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Scottrade
Home›Scottrade›Scottrade litigation proves you can’t fight Town Hall – even from within

Scottrade litigation proves you can’t fight Town Hall – even from within

By Tim Kane
December 11, 2017
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  • STEVE TRUESDELL
  • Cara Spencer settled her lawsuit against the City and the St. Louis Blues last weekend.

Over the past week, the owners of the St. Louis Blues have pushed the last two hurdles between them and a veritable heap of taxpayer money. And they did it in a way that leaves no doubt who runs this city.

He is the one who can afford the most aggressive lawyers.

Faced with two positions of principle against a donation of money for the Scottrade Center that could cost St. Louis taxpayers $ 107 million, the Blues fought hard. Through their lawyers, they threatened City Comptroller Darlene Green with contempt of court and fines of up to $ 1,000 a day for wanting to keep their documents in receivership while appealing. . Then lawyers threatened Alderman Cara Spencer with their own six-figure bill, all because Spencer dared to take legal action against the taxpayer-funded manna.

These kinds of threats tend to get people’s attention.

And so, last week, Green released the documents. Spencer settled the lawsuit. The Blues will get their renovations done, and you and I will be stuck with the bill. Another day, another private entity plundering the public treasury. That’s life in Saint-Louis.

But before we close this chapter and resign ourselves to paying $ 107 million to host an already profitable franchise, it’s worth remembering how terrible this deal is.

Late last year, the team approached the Aldermen Council for legislation to authorize $ 64 million in bonds to fund renovations to the Scottrade Center. Their timing couldn’t have been better – progressives in the city were already busy fighting a plan to raise taxes to pay for an MLS stadium. A hotly contested mayoral election has had council members both distracted and fractured.

And it wasn’t just that Mayor Francis Slay’s longtime chief of staff Jeff Rainford was the starting point for the Blues. The campaign of chairman of the board of directors Lewis Reed, himself mayoral candidate, pocketed a donation of $ 100,000 from a minority owner of the team just a week before the vote, joining the $ 75,000 that ‘he had previously garnered from various members of the owners team.

Then-alderman Antonio French, by far the most acerbic critic of the proposal, noted that the Blues were benefiting from the use of Scottrade without paying taxes or rent to the city, the apparent owner of establishment. He noted that the Blues owners enjoyed not only the team’s games, but other events at the center as well. Then he asked for a copy of the lease.

He never had one. But in seeking to clarify which parties are responsible for what, under the terms of the 1992 agreement, he obtained this statement from Husch Blackwell lawyer David Richardson: The lease “is pretty much silent on major improvements like this one. -this”. (See 1:51 in the video below for the key quote.)

Who could dispute that? Especially when the city seemed hopelessly unable to produce documents to confirm or deny this claim? Just ask Cara Spencer; The alderman filed for Sunshine Law and still couldn’t get the thing.


Helped by the confusion, Reed passed the bill less than a month later. Indeed, it was approved so quickly, that in the end, even Reed decided it had been too quick – or at least politically toxic – and voted no.

It was only after that that the lease was dug up, and – go figure – it wasn’t silent at all. As Spencer learned after a third party finally slipped him a copy, “repairing and replacing improvements” is the obligation of the tenant – the owners of the Blues.

scottrade_leasehighlite.png

“When I finally got my hands on the lease, I was disgusted,” she told the RFT in August.

Because of these lease terms, Spencer believed the $ 106 million in taxpayer money was a “gift” to the private Blues organization – which she said could make it constitutionally illegal. from Missouri. It was then that she, along with activist Jeannette Mott Oxford and former city councilor James Wilson, filed a complaint. Lawyer Eric Vieth handled the case free of charge.

Now reasonable people could debate the merits of the lawsuit. On the one hand, the city certainly benefits from having Blues games (and concerts) downtown. On the other hand, at this point the city has crossed the line from generous benefactor to total sucker. That’s why we have judges: both sides have their point of view, and it takes a legal expert to figure it out.

But the Blues have raised the bar. Arguing that Spencer’s lawsuit was “frivolous, without substantial legal basis, reckless, punitive, or in bad faith,” lawyers for Husch Blackwell – yes, the same firm whose partner distorted the terms of the lease at that meeting of the committee in January – recently demanded that the parties there should be grappling with their legal fees. It was not an empty threat. Husch Blackwell’s partners order some of the highest hourly rates in the city.

Spencer’s team had lost some of their arguments, as Husch Blackwell’s attorneys pointed out in their case. But it’s not as if the expensive lawyers managed to get the lawsuit overturned. He was due to be tried this week.

Nevertheless, the demand for fees has changed the situation. As Spencer admits, the prospect of having to pay what was surely a giant legal bill was horrific. “I cannot put this burden on my family,” she said.

It is no coincidence that Spencer, Oxford and Wilson settled their case so soon after Green signed the bond documents. On the one hand, St. Louis Circuit Court judge Joan Moriarty was hearing both cases – and in ruling against Green, the judge suggested at least some sympathy for the Blues’ legal arguments.

Second, Green’s intransigence had given the other group some cover. Once Green signed the bond documents, Spencer’s lawsuit was “the only obstacle,” in the team’s words, to issuing the bonds. And with the GOP’s proposed tax reforms effectively banning tax-exempt bonds like those involved in Scottrade’s funding, the team has made it clear that they are determined to stop at nothing to secure the deal before they can. ‘it’s not too late.

On the threat of attorney’s fees, Spencer says: “We knew they only had a five percent chance of winning. [them]. But even if the odds were slim, the reality of this situation would be incredibly devastating. ”

Not two weeks after the Blues asked for his legal fees, the parties were settled.

The point is, the board is to blame for the terrible Scottrade deal. Once President Reed got his votes, the deal was done. And what a deal – based in part on City’s breathtaking generosity to the team, Forbes recently valued the Blues at $ 450 million, up 45% from the previous year.

Still, it’s striking how many parties lined up in opposition after that – and how little progress they were able to make in ensuring that the deal was reconsidered in light of the lease or sources of justice. financing alternatives to explore. Everyone from the longtime city comptroller (Green) to the city councilor at the time of the signing of the lease (Wilson) to a seated alderman (Spencer), have done everything in their power except ruin personal, to stop spending. It just wasn’t enough.

You could argue that their cause was pipe dream, that they never had any luck – and that they were wasting everyone’s time by refusing to believe it. You could argue that if you can’t afford high profile lawyers, you shouldn’t sue. You could, I suppose, even argue that we need our horseflies willing to risk destroying their own lives and ruining their families to carry on the business they believe in.

But you can’t pretend things aren’t broken at Town Hall. We’ve all seen the lease now. We know who was supposed to pay – the same parts that are already benefiting from the expensive upgrade. And it’s maddening that a broke (and shattered) city is nonetheless the party on the hook.

Sarah Fenske is the editor of the Riverfront Times. Email her at [email protected] or follow her on Twitter @sarahfenske

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  4. Protective order sought in Scottrade Center lawsuit | Metro
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