Mendelsohn gives Collinsville Crossing green light, again

Steve Korris Jul. 5, 2007, 11:55am

Madison County Associate Judge Ralph Mendelsohn stands by his decision to throw out a suit that would have blocked development of the Collinsville Crossing retail center.

At a June 29 hearing Mendelsohn denied a motion to reconsider an order finding that plaintiff Diane Tettaton lacked standing to sue the city.

Tettaton sued last year, claiming the city improperly arranged financing through loan notes that shoppers would pay off through sales taxes.

The city sponsored the project under new state law authorizing business redevelopment districts with special sales taxes to pay off bonds.

In a deposition Tettaton said she belonged to the meat cutters union and her union representative asked her to sue the city.

She said she probably would not have sued if the development had not included a Wal-Mart.

The city challenged her standing, arguing that the development created no liability for the city's general fund.

Mendelsohn rejected the challenge and proceeded to trial, without a jury, in December.

The trial changed his point of view about Tettaton's standing, and in April he ruled in the city's favor.

He wrote that Tettaton did not identify any potential liability of the general fund to pay any debts or liabilities that the project created.

"The notes issued in connection with the project are payable solely from revenues derived from the project," he wrote.

For Tettaton, John Myers of Springfield moved in May for reconsideration.

He wrote that the Fifth District appellate court endorsed taxpayer standing in two cases that involved tax increment financing.

Myers wrote that if taxpayers can challenge tax increment bonds, they can challenge their "closest cousins," business district bonds.

"A tax dollar spent on a private development proposal is a dollar that is not available to the municipality," Myers wrote.

At the hearing he told Mendelsohn, "With all due respect it was a difficult case, a long trial. I think your honor misinterpreted taxpayer standing."

He asked Mendelsohn to decide all the issues that came up at trial.

He said that if Mendelsohn denied reconsideration, he was in a quandary about what to do next.

"If I go to the Fifth District, what do I tell them?" Myers said.

Mendelsohn said, "You tell them the dumb judge ruled on standing."

"There was some thought on my ruling and so I ruled on the standing issue.

"You want me to rule on everything else so you can have a better appellate court record."

He said the city would not generate the sales taxes to repay the bonds without the project.

Myers said, "That assumes one of the facts at issue in this case. Is the Collinsville Crossing development legal or not?

"It is sheer speculation that but for Collinsville Crossing this tax would not exist."

He cited precedents in tax increment financing cases.

The city's attorney, Caroline Hermeling of Clayton, Mo., said it was not a tax increment financing case.

Mendelsohn said there was no case law under the new act. He said, "It is really a case of first impression."

Hermeling asked Mendelsohn to decide all the issues.

Mendelsohn said, "You're joining him?"

She said yes.

Mendelsohn said, "Let's assume I am correct. A higher court would not get into all the other issues.

"It's nice to be accommodating but I don't think that's my job, to start setting up a record."

He denied the motion to reconsider.

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