JUDGE REMANDS DRURY SUIT BACK TO CIRCUIT COURT

Cape Girardeau businessman Jim Drury's lawsuit to block the city from spending tax money on the River Campus project has been returned to circuit court where it was originally filed.

Last April, Drury and his MidAmerica Hotels Corp. filed a lawsuit in Cape Girardeau County Circuit Court against the city of Cape Girardeau.

The city had the case moved to federal court last May, but Drury's lawyer, Walter S. Drusch of Cape Girardeau, argued the suit should be heard in circuit court.

A federal judge has agreed. U.S. Magistrate Lewis Blanton ruled Thursday the suit should be heard in circuit court.

Blanton ruled the federal court lacks jurisdiction under the Tax Injunction Act.

"It is with reluctance that the court is ordering this case remanded to the circuit court because of the time and effort already expended," the judge said in his nine-page ruling.

"A saving grace is that the parties in the pleadings and briefs have extensively developed the issues in a record approaching 500 pages," Blanton said.

Drusch said he and Drury were pleased with the judge's decision.

"We are pleased to have the matter remanded to the state court because all of the points raised in our petition have to do with the laws and cases of the state of Missouri," said Drusch.

"We feel the Missouri courts are better suited to consider these state tax issues," he said Friday.

Mayor Al Spradling III, however, said the ruling further delays the city's efforts to move ahead with the city's share of funding for Southeast Missouri State University's River Campus arts school.

"It is a delaying tactic," he said. "That's all it is. We want a quick resolution."

Drury's lawsuit centers around a November 1998 election in which city voters approved a measure hiking the motel tax and extending the life of the motel and restaurant tax to Dec. 31, 2030.

A hike in the motel tax was designed to generate money to pay off a proposed $8.9 million bond issue to fund the city's share of the River Campus project. But the bond issue proposal in the same election received 53 percent approval, short of the 57 percent needed to pass.

Since then, the city and university have said bonds could be issued through a state agency rather than by the city. The motel tax revenue would be used to pay off the bonds.

Drury has argued the city is collecting an illegal tax. In conjunction with his lawsuit, he has paid his motel taxes under protest.

As a result, the city can't spend the money, even for the operation of its Convention and Visitors Bureau, Spradling said. It also can't be used to help pay off the bonds for the Show Me Center, the Shawnee Park complex and the Osage Community Centre.

Drusch said Drury wants the city to spend its tax money on city projects rather than university projects.

The university, said Drusch, could find a way to fund the $36 million project without any city funding. The state is expected to pay 50 percent of the cost. The university is looking for private donations to help fund development of the visual and performing arts campus overlooking the Cape Girardeau riverfront.