KCMO attorney: Petition to force vote on convention hotel “unconstitutional on its face”

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Back in 1982, Branson, Missouri, struck an agreement with a developer to build a hotel at the site of that town’s old airport. As an inducement, the city gave the developer a break on paying for access to the municipal sewer system.

So when Branson later turned around and asked the developer to pay more than $100,000 in fees to hook up to the city’s sewer system and other building permits, the developer sued, saying the city had walked back its responsibilities under a legally binding lease.

The developer ultimately won, setting a legal precedent that Kansas City is using today to try and flick away a petition initiative process that wants to put about $165 million in public financing for a new downtown convention hotel to a public vote.

Kansas City’s Ethics and Legal Review Committee on Monday recommended passage of an ordinance that would not accept a petition initiative to put the convention hotel up to a public vote. In doing so, the full Kansas City, Missouri, City Council is expected to vote November 12 on the committee’s recommendation.

Kansas City attorney Bill Geary told the lawyerly committee (its members are lawyers Sly James, Kevin McManus, Alissia Canady and Dan Fowler) that the petition initiative was “unconstitutional on its face.” Geary explained that the petition seeks to potentially breach the contract that the city struck with the 800-room convention hotel’s developers, much like the Ozarks resort town once turned its back on its own deal with a hotel developer in the 1980s. Geary added that the petition potentially violates tax-increment-financing statutes, which are governed by Missouri law.

In essence, the city is arguing that the petition looks to force the city to break a legally binding contract as well as try to work around state laws.

Dan Coffey attended Monday’s hearing. He’s a Kansas City resident who is the public face of a citizen watchdog group called Citizens for Responsible Government. CFRG initiated the petition drive to seek a public vote on the use of public money on the convention hotel.

CFRG rounded up 2,007 signatures, enough to surpass the 1,708 now required for a valid petition initiative, to put the matter on the April ballot, alongside the question of whether to renew the Kansas City earnings tax.

Coffey said afterward that the committee hearing presented only one side of the issue.

“It’s an opinion — one guy’s opinion,” he told The Pitch. “We have people that have a different opinion.” 

Coffey says CFRG has attorneys among its members, but that the group hasn’t decided on whether it will try to take the city to court if the full council ultimately dispenses with the petition initiative.

“The ball’s in their court,” Coffey says.

Also in the city’s court is the possibility of a lawsuit by the hotel developers if the matter goes to an election and the public votes to discard public incentives tied to the project.

Geary said the city’s damages could include $250,000 in liquidated damages, but the hotel developer would likely try to argue that the city has far greater exposure than that on account of the year’s worth of work done trying to tee up the hotel deal.