 1500 acres in the City of St. Louis (“City”) pursuant to a tax increment financing (“TIF”) plan.  The project would cost $8.1 billion over a period of 23 years.  The City authorized the plan and passed ordinance 68484, which provided for the City’s approval of the plan, and 68485, which authorized the City to enter into an agreement with Northside to execute the plan.  Plaintiffs, Bonzella Smith and Isaiah Hair, filed a petition requesting a preliminary injunction against Northside and the City to prevent the redevelopment plan from being executed.  Intervenors, Cheryl Nelson and Elke McIntosh, filed a petition for declaratory judgment alleging that the plan was in direct violation of a provision of the TIF plan.  Neither plaintiffs nor intervenors alleged in their petitions that the redevelopment plan was invalid for failing to include a specific redevelopment project.  Later, in a motion in limine filed on the first day of trial, Plaintiffs raised the issue that the redevelopment plan failed to include a specific redevelopment project as required by the TIF Act.

The trial court, while acknowledging that the issue was not directly addressed in the pleadings of the case, declared that the ordinances were in conflict with the TIF Act for failure to include “defined redevelopment projects.”  The trial court determined that the plaintiffs properly raised the issue in their motion in limine and by introducing the ordinances into evidence.  Additionally, the court denied Plaintiffs’ and Intervenors’ motions for attorney’s fees.  Defendants appealed the trial court’s decision and Plaintiffs and Intervenors cross-appealed.

On appeal, the Supreme Court of Missouri explained that the “specific project” issue should have been raised in the original pleadings, but may also have been raised at trial by implied consent.  The purpose of a pleading (here, the petition) is to define the issues to be tried and to provide notice of same to the adversary.  The issue is preserved only if first addressed in the pleading.  A motion in limine seeks the “court’s opinion as to the admissibility of the evidence” and is not a pleading where an issue can be initially raised.  According to the appellate court, both Plaintiffs and Intervenors failed to provide adequate notice to their adversary of the “specific project” issue.  Both failed to raise the issue in their petitions, so the issue was never preserved.  Additionally, since an issue cannot first be raised in a motion in limine, and Plaintiffs did not attempt to amend their petition to address the issue, the issue was not properly raised in the motion, either.

The court further found that the issue was not raised by implied consent.  If evidence is introduced at trial that solely relates to some new issue, with no bearing upon other issues in the case, and no other party objects to the evidence, then the issue may have been tried by implied consent.  Here, Plaintiffs sought to demonstrate implied consent by (1) introducing the ordinances as evidence at trial and (2) raising the issue during the direct examinations of two City employees.  The ordinances here did not relate solely to the “specific project” issue.  Since the ordinances related to numerous other issues, the court held that this issue was not tried by implied consent.  The court also found that the issue was not raised during the examinations of the City employees.  Plaintiffs’ counsel did not specifically address any statutory provisions regarding the “specific project” issue during the questioning of the witnesses but instead asked general questions regarding the redevelopment plan.

Plaintiffs’ cross-appeal alleged that the trial court should have found the ordinances invalid on additional grounds.  Specifically, Plaintiffs’ first argument was that the ordinances failed to include adequate evidence of financing for the redevelopment plan.  Section 99.810 of the TIF Act requires that the redevelopment plan include evidence of commitment to finance the project.  Since the plain language of the statute does not require evidence of specific dollar amounts, substantial weight must be given to the legislative body’s conclusion that the evidence of financial commitments is sufficient.  This conclusion may only be overturned if the lack of evidence leaves no room for fair debate.  Defendants in the present case provided evidence of commitment from the Bank of Washington to finance at least part of the redevelopment project.  Every trial witness agreed that it would be unreasonable to expect a firm commitment for the entire project, given such a large loan amount over a 23-year period.  The appellate court held that the ordinances did in fact comply with the TIF Act by providing sufficient evidence of financial commitment.

Plaintiffs’ next argument was that the ordinances failed to comply with the City’s comprehensive land use plan as required by the TIF Act.  According to the TIF Act, a redevelopment plan must conform to the comprehensive land use plan of the municipality.  A comprehensive plan provides recommendations and guidance for land use and is meant to adapt to changes in conditions or policies.  The redevelopment plan must be “generally consistent” with the comprehensive plan, but does not necessarily need to conform in every aspect.  In its approval of the ordinances, the City determined here that the redevelopment plan did conform to the City’s comprehensive plan.  The appellate court also found no inconsistencies between the two.  Since Plaintiffs did not present any evidence to the contrary, the court held that the redevelopment plan conformed to the City’s comprehensive plan.

Smith v. City of St. Louis, 395 S.W.3d 20 (4/9/2013).

The opinion can be accessed at: http://www.courts.mo.gov/file.jsp?id=60893


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