The Platte County Commissioners have turned to the courts to settle the question of who is to pay for the parking garages at Zona Rosa.
In a press release issued Friday, Nov. 2, the Graves Garrett law firm announced it had filed a petition seeking a declaration from Missouri’s Sixth Judicial Circuit regarding the legality of a demand that the County repay bonds issued in 2007 for infrastructure at Zona Rosa.
Platte County versus UMB Bank and the Industrial Development Authority of Platte County was filed Nov. 2 by attorney Todd Graves with a hearing scheduled for Friday, Feb. 8, 2019 in front of judge James Van Amburg.
According to the attorney’s release, prior to the lawsuit, the bond trustee UMB Bank demanded in a notice of default issued Monday, Sept. 24 that Platte County immediately appropriate and use taxpayer funds to pay the amount of revenue shortfall on the bonds.
In the petition, Platte County asserts that, contrary to the trustee’s demand, it has no obligation to make payment on the bonds, according to the release. Because the bonds issued for Zona Rosa are revenue bonds, the sole source of funding for repayment comes from a 1 percent sales tax within Zona Rosa. Platte County further asserts that the trustee’s demand is contrary to the Missouri Constitution, which prevents the county from incurring debt without taxpayer approval. According to the lawsuit, the Platte County Commission has sole discretion on whether to appropriate and use taxpayer funds to pay the bonds. This decision will be based on the best interests of the taxpayers.
According to the release, no decision has yet been made by the commission. Previously, however, commissioners have stated in public session that without a “long-term sustainable plan” the commission is unlikely to authorize payment. In recent weeks, the county’s credit rating took a serious hit due to this position statement.
“With a vested interest in Zona Rosa’s success, the county commission remains open to finding a long-term solution for these bonds, but with a limited discretionary budget, making these payments would have damaging effects on the county’s ability to provide essential services to its citizens,” Graves said in the release. “We have asked the court to provide a declaratory judgment regarding Platte County’s legal rights, which will help to resolve this matter responsibly and efficiently.”
Commissioners have issued no further comment on the suit.
The court documents state that the new owners have asserted they have no obligation to make up revenue shortfalls.
In late October, Trademark Property Company — the management firm hired in September by Zona’s new owners, TPG Sixth Street Partners — hosted a forum of industry experts to conduct a “re-visioning” of Zona Rosa, which opened in 2004.
Potential investments could include the addition of hotels, an increase in apartment housing and additional public spaces for both children and adults.
About $1 million in investment has been initially promised, but commissioners confirmed that the improvement talks did not include coverage of the shortfall in sales tax collections. Tax collections have come up short every year, but former ownership covered the shortfall until last year.
The county received notice from the bond trustee on Friday, Oct. 12 that revenues to make the bond payment were short more than $1 million. The bond payment due in December is $1.4 million.
Platte County finds itself into this situation due to a 2-1 vote of the sitting commission in 2007.
As reported in the July 18, 2007 issue of The Citizen, then executive director of the Platte County Economic Development Council Pete Fullerton and then superintendent of the Park Hill School District Dr. Dennis Fisher were both present at the commission’s regular meeting that week and voiced their support for the county’s entry into the agreement.
“County auditor Siobhann Williams said she had done an extensive analysis of potential risks to the county from the proposal and said it was a good, low-risk partnership,” according to the Citizen article, which appeared on page one of that issue. “County attorney Bob Shaw said he had reviewed the papers as well and was satisfied with the county’s role.”
While presiding commissioner Betty Knight and second district commissioner Jim Plunkett voted yes, first district commissioner Tom Pryor voted no.