Petition — City of St. Louis v. Thomas W. Garland, Inc.

7 — mw he le bs

49-175 AUG 2 1979

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1979

No. oS ee ea ee oe ae oe

CITY OF ST. LOUIS, a Municipal Corporation,

Petitioner,

V.

THOMAS W. GARLAND, INC. and MANLEY INVESTMENT COMPANY,

Respondents.

PETITION FOR A WRIT OF CERTIORARI

To the United States Court of Appeals

for the Eighth Circuit

JACK L. KOEHR

City Counselor

JOSEPH R. NIEMANN

Assistant City Counselor

ROBERT H. DIERKER, JR.

Assistant City Counselor

Room 314 City Hall

St. Louis, Missouri 63103

622-3361

Attorneys for Petitioner,

City of St. Louis

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St. Louis Law Printing Co.. Inc.. 812 Olive Street 63101 314-231-4477

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DAK, JR, CLEP

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————

TABLE OF CONTENTS

EEE OTIS Oe eee EEE

I

Questions Presented for Review ................005:-

Constitutional Provisions and Statutes Involved ........

Ee

Reeasoms for Coramiees Che Wret ... ccc cece cece.

:..

The issues presented are important and recurring

Lee bh oa a 00s .ss0 000

The decision is in conflict with decisions of the Su-

NET EPPO TEC TEETER

The decision of the Eighth Circuit extending the

right to recovery on the basis of an expanded theory

of de facto condemnation reflects the outgrowth of

decisions by two other Circuits that have allowed

recovery on a theory of law unauthorized by the

UTC E Chee he eevee ecceencesseces

The decision is inconsistent with a decision rendered

in the same Circuit less than thirty days after issu-

ance of the Garland decision .................

Dee ee ewe eccesess

Appendix A—Order and Memorandum of the District

Teed wes 4s sss escncccses

Appendix B—Opinion of the Eighth Circuit Court of Ap-

Ne ss cewek een ecccncese

Appendix C—Chapter 353, Urban Redevelopment Corpo-

rations Law, Revised Missouri Statutes .............

10

11

13

A-1

Appendix D—Garland Complaint, filed January 30, 1978 A-32

Appendix E—Garland First Amended Complaint, June 2,

SE ACN eee heh 06 BAA SAO Re wh S DOR ee bee A-93

Appendix F—Unreported opinion of the Eighth Circuit

Court of Appeals, Ruby Young, Monroe Young, et al.

v. Patricia Harris, et al., filed June 13, 1979 ........ 108

Cases Cited

Annbar Associates v. West Side Redevelopment Corp., 397

S.W.2d 635 (Mo. 1966), appeal dismissed 385 U.S. 5

SE 5s CAVERNS WEA OATS CEU ed Ch eae aba es 7

Berman v. Parker, 348 U.S. 26 (1954) ...........000. 6

City of Buffalo v. J.W. Clement Company, Inc., 28 N.Y.2d

241, 269 N.E.2d 895, 321 N.Y.S.2d 345 (N.Y. Ct. of

pM dE OEE eee ere Cre aa Troe 8

Council Plaza Redevelopment Corporation v. Duffey, 439

De ee PO WD oon 5k ayes cohawessesen’ 7

D.R. Smalley and Sons, Inc. v. United States, 372 F.2d 505

(Ct.Cl.), cert. denied, 389 U.S. 835 (1967) .......... 9

Danforth v. United States, 308 U.S. 271, 286

ce ME RS TO Pane: PD ee eee 8,9, 10, 12

Griggs v. Allegheny County, 369 U.S. 84 (1962) ........ 10

Foster v. City of Detroit, 254 F.Supp. 655 (E.D. Mich.

1966), aff'd, 405 F.2d 138 (6th Cir. 1968) ......... 11

Foster v. Herley, 330 F.2d 87 (6th Cir. 1964) .......... 11

Joslin Mfg. Co. v. City of Providence, 262 U.S. 668 (1923) 8,9

Pumpelly v. Green Bay Co., 80 U.S. (13 Wall.) 166 (1871) 9

Richmond Elks Hall Ass’n v. Richmond Redev. Agency,

361 F.2d 1327 (Sth Circuit 1977) ...........c000. 11

ill

Ruby Young, Monroe Young, et al. v. Patricia Harris

et al., filed June 13, 1979, as yet unreported, See Ap-

petit F, WEED nc cect ecto ew een eowees 12

Sayre v. City of Cleveland, 493 F.2d 64, 69 (6th Cir.

AR ete eee Sean eee ee eee ee ee 11

United States v. Causby, 328 U.S. 256 (1946) ......... 9

United States v. Cress, 243 U.S. 316 (1917) ............ )

United States v. General Motors Corporation, 323 U.S.

ER e tear ear ees e fe 9,10

Willink v. United States, 240 U.S. 572 (1916) .......... 9

Woodland Market Realty Company v. City of Cleveland,

426 F.2d 955 (6th Cir. 1970) ....... eee eee eee eeee 11

Constitutional Provisions

Fifth Amendment, United States Constitution .......... 2

Fourteenth Amendment, United States Constitution ...... 3

Article VI, Section 21, Missouri Constitution ........ 6,7

Statutes and Ordinances

Federal Statutes

y Bol ie 2” | | er ee 2

tS ne ear ree 3

State Statutes

Chapter 353, Missouri Revised Statutes .......... 3.6, 7, ta

Section 353.020, Missouri Revised Statutes .........--- 6

Section 353.060, Missouri Revised Statutes ...........- 3,6

Section 353.110, Missouri Revised Statutes ..........-- 6

Section 353.130, Missouri Revised Statutes .......... 3, 4, 6

iv

Ordinances of the City of St. Louis

Ordinance 55952, approved June 29, 1971 ............ 3,4

Ordinance 56476, approved April 5, 1973 ............ 3,4

Miscellaneous Authorities Cited

Nichols on Eminent Domain, Vol. 4 Section 12.3151(5) 8,9

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1979

oe ore

CITY OF ST. LOUIS, a Municipal Corporation,

Petitioner,

V.

THOMAS W. GARLAND, INC. and MANLEY INVESTMENT COMPANY,

Respondents.

PETITION FOR A WRIT OF CERTIORARI

To the United States Court of Appeals

for the Eighth Circuit

The City of St. Louis, a municipal corporation (City), pe-

titioner herein, respectfully prays that a writ of certiorari be

issued to review the judgment of the United States Court of

Appeals for the Eighth Circuit entered in this proceeding on

May 15, 1979.

OPINIONS BELOW

The opinion of the United States District Court, Eastern

District of Missouri, filed on May 23, 1978 is reported at 450

—

F.Supp. 239 and is reproduced in Appendix A, infra. The opin-

ion of the Eighth Circuit Court of Appeals reversed the judg-

ment of the District Court. The opinion, as amended on denial

of rehearing and rehearing en banc, was entered on May 15,

1979 and is reported at 596 Fed.2d 784. The opinion is repro-

duced in Appendix B, infra.

JURISDICTION

The judgment of the Court of Appeals for the Eighth Circuit

was filed on May 15, 1979 and this petition for certiorari was

filed within ninety days of that date. This Court’s jurisdiction

is invoked under 28 USC §1254(1).

QUESTIONS PRESENTED FOR REVIEW

Whether a complaint that fails to allege actual physical in-

vasion or appropriation of property by the City is sufficient to

establish a claim of de facto condemnation against the City.

Whether a cause of action lies on a theory of an unconstitu-

tional taking of property by a municipality which merely au-

thorized by two ordinances redevelopment of a downtown area

by a private redevelopment corporation.

CONSTITUTIONAL PROVISION AND

STATUTES INVOLVED

The relevant part of the Fifth Amendment of the Constitu-

tion of the United States provides:

“No person . . . shall be compelled in any criminal case

to be a witness against himself, nor be deprived of life,

liberty or property without due process of law; nor shall

ee Toe

private property be taken for public use, without just com-

pensation.”

Chapter 353 of the Revised Missouri Statutes is set out in Ap-

pendix C, infra.

STATEMENT OF THE CASE

Thomas W. Garland, Inc. (Garland), which operates a wom-

en’s ready to wear business in leased premises in downtown

St. Louis, filed a complaint in District Court on January 30,

1978 against the City of St. Louis (City) and Manley Invest-

ment Company (Manley). Appendix D, infra. Pursuant to 28

USC §1331 Garland sought monetary relief for an alleged tak-

ing of its property by the City in violation of the Fifth and

Fourteenth Amendments to the United States Constitution and

declaratory relief from Manley as lessor seeking a termination

of Garland’s lease which is due to expire December 4, 1982.

Manley is the fee owner of the property on which Garland con-

ducts its business.

The complaint recites that by enactment of Ordinance 55952,

approved June 29, 1971, a copy of which is set out as Exhibit A

to Garland’s complaint, the Board of Aldermen of the City of

St. Louis found conditions of blight to exist in an area of down-

town St. Louis which includes Garland’s premises. As authorized

by Sections 353.060 and 353.130 of the Missouri Revised Stat-

utes (Appendix C, infra) the Board of Aldermen approved a

development plan for the area, including Garland’s premises, sub-

mitted by Mercantile Center Redevelopment Corporation (Mer-

cantile) and designated Mercantile the developer under Section

One of Ordinance 56476, approved April 5, 1973. A copy of

Ordinance 56476 is set out as Exhibit B to Garland’s complaint.

Appendix D infra. Mercantile is a private urban redevelopment

corporation organized under Chapter 353 of the Missouri Re-

vised Statutes. Mercantile is not a party in Garland’s complaint.

a

Section Three of Ordinance 56476 grants Mercantile the

power of eminent domain as authorized by Section 353.130(3)

R.S.Mo. Under Section 9 of the Development Agreement set

out in Ordinance 56476 the City agrees to vacate certain streets

and alleys including St. Charles Street near Garland’s property.

Garland’s complaint does not state that a vacation affecting its

access has actually occurred and the agreement entered into by

the City and Mercantile does not contemplate the vacation until

after acquisition and demolition of the property. Garland’s com-

plaint and the ordinances set out therein do not allege that any

property acquisition by the City is contemplated. All property

acquisition is by Mercantile.

Garland’s states that anticipating the development of the area

as authorized by Ordinance 56476 and relying on statements to

vacate the property by September 1974 made by Mercantile’s

agents, it took actions to relocate portions of its headquarters

office, administrative offices, shipping and receiving functions

and fur storage vault at considerable expense but continues to

do retail business at the premises. During this time, Manley,

acting as Mercantile’s agent, acquired ownership of the property

Garland leased as well as the surrounding property and caused

some surrounding buildings to be vacated and demolished which

Garland claims destroyed the business character of the area and

diminished the lease’s economic value.

Garland states that the schedule for the redevelopment of

the area by Mercantile has fallen behind, that formal condem-

nation proceedings have not been filed and it has suffered finan-

cial loss. Garland claims that the City in enacting a blighting

declaration under Ordinance 55952 and approving a develop-

ment plan designating a developer under Ordinance 56476,

which granted Mercantile the power of eminent domain and

called for the acquisition and removal of Garland’s leased prem-

ises and the surrounding area by Mercantile, has deprived

Garland’s of the full use and benefit of its leasehold interest

—

without compensation in violation of the Constitution and caused

Garland consequential damages.

On the basis of the de facto condemnation, Garland’s seeks

the Court to declare its lease with Manley to be ended.

Upon the filing of separate motions to dismiss by the City

and Manley, the District Court dismissed the complaint for

failure to state a claim upon which relief could be granted in

that no physical invasion or appropriation of Garland’s property

by the City was alleged. Appendix A, infra. Garland was de-

nied leave to file its amended complaint. The complaint, set

out in Appendix E, infra, merely expanded upon the impact on

Garland from surrounding demolition. Garland appealed the

District Court’s decision to the Eighth Circuit.

The Circuit Court of Appeals reversed the District Court and

held that physical invasion or appropriation of property was not

essential to a claim of de facto condemnation against the City.

Appendix B, infra. The cause was remanded to the District

Court for reinstatement of the claim against the City for resolu-

tion on its merits. The District Court was further to determine

whether the power of pendent jurisdiction exists in the case and,

if so, whether to exercise that power against Manley.

REASONS FOR GRANTING THE WRIT

1. The Issues Presented Are Important and Recurring Ones

Nationally.

It is submitted that the extension by the Eighth Circuit Court

of Appeals of the de facto condemnation theory of recovery

to the milieu of urban renewal ought to be closely examined by

the Supreme Court since the issue is an important one to the

continued viability of urban renewal programs. Since the de-

cision of the Supreme Court in Berman v. Parker, 348 U.S. 26

(1954), validated massive programs of renewal in urban areas

through the cooperative efforts of government and the private

sector, various publicly authorized ventures by private entities in

carrying out urban renewal have developed in almost every state

containing aging urban centers.

The response to the problem of urban renewal has been the

formation by State and local governments of procedures to

facilitate the involvement of the private sector through urban

renewal corporations. The Missouri Constitution provides di-

rectly for urban redevelopment. Missouri Constitution, Article

VI, Section 21. The Missouri legislature has enacted laws pro-

viding for the establishment of urban redevelopment corpora-

tions to acquire, construct, maintain and operate redevelopment

projects. Chapter 353 Missouri Revised Statutes, Appendix C,

infra. These limited earnings corporations, when authorized by

the legislative authorities of the City affected, may acquire real

property by the exercise of eminent domain pursuant to a de-

velopment plan in areas that are found to be blighted by the

city legislature. Sections 353.020, 353.060, 353.130 R.S.Mo.

In addition, certain real property tax exemptions are authorized

as an incentive to private redevelopment, Section 353.110, R.S.

Mo. The objective of the Chapter 353 Urban Redevelopment

Corporation Law is to involve private enterprise in the monu-

_

mental task of redeveloping urban blighted areas and eliminating

the-social ills resulting from urban blight. Council Plaza Rede-

velopment Corporation v. Duffey, 439 S.W.2d 526 (Mo. 1969).

The validity of the process authorized by Chapter 353 is clearly

affirmed in Annbar Associates v. West Side Redevelopment

Corp., 397 S.W.2d 635 (Mo. 1966), appeal dismissed 385

U.S. 5 (1966).

It was pursuant to the authority of Article VI, Section 21 of

the Missouri Constitution and Chapter 353 R.S.Mo. 1969 that

the City enacted the ordinances facilitating development of the

downtown area by Mercantile Center Redevelopment Corpora-

tion, the subject of this litigation.

The Circuit Court of Appeals decision, by fastening de facto

condemnation liability on the City for taking the preliminary

legislative steps needed to permit an urban redevelopment cor-

poration to implement its plan, effectively annihilates the value

of the redevelopment procedure previously sanctioned.

Because prevailing considerations of public policy would

seem to militate against a determination that Garland’s com-

plaint sets out a cause of action sufficient to establish that a

constitutional taking has occurred, the Supreme Court ought

to review the decision. If the Eighth Circuit’s decision stands

without modification, public procedures in redevelopment proj-

ects must be significantly altered to the prejudice of the general

welfare. The decision holds that the legislative actions of the

City set out in the complaint, to-wit: the finding that a condi-

tion of blight exists, the approval of a plan for redevelopment

designating a developer and granting it tax incentives and the

power of eminent domain, constitute a constitutional taking.

This imposes an oppressive burden of liability on any city un-

dertaking renewal. In that announcement of the plan of de-

velopment gives a property owner advance notice of future

action to be taken with regard to the property, the property

pee yen

owner is actually benfited by these legislative actions. To hold

a City liable for such actions would present an insurmountable

impediment to any city in effecting redevelopment in blighted

areas for the good of the community. The potential for liability

would encourage the City and developers to adopt a policy of

non-public or secret planning that would clearly be of even

greater detriment to any property owner’s rights and would

restrict planning on the owner’s part to minimize the impact

of urban renewal of his business. The rationale was recognized

in City of Buffalo v. ].W. Clement Company, Inc., 28 N.Y.2d

241, 269 N.E.2d 895, 321 N.Y.S.2d 345 (N.Y. Ct. of App.

1971), which extensively discusses the issue of a de facto tak-

ing and concludes that a taking has not occurred on facts sub-

stantially stronger than those contained in Garland’s complaint.

See also Nichols On Eminent Domain, Vol. 4, Section 12.-

3151(S5).

From the foregoing it is evident that the issues to be re-

viewed upon the granting of this petition are exceptionally im-

portant. The decision of the Eighth Circuit revolutionizes the

law of condemnation in urban renewal by fastening de facto

condemnation liability on a City for taking the preliminary

legislative steps needed to permit an urban redevelopment cor-

poration to implement its plan. As such, it is a radical depar-

ture from the usual application of constitutional principles in

this field of law.

2. The Decision Is in Conflict With Decisions of the Su-

preme Court.

In response to claims for compensation on the theory that

the threat of condemnation constitutes an actual taking, the

Supreme Court of the United States has consistently held that

the “mere enactment of legislation which authorizes condem-

nation of property cannot be a taking.” Danforth v. United

States, 308 U.S. 271, 286 (1939); see also Joslin Mfg. Co. v.

—

City of Providence, 262 U.S. 668 (1923); Willink v. United

States, 240 U.S. 572 (1916). A taking occurs not by the pas-

sage of legislation, but by affirmative actions of government

employees. D.R. Smalley & Sons, Inc. v. United States, 372

F.2d 505 (Ct.Cl.), cert. denied, 389 U.S. 835 (1967). Simi-

larly, Danforth, supra, 308 U.S. at 285, holds that the re-

duction or increase in the value of property in a project area

from the time of the announcement of the project are incidents

of ownership and cannot be considered as a taking in the con-

stitutional sense.

The rationale in the Danforth case has been applied over the

years by a number of jurisdictions to deny claims for compen-

sation based on theories that the threat of condemnation con-

stitutes a de facto taking. See Nichols Cn Eminent Domain,

Vol. 4, Section 12.3151(5).

Generally, then, a constitutional taking occurs only at the

time a verdict in a condemnation action is confirmed, the deed

executed, and the award paid. The Supreme Court has, how-

ever, recognized some very limited exceptions to the above

rule where the actions of government have been determined to

be such that a taking has occurred even though eminent do-

main proceedings have not been initiated or concluded. But

these cases have been limited situations in which the govern-

mental action has been so complete “as to deprive the owner

of all or most of his interest in the subject matter, to amount

to a taking.” United States v. General Motors Corporation, 323

U.S. 373 (1945).

A close examination of these instances reveals that these

cases always arose in the context of either a physical invasion

or physical restraint on the land such as repeated flooding,

Pumpelly v. Green Bay Co., 80 U.S. (13 Wall.) 166, (1871),

and United States v. Cress, 243 U.S. 316, (1917); invasion of

air space, United States v. Causby, 328 U.S. 256, (1946), and

—_—

Griggs v. Allegheny County, 369 U.S. 84, (1962); or actual

entry for a time, United States v. General Motors, 323 U.S. 373

(1945). The Supreme Court has never held that in the absence

of physical invasion or substantial restraint that a compensable

taking has occurred.

In directing the District Court to reinstate Garland’s com-

plaint, this Court has in effect held that a city which enacts the

legislation necessary to permit condemnation by an urban re-

developnient corporation may be held liable for condemnation,

even though the City takes no further affirmative action with

regard to the project developed by the redevelopment corpora-

tion. The Appellate Court’s opinion is, therefore, in direct con-

flict with the principles of Danforth v. United States, supra,

and the line of cases, state and federal, which hold that no

claim for just compensation may be predicated on legislative

acts or merely ministerial or passive actions by a governmental

agency.

3. The Decision of the Eighth Circuit Extending the Right

to Recovery on the Basis of an Expanded Theory of De Facto

Condemnation Reflects the Out-Growth of Decisions by Two

Other Circuits That Have Allowed Recovery on a Theory of

Law Unauthorized by the Supreme Court.

As is pointed out above, the Supreme Court has recognized

some exceptions to the general rule that a taking occurs only

at the conclusion of eminent domain procedures but only where

there is a physical invasion of the property or action to appro-

priate the property. Legislative actions are insufficient to estab-

lish a de facto taking.

The question of whether or at what point actions by govern-

ment in undertaking urban renewal amount to a taking of prop-

erty in a constitutional sense has not been addressed by the

Supreme Court. While Danforth, supra, represents current ap-

— ' pon

plicable standards, these standards have been significantly ex-

panded in recent years by decisions in the Sixth and Ninth Cir-

cuits without authority. In a series of decisions on the matter,

Foster v. Herley, 330 F.2d 87 (6th Cir. 1964), Foster v. City

of Detroit, 254 F.Supp. 655 (1966) aff'd 405 F.2d 138 (6th

Cir. 1968), the Sixth Circuit held that an abuse of condemna-

tion authority could constitute a taking. The Court recognized

in Sayre v. City of Cleveland, 493 F.2d 64, 69 (6th Cir. 1974),

however, that the decision “broke new ground when it held

that abuse of the condemnation authority could constitute a

taking.” The Sixth Circuit in the Sayre case and Woodland Mar-

ket Realty Company v. City of Cleveland, 426 F.2d 955 (6th

Cir. 1970) limited significantly the impact of the Foster cases.

Nevertheless, the principles of Foster have been extended and

applied much more liberally by the Ninth Circuit in Richmond

Elks Hall Ass'n v. Richmond Redev. Agency, 561 F.2d 1327

(9th Circuit 1977) and by the Eighth Circuit in its decision in

Garland for which certiorari is being sought herein.

It is submitted that the extension of the de facto condemna-

tion theory set out by these Circuits ought to be closely ex-

amined by the Supreme Court since, as has been pointed out

above, the issue is an important one to the continued viability

of programs of urban renewal throughout the nation. Addition-

ally, a review of the Circuit decisions reveals considerable con-

fusion and uncertainty in the application of legal standards en-

abling recovery. Unless criteria are established by the Supreme

Court, continued confusion will prevail to the detriment of re-

development programs for decayed urban areas.

4. The Decision Is Inconsistent With a Decision Rendered in

the Same Circuit Less Than Thirty Days After Issuance of the

GARLAND Decision.

The decision in this cause was issued by the Eighth Circuit

on May 15, 1979 after being amended on denial of the City’s

—

and Manley’s motions for rehearing and rehearing en banc. In

concluding that a cause of action has been stated against the

City the Eighth Circuit either held that the legislative actions

of the City alone were sufficient to establish a claim on a theory

of de facto taking, which directly contravenes Danforth, supra,

or the Court merged the purely legislative actions of the City

with the acts of implementation by the private redevelopment

corporation, Mercantile, that is not a party to the suit. The de-

cision is most unclear on this point. This point is crucial to an

understanding of the theory of recovery by cities throughout

the Circuit. Assuming the decision is predicated on the latter

approach, a theory of recovery for abuse of condemnation has

been adopted against a defendant City which under the state

and local renewal legislation is not authorized to acquire the

property in the area through condemnation. All property ac-

quisition under the urban renewal program legislation is to be

accomplished by Mercantile, a private, limited profit, urban

redevelopment corporation organized under the provisions of

Chapter 353 of the Missouri Revised Statutes, Appendix C,

infra, which is not a party to the complaint. Liability, if stated

at all in the complaint, is affixed on the City for the actions of a

private, non-party corporation.

This merger of liability against the City for the actions of

Mercantile is wholly inconsistent with the Eighth Circuit’s de-

cision in Ruby Young, Monroe Young, et al. v. Patricia Harris,

et al., filed June 13, 1979. The decision, as yet unreported,

is contained in Appendix F, infra. That decision reviews the

legal relationship of the City with a 353 Urban Redevelopment

Corporation, structured similarly to Mercantile, conducting re-

newal activities in another part of the City and concludes:

“. . . We Cannot say that the assistance provided by the city

because of its desire to encourage and promote private re-

development of blighted areas is sufficient to deprive the de-

veloper’s project of its status as a private project; a contrary

holding is clearly indicated.”

_13—

It is submitted that this inconsistency within the Circuit itself

lends further credence to the assertion by petitioner of the need

for review by the Supreme Court.

Finally, it is submitted that review of this cause at this point

would enable the Court to resolve the issues presented in the

most straightforward manner. This cause has been decided on

the pleadings with the result that the record to be reviewed is

not burdened by extraneous questions of law and fact. Failure

to decide the issues presented at this point will result in a pro-

liferation of pleadings, amendments, orders and motions that

will only serve to cloud the issues presented herein and make

ultimate resolution more difficult.

CONCLUSION

For the above reasons, this Honorable Court should issue its

writ of certiorari to review the decision of the Court of Appeals

for the Eighth Circuit.

Respectfully submitted,

JACK L. KOEHR

City Counselor

JOSEPH R. NIEMANN

Assistant City Counselor

ROBERT H. DIERKER, JR.

Assistant City Counselor

Room 314 City Hall

St. Louis, Missouri 63103

622-3361

Attorneys for Petitioner,

City of St. Louis

APPENDIX

—* pe

APPENDIX A

United States District Court

Eastern District of Missouri

Eastern Division

Thomas W. Garland, Inc., >

Plaintiff,

is \ No. 78-129 C (3)

City of St. Louis, et al.,

Defendants. }

ORDER

(Filed May 23, 1978)

Pursuant to the memorandum filed this date,

IT IS HEREBY ORDERED that defendants’ motions to dis-

miss be and are granted and that this cause be and is dismissed

without prejudice.

/s/ JOHN F. NANGLE

United States District Judge

Dated: May 23, 1978

— = Sa Lay) — — os...

—_ 2

United States District Court

Eastern District of Missouri

Eastern Division

5

Thomas M. Garland, Inc.,

Plaintiff,

: No. 78-129 C (3)

City of St. Louis, et al.,

Defendants. }

MEMORANDUM

(Filed May 23, 1978)

This matter is before the Court upon separate motions of

defendants City of St. Louis and Manley Investment Compan

to dismiss plaintiff's complaint. Plaintiff has filed this ak

pursuant to 28 U.S.C. § 1331, seeking declaratory and monetary

relief for an alleged taking of plaintiff's property.

Plaintiffs complaint alleges that on November 28, 1952

it entered into a lease of premises in the City of St. Lou for ;

term of thirty years, expiring December 4, 1982, at which it

operates a retail store. On June 29, 1971, the Board of Alder-

men of the City of St. Louis passed an ordinance providing that

an area of the City, including plaintiffs leased premises, was

blighted and should be redeveloped. On April 5 1973 the

Board of Aldermen passed an ordinance providing for a ‘ae

tract between the City and Mercantile Redevelopment Corpora-

tion. Under the provisions of the contract between these parties

Mercantile was to undertake a redevelopment of six City blocks,

previously declared blighted, which included the block on which

=

plaintiff's premises are located. The ordinance further provided

for the vacating of St. Charles Street as a public thoroughfare, a

street used by plaintiff as the only means of ingress of commer-

cial deliveries. The ordinance further granted to Mercantile

the power to condemn property within the development area

and provided that the City could exercise the power of con-

demnation within the redevelopment area.

On March 23, 1973, plaintiff alleges, agents for Mercantile

advised plaintiff's officers that the leased premises would have to

be vacated by September, 1974. Relying upon said statements,

plaintiff proceeded to search for new premises. Plaintiff was

unable to locate any suitable property in the downtown area of

the City and instead relocated in three areas. It leased premises

in West St. Louis County for its headquarters office, administra-

tive offices, shipping and receiving functions and fur storage

vault. To provide services for customers in Illinois who previ-

ously shopped in plaintiff's City facility, plaintiff leased a facility

in Fairview Heights, Illinois. In order to provide a facility for

customers south of the City, plaintiff leased facilities in South

St. Louis County, Missouri.

Plaintiff alleges that defendant Manley Investment Co., as

agent for Mercantile, began to acquire ownership of property

in the area in 1973 and 1974. With the exception of plaintiff's

store and a building south of plaintiff's store, the two-block area

surrounding plaintiff's premises was stripped of its business and

commercial enterprises. As a result, plaintiff alleges, the area

has become blighted and the business character of the area

has been destroyed. Sales have declined. Plaintiff alleges that

there has been no further redevelopment because of a lack of

proper financing.

Plaintiff asserts that it has been deprived of the full use and

benefit of its leasehold interest. Plaintiff contends that there

— A-4 —

has been a de facto taking of its leasehold interest as of April

1, 1974 and that it should be compensated therefor. Plaintiff fur-

ther alleges that there is an impossibility of performance of its

lease because of the actions of the City. Accordingly, it prays for

monetary judgment against defendant City of St. Louis, as com-

pensation for the taking of its leasehold interest and consequen-

tial damages allegedly resulting. Plaintiff further prays for a

declaration that the lease between plaintiff and defendant Man-

ley Investment Company is terminated, null and void.

The crux of plaintiffs complaint is that the actions of de-

fendant City have resulted in a taking of plaintiff's leasehold

interest without just compensation therefor, in violation of the

Fifth and Fourteenth Amendments to the United States Con-

stitution. Both defendants have filed motions to dismiss for

failure to state a claim. Additionally, defendant Manley Invest-

ment Company asserts that this Court lacks jurisdiction as to the

claim involving said defendant.

The general rule is that “[t]he mere enactment of legislation

which authorizes condemnation cannot be a taking”. Danforth

v. United States, 308 U.S. 271, 286 (1939). In response to the

impact that the pendency of such proceedings may have upon

an area, however, courts have considered the delay and inaction

of the condemning authority in determining the date for the

valuing of the property condemned. See Sayre v. City of Cleve-

land, 493 F.2d 64 (6th Cir. 1974); 4 Nichols on Eminent

Domain § 12.3151[5].

In Foster v. Herley, 330 F.2d 87 (6th Cir. 1964), however,

the court held that the actions of the City may amount to a de

facto taking of the property at a date prior to condemnation

date. In Foster, the City had instituted condemnation proceed-

ings. The use and management of the property had been frozen

during the pendency of the proceedings. After tenants had va-

mae oe

cated and the condition of the plaintiff's buildings had deteri-

orated, the City notified the plaintiff that the buildings would

have to be demolished at the plaintiff's expense. Approximately

two years later, or ten years after the condemnation proceedings

were instituted, the City dismissed the condemnation proceed-

ings. Thereafter, the City again started condemnation proceed-

ings under the Federal Urban Renewal Program, under

which the appraised value of the property would be based upon

the condition of the property as it then existed, without buildings

and in its depreciated state. The court held that the district

court had jurisdiction, pursuant to 28 U.S.C. § 1331, to hear

plaintiff's claim that his Fourteenth Amendment rights had been

violated in that he had been deprived of his property without due

process of law.

Since that decision, however, the Sixth Circuit has limited

the circumstances in which the Foster holding may be applied.

In Sayre v. City of Cleveland, supra, the City notified the prop-

erty owner of its intention to obtain certain parcels of property.

A resolution was passed declaring such intention and written

notices were issued. The City, however, never acquired the

property. The court held that

_. . absent the extreme circumstances present in the Foster

case, but lacking here, we think the true rule is that there

is no de facto taking of properties which have decreased in

value because of an urban renewal project unless there is a

physical invasion, damage or injury, or a restraint of some

type, or action by the City to appropriate such properties.

Id. at 70.

The court further noted that in those cases in which a de facto

taking was found, there was “a physical entry of the con-

demnor, or a physical ouster of the owner, or a legal inter-

ference with the physical use, possession or enjoyment of the

ee

— A-6 — — "po

property or legal interference with the owner’s power of dis- | | APPENDIX B

position of the property”. Jd. quoting from City of Buffalo v.

J. W. Clement Co., 28 N.Y.2d 241 (1971). See also Woodland

Market Realty Company v. City of Cleveland, 426 F.2d 955

(6th Cir. 1970); 4 Nichols on Eminent Domain § 12.3151[5].

United States Court of Appeals

For the Eighth Circuit

It is clear that plaintiff has failed to state a claim herein.

Plaintiff does not allege that there has been any physical entry No. 78-1554

or legal interference with its use or disposition of the property. |

All that plaintiff asserts is the threat of condemnation, its impact |

upon the area, and its impact upon the business activities of Thomas W. Garland, Inc., :

plaintiff. While such facts may affect the date determined for the Appellant,

valuation of the property in any subsequent condemnation pro-

ceedings, such assertion is insufficient to state a claim herein.

Cf., City of Buffalo v. Clement, supra.

Appeal from the United

ni States District Court

- for the Eastern Dis-

The City of St. Louis and Manley whet of Milesousl

: Investment Company,

Accordingly, defendants’ motions will be granted. Appellees. J

6 eee eT |

/s/ JOHN F. NANGLE

United States District Judge Submitted: December 15, 1978

ubmitted: December 15,

Decided: February 28, 1979

As Amended on Denial of Rehearing and Rehearing

En Banc, May 15, 1979

Dated: May 23, 1978

Before HEANEY and ROSS, Circuit Judges, and TALBOT

SMITH, Senior District Judge.*

* The Honorable TALBOT SMITH, Senior United States Dis-

trict Judge, Eastern District of Michigan, sitting by designation, par-

ticipated in the post-argument conference and concurred in the de-

cision resulting in this opinion prior to his death on December 21,

1978.

— sen

ROSS, Circuit Judge.

Plaintiff, Thomas W. Garland, Inc. (Garland), operates a

retail clothing store on leased premises in the downtown busi-

ness area of St. Louis, Missouri. In its complaint, filed January

30, 1978, Garland alleges that condemnation proceedings orig-

inating in April 1973 by the city of St. Louis have effected a

de facto taking of plaintiff's leasehold for which plaintiff seeks

4st compensation under the fifth and fourteenth amendments

to the Constitution. Garland joined Manley Investment Com-

pany (Manley) as a defendant in this action, as owner of the

fee interest in the leased property, and alleges that the lease

has become frustrated or impossible to perform and should be

cancelled because of the city’s de facto condemnation of the

leasehold.

In May 1978 the district court! sustained the motions of

both defendants to dismiss the complaint for failure to state a

claim for relief, Fed. R. Civ. P. 12(b)(6). We reverse and re-

mand for additional proceedings.

I

The complaint alleges that in June 1971, the city’s Board of

Aldermen passed Ordinance 55952 declaring an area of the

city including plaintiff's leased premises blighted, and redevel-

opment of the area necessary. In April 1973, Ordinance 56476

was passed, designating Mercantile Center Redevelopment Cor-

poration (Mercantile) as developer, approving a redevelopment

plan submitted by Mercantile, incorporating a contract between

the city and Mercantile and delegating to Mercantile the power

of eminent domain for the purpose of carrying out the contract.

The development agreement also provided for vacation of a

street which had served as the only entrance to Garland’s ship-

ping and receiving dock behind the leased building.

1 The Honorable John F. Nangle, United States District Judge f

the Eastern District of Missouri. nee vos

=~ Ss

Garland further alleges that in March 1973, agents for Mer-

cantile ordered Garland to vacate its premises by September

1974 and that relying on this statement and public announce-

ments concerning the -edevelopment project, Garland leased

other premises for its administrative offices, fur storage and

shipping and receiving functions, as well as additional properties

to be used as retail stores, all of such accommodations made at

considerable expense.

Between 1973 and 1975 defendant Manley, as Mercantile’s

agent, acquired the fee interest in plaintiff's leased property and

others in the area. Surrounding buildings were demolished by

use of a “headache ball.” Part of the two-block area surround-

ing plaintiff's premises has been converted to a parking lot, and

part now consists of vacant buildings. Plaintiff asserts that the

two-block area has been stripped of its business and commercial

character, rendering plaintiff's leasehold useless.

In June 1978, plaintiff was denied leave to file an amended

complaint. The proposed amendment sets forth greater detail

concerning the impact on plaintiff's operations resulting from

the acts of Manley, Mercantile and the city, alleging that the

“headache ball” has caused structural damage to plaintiff's build-

ing. Debris from the demolition of surrounding buildings has

blocked the entrance to plaintiff's loading dock, clogged its air

conditioning system and covered its merchandise with dust.

Doorways and sidewalks in the vicinity are not cleared of snow,

ice and garbage, and pedestrians no longer frequent plaintiff's

area.

Plaintiff contends that after destroying the economic value of

the district, leaving plaintiff under a “cloud of condemnation”

for five years and rendering plaintiff's leasehold useless, the city

and Mercantile ceased redevelopment plans because the entire

project had been inadequately financed. The city had failed to

secure a detailed financing plan from Mercantile as required by

— A-10 —

Section 29.080(15), Revised Code of St. Louis. Furthermore,

although it was required under provisions of the City Charter to

begin condemnation proceedings within six months after the

effective date of the redevelopment ordinances and although its

agents told plaintiff to vacate the premises, the city has failed to

commence official condemnation of plaintiff's leasehold.

I

We review the dismissal of plaintiffs complaint in light of

the following standards:

[A] complaint should not be dismissed for failure to

state a claim unless it appears beyond doubt that the plain-

tiff can prove no set of facts in support of his claim which

would entitle him to relief.

* * * * * *

[A] complaint should not be dismissed merely because

a plaintiff's allegations do not support the particular legal

theory he advances, for the court is under a duty to ex-

amine the complaint to determine if the allegations provide

for relief on any possible theory. Nor should a complaint

be dismissed that does not state with precision all elements

that give rise to a legal basis for recovery. Finally, a com-

plaint should not be dismissed merely because the court

doubts that a plaintiff will prevail in the action. That

determination is properly made on the basis of proof and

not merely on the pleadings.

The question, therefore, is whether in the light most

favorable to the plaintiff, the complaint states any valid

claim for relief. Thus, as a practical matter, a dismissal

under Rule 12(b) (6) is likely to be granted only in the

unusual case in which a plaintiff includes allegations that

show on the face of the complaint that there is some in-

superable bar to relief.

ait Tai ast te

ee ee ee ee ees

— A-11 —

Jackson Sawmill Co. v. United States, 580 F.2d 302, 306 (8th

Cir.) (citations omitted), petition for cert. filed, 47 U.S.L.W.

3278 (U.S. Oct. 24, 1978) (No. 75-585).

The district court dismissed the complaint because plaintiff

had failed to allege any physical invasion or appropriation of

the property, stating:

It is clear that plaintiff has failed to state a claim herein.

Plaintiff does not allege that there has been any physical

entry or legal interference with its use or disposition of the

property. All that plaintiff asserts is the threat of con-

demnation, its impact upon the area, and its impact upon

the business activities of plaintiff. While such facts may

affect the date determined for the valuation of the prop-

erty in any subsequent condemnation proceedings, such

assertion is insufficient to state a claim herein.

(Emphasis added.) We do not agree with the district court that

physical invasion or appropriation of the property is esse: tial

to a claim of de facto condemnation.

While the mere declaration of blight and other initial steps

authorizing condemnation, even if they result in a decline in

property values, do not constitute a taking requiring compen-

sation to the property owner, Danforth v. United States, 308

U.S. 271, 286 (1939), governmental action short of acquisi-

tion or occupancy may constitute a constructive or de facto

taking “if its effects are so complete as to deprive the owner of

all or most of his interest in the subject matter.” United States

v. General Motors Corp., 323 U.S. 373, 378 (1945). See also

Richmond Elks Hall Ass'n v. Richmond Redev. Agency, 561

F.2d 1327 (9th Cir. 1977):

When a public entity acting in furtherance of a public

project directly and substantially interferes with property

rights and thereby significantly impairs the value of the

property, the result is a taking in the constitutional sense

and compensation must be paid. * * *

— A-12 —

“[T]o constitute a taking under the Fifth Amendment it

is not necessary that property be absolutely ‘taken’ in the

narrow sense of that word to come within the protection

of this constitutional provision; it is sufficient if the ac-

tion by the government involves a direct interference with

or disturbance of property rights. * * * Nor need the gov-

ernment directly appropriate the title, possession or use

of the properties. . . .”

Id. at 1330 (citations omitted).

In Richmond, the claimant’s property was located within the

area declared blighted by the city and designated for redevel-

opment. The redevelopment project was given wide publicity;

a schedule for purchase of the subject properties was estab-

lished, and the city’s redevelopment agency. began acquisition

and demolition in the project area. As a result, property in-

surance and loan funds for improvements on the subject prop-

erties became unavailable. The claimant suffered damage to its

building and a serious decline in rental income. After rede-

velopment ceased for lack of funds, the Ninth Circuit found

that a compensable taking of the claimant's property had oc-

curred because the actions of the city and its agency had ren-

dered the property unsaleable in the open market and “its use

for its intended purposes * * * severely limited.” Id. at 1330.2

? [A]s a result of Agency action, Elks’ property was rendered un-

saleable in the open market; its uses were severely limited by

Agency; commercial lenders refused to make loans on the sub-

ject property; and Elks’ peaceful enjoyment and its right to all

rents and profits from the property were substantially impaired.

Given these consequences of Agency action, we conclude that

Agency's interference with Elks’ property rights was direct and

substantial, and that the result of this interference was a signifi-

cant reduction in the value of the subject property. Therefore,

we hold that Agency effected a compensable taking under the

Fifth and Fourteenth Amendments of the United States Con-

sutution.

Richmond Elks Hall Ass'n v. Richmond Redev. Agency, 561 F.2d

1327, 1331 (9th Cir. 1977) (emphasis added).

esate tide

Se Ne eee ee ee

— A-13 —

In Foster v. Herley, 330 F.2d 87 (6th Cir. 1964), the Sixth

Circuit faced similar facts and reversed the lower court’s dis-

missal of the complaint for failure to state a claim. The district

court in the present action noted the Foster decision but con-

sidered it overruled or substantially restricted by two subse-

quent Sixth Circuit cases, Sayre v. City of Cleveland, 493 F.

2d 64 (6th Cir.), cert. denied, 419 U.S. 837 (1974) and

Woodland Market Realty Co. v. City of Cleveland, 426 F.2d

955 (6th Cir. 1970).

The district court cited the following language in Sayre:

[A]bsent the extreme circumstances present in the Foster

case, but lacking here, we think the true rule is that there

is no de facto taking of properties which have decreased

in value because of an urban renewal project unless there

is a physical invasion, damage or injury, or a restraint of

some type, or action by the City to appropriate such prop-

erties.

Sayre v. City of Cleveland, supra, 403 F.2d at 70. However,

in Sayre and Woodland, the subject properties had not been

designated for acquisition and were merely adjacent to but out-

side of the redevelopment area. In Sayre, the Sixth Circuit

explained the significance of the property’s location in deter-

mining whether property has been constructively condemned:

Woodland Market acknowledges the authority of the leg-

islative body to draw its own lines around the property it

wishes to condemn by eminent domain. And the crucial

geographic boundary is not that around the general plan-

ning area or the project area, but around the property that

the city has demonstrated that ‘it intends to appropriate.

Absent the abuse of eminent domain found in Foster, in-

cluding some action by the city indicating that the par-

ticular piece of property at issue is to be appropriated,

economic loss caused by urban renewal does not consti-

— so

tute a taking within the meaning of the fifth and fourteenth

amendments.

Id. at 69 (emphasis added).

In Clinton Street Greater Bethlehem Church v. City of De-

troit, 484 F.2d 185 (6th Cir. 1973), the Sixth Circuit further

explained the scope of its prior ruling in Foster v. Herley, supra,

and the Foster decision on remand, Foster v. City of Detroit,

254 F.Supp. 655 (E.D. Mich. 1966), aff'd, 405 F.2d 138 (6th

Cir. 1968).

The important distinction between the appellant’s alleged

harm and the problems encountered by Mr. Foster is that

all of Mr. Foster's problems stemmed from his being sub-

ject to the 1950 condemnation action. See 330 F.2d at

88. The affirmative acts of the City which led the District

Court to conclude that a taking had occurred prior to

1962 were all actions taken by the City in accordance

with a condemnation action which it later abandoned, and

including informing Mr. Foster that he would receive no

compensation for improvements, advising him only to “keep

the roof on and the water running”; requiring him to sign

a waiver of claim for damages as a condition precedent to

the issuance of a building permit (but waiving any claim

to the increased value of the property as a result of the

proposed improvements), completing the condemnation

and clearance of several blocks in the area, and keeping

the notice of lis pendens in effect for five years after the

issuance of the stop order on the project, while at the

same time, telling those who inquired that the property

would be condemned soon. 254 F.Supp. at 662.

None of these factors pertain to this appellant, since

this appellant was not subject to the 1950 condemnation

action.

Clinton Street Greater Bethlehem Church v. City of Detroit,

supra, 484 F.2d at 188 (emphasis added). See also Benenson

2 tee nets hiesneatiecesnce

polite Date tena Pmt

— A-15 —

v. United States, 548 F.2d 939, 947-52 (Ct.Cl. 1977); Drakes

Bay Land Co. v. United States, 424 F.2d 574, 584 (Ct.Cl.

1970).

We therefore find that the district court’s interpretation of

the requirements for a claim of de facto condemnation were

too restrictive. Accordingly, we remand with directions to re-

instate plaintiffs claim against the city for resolution on its

merits.*

II

The district court did not specify its reasons for dismissing

plaintiff's claim against Manley. However, the action against

Manley lacked an independent basis for federal court jurisdic-

tion, and the federal claim against the city was dismissed before

trial. Thus presumably the district court relied on the Supreme

Court’s statement in United Mine Workers of America v. Gibbs,

383 U.S. 715, 726 (1966) that “if the federal claims are dis-

missed before trial, even though not insubstantial in a jurisdic-

tional sense, the state claims should be dismissed as well.”

Because we reinstate Garland’s claim against the city, one

of the obstacles‘ to entertaining jurisdiction over plaintiff's ac-

3 We suggest that on remand plaintiff should be permitted to file

its amended complaint. In addition, we direct that on remand, the

district court shall resolve the issue of the city’s liability, if any, for

the acts of Mercantile. The city disclaims any liability for the alleged

de facto condemnation or abuse of the power of eminent domain,

contending that its delegation to Mercantile of the power to condemn

the subject property absolved the city of any further responsibility.

Garland contends that Mercantile acted at all times as the city’s agent.

‘Plaintiff seeks to append its state-law claim against Manley, an

ancillary defendant for whom no independent basis of federal juris-

diction is alleged, to plaintiff's federal question claim against the

city. The claims are based on the same operative facts and circum-

stances. However, plaintiff has not asserted that Manley is a neces-

— A-16 —

tion against Manley is removed. The district court should there-

fore determine whether, in light of the guidelines established

in Owen Equip. and Erection Co. v. Kroger, 437 U.S. 365

(1978) and Aldinger v. Howard, 427 U.S. 1 (1976), it may

exercise ancillary, i.e., pendent party, jurisdiction over the state-

law claim against Manley. If the court finds that this is a

proper case for the exercise of ancillary jurisdiction, it must

decide whether, under the Missouri law of frustration of pur-

pose or impossibility of performance, plaintiff has stated a

claim for cancellation of the remainder of its lease.

Reversed and remanded for further proceedings consistent

with this opinion.

A true copy.

Attest:

CLERK, U. S. COURT OF APPEALS,

EIGHTH CIRCUIT.

Sary party to resolution of the inverse condemnation claim against

the city or that its claim against Manley involves a general federal

question.

_ The Supreme Court has not yet indicated whether

jurisdiction may be exercised Bw primary jeedieaee & eae

on 28 U.S.C. §1331(a). The district court should decide whether

it has the power to assume ancillary jurisdiction over the claim

against Manley, and if so, whether it should elect to do so. The issue

rod r pang d ad = > angen to amend its complaint to

; ’ itional facts u which i justi

retaining Manley as an ancillary a" a ne

a -tedied

— A-17 —

APPENDIX C

Chapter 353

URBAN REDEVELOPMENT CORPORATIONS LAW

353.010. Citation of chapter—application

This chapter shall be known and may be cited and referred

to as “The Urban Redevelopment Corporations Law”, and shall

apply to all cities in this state which now or which may hereafter

contain a population of four thousand inhabitants or more,

according to the last preceding federal decennial census and all

constitutional charter cities.

Amended by Laws 1969, p. 501, § 1; Laws 1976, p. Tae, 3 3-

353.020. Definitions

The following terms, whenever used or referred to in this

chapter shall, unless a different intent clearly appears from the

context, be construed to have the following meaning:

(1) “Area” shall mean that portion of the city which the

legislative authority of such city has found or shall find to be

blighted, so that the clearance, replanning, rehabilitation, or

reconstruction thereof is necessary to effectuate the purposes of

this law. Any such area may include buildings or improvements

not in themselves blighted, and any real property, whether im-

proved or unimproved, the inclusion of which is deemed neces-

sary for the effective clearance, replanning, reconstruction or

rehabilitation of the area of which such buildings, improvements

or real property form a part;

(2) “Blighted area” shall mean that portion of the city within

which the legislative authority of such city determines that by

reason of age, obsolescence, inadequate or outmoded design or

physical deterioration, have become economic and social lia-

bilities, and that such conditions are conducive to ill health,

— A-18 —

transmission of disease, crime or inability to pay reasonable

taxes;

(3) “City” or “such cities” shall mean cities in this state which

now have or which may hereafter have a population of four

thousand inhabitants or more according to the last preceding

federal decennial census and all constitutional charter cities;

(4) “Development plan” shall mean a plan, together with any

amendments thereto, for the development of all or any part of

a blighted area, which is authorized by the legislative authority

of any such city;

(5) “Legistative authority” shall mean the city council or

board of aldermen of the cities affected by this law;

(6) “Mortgage” shall mean a mortgage, trust indenture, deed

of trust, building and loan contract, or other instrument creating

a lien on real property, to secure the payment of an indebtedness,

and the indebtedness secured by any of them;

(7) “Real property” shall include lands, buildings, improve-

ments, land under water, waterfront property, and any and all

easements, franchises and hereditaments, corporeal or incor-

poreal, and every estate, interest, privilege, easement, franchise

and right therein, or appurtenant thereto, legal or equitable,

including restrictions of record, created by plat, covenant, or

otherwise, rights-of-way, and terms for years;

(8) “Redevelopment” shall mean the clearance, replanning,

reconstruction or rehabilitation of any blighted area, and the pro-

vision for such industrial, commercial, residential or public

structures and spaces as may be appropriate, including recrea-

tional and other facilities incidental or appurtenant thereto;

(9) “Redevelopment project” shall mean a specific work or

improvement to effectuate all or any part of a development plan;

(10) “Urban redevelopment corporation” shall mean a cor-

poration organized under the provisions of this chapter; pro-

PERS ANI TUTT Vt

on niet ,

—

vided, however, that any life insurance company organized under

the laws of, or admitted to do business in, the state of Missouri

may from time to time within five years after April 23, 1946,

undertake, alone or in conjunction with, or as a lessee of any

such life insurance company or urban redevelopment corpora-

tion, a redevelopment project under this chapter, and shail, in its

operations with respect to any such redevelopment project, but

not otherwise, be deemed to be an urban redevelopment cor-

poration for the purposes of this section and sections 353.010,

353.040, 353.060 and 353.110 to 353.160.

Amended by Laws 1969, p. 501, § 1, Laws 1976 p. 729, § 1.

353.030. Organization of corporation—contents of articles of

agreement

Corporations referred to in this chapter as urban redevelop-

ment corporations may be organized in the following manner:

The articles of agreement or association shall be prepared, sub-

scribed or acknowledged, and filed in the office of the secretary

of state pursuant to the general corporations laws of the state and

shall contain:

(1) The name of the proposed corporation, which must have

the words “redevelopment corporation” as a part thereof.

(2) The purposes for which it is formed which shall be as

follows: To acquire, construct, maintain and operate a redevelop-

ment project or redevelopment projects in accordance with the

provisions of this law.

(3) The amount of the capital stock, and if any be preferred

stock the preference thereof.

(4) The number of shares of which the capital shall consist

all of which shall have a par value.

(5) The city in which its principal business office is to be

located.

(6) Its duration, which shall not exceed ninety-nine years.

— A-20 —

(7) The number of directors, which shall not be less than

three, nor more than thirteen.

(8) The names and post-office addresses of the directors for

the first year, at least one of whom shall be a resident of the

state of Missouri.

(9) The names and post-office addresses of the subscribers to

the articles of association or agreement.

(10) A provision that in the event that income debenture cer-

tificates are issued by the corporation, the owners thereof shall

have the same right to vote as they would have if possessed of

certificates of stock of the amount and par value of the income

debenture certificates held by them. The articles may provide

for the retirement of income debenture certificates or preferred

stock of the corporation as and when there shall be funds avail-

able in the treasury of the corporation from the receipt of

amortization or sinking fund in installments for the purpose.

Interest shall not be paid by the corporation upon such income

debenture certificates in excess of nine percent per annum. Pro-

vided, however, that this limitation shall not apply to other debt

of the corporation.

(11) A declaration that the corporation has been organized to

serve a public purpose; that all real estate acquired by it and all

structures erected by it are to be acquired for the purpose of pro-

moting the public health, safety and welfare, and that the stock-

holders of the corporation shall when they subscribe to and

receive the stock thereof, agree that the net earnings of the cor-

poration shall be limited to an amount not to exceed eight per-

cent per annum of the cost to such corporation of the redevelop-

ment project including the cost of the land, or the balances of

such cost as reduced by amortization payments; provided, that

the net earnings derived from any redevelopment project shall

in no event exceed a sum equal to eight percent per annum upon

the entire cost thereof. Such net earnings shall be computed after

deducting from gross earning the following:

—

(a) All costs and expenses of maintenance and operation;

(b) Amounts paid for taxes, assessments, insurance premiums

and other similar charges;

(c) An annual amount sufficient to amortize the cost of the

entire project at the end of the period, which shall not be more

than sixty years from the date of completion of the project.

The development plan may contain provisions satisfactory to the

legislative authority authorizing such plan that any surplus earn-

ings in excess of the rate of net earnings provided in this chapter

may be held by the corporation as a reserve for maintenance of

such rate of return in the future and may be used by the corpora-

tion to offset any deficiency in such rate of return which may

have occurred in prior years; or may be used to accelerate the

amortization payments; or for the enlargement of the project;

or for reduction in rentals therein; provided, that any excess

of such surplus earnings remaining at the termination of the tax

relief granted pursuant to section 353.110 shall be turned over

by the corporation to the city.

(12) A declaration that such corporations are recognized for

the purpose of the clearance, replanning, reconstruction or re-

habilitation of blighted areas, and the construction of such in-

dustrial, commercial, residential or public structures as may be

appropriate, including provisions for recreational and other fa-

cilities incidental or appurtenant thereto.

Amended by Laws 1969, p. 501, § 1; Laws 1974, 2nd Ex.Sess.,

p. .., S.B.No.1, § 1, effective Jan. 9, 1975.

353.040. Life insurance company operating as urban redevelop-

ment corporation—limitation on earnings-—dispo-

sition of surplus

1. Any life insurance company operating as an urban rede-

velopment corporation under this chapter shall be limited in its

net earnings derived exclusively from the ownership or operation

hin

of any redevelopment project on real property owned by, or

leased to, any such life insurance company, and constructed pur-

suant to a redevelopment plan to an amount not to exceed eight

per cent per annum of the cost to such company of the redevelop-

ment project including the cost of the land, or the balances of

such cost as reduced by amortization payments; provided, that

the net earnings derived from any redevelopment project shall

in no event exceed a sum equal to eight per cent per annum upon

the entire cost thereof. Such net earnings shall be computed af-

ter deducting from gross earnings the following:

(1) All costs and expenses of maintenance and operation;

(2) Amounts paid for taxes, assessments, insurance premiums

and other similar charges;

(3) An annual amount sufficient to amortize the cost of the

entire project at the end of the period, which shall be not more

than sixty years from the date of completion of the project.

2. The development plan may contain provisions satisfactory

to the legislative authority authorizing such plan that any

surplus earnings in excess of the rate of net earnings provided

in this chapter may be held by the company as a reserve for

maintenance of such rate of return in the future and may be

used by the company to offset any deficiency in such rate of re-

turn which may have occurred in prior years; or may be used to

accelerate the amortization payments; or for the enlargement of

the project; or for reduction in rentals therein; provided, that

any excess of such surplus earnings remaining at the termination

of the tax relief granted pursuant to section 353.110 shall be

turned over by the company to the city. (L.1945 p. 1242 § 4;

L.1947 V. I p. 393)

353.050. Use of word “redevelopment” prohibited—excep-

tions

No corporation now organized under the laws of this state

shall change its name to a name, and no such corporation here-

Aad ate Sate Pe am ae -

line tin

— A-23 —

after organized shall have a name, containing the word “redevel-

opment” as a part thereof except as provided in this chapter. No

foreign corporation now authorized to do business in this state

shall change its name to a name, and no such corporation shall

hereafter be authorized to do business in the state with a name

containing the word “redevelopment” as a part thereof. (L.1945

p. 1242 § 5)

353.060. Urban redevelopment corporation may operate one

or more development projects—powers

An urban redevelopment corporation shall operate under this

chapter on one or more redevelopment projects pursuant to an

authorized development plan, and with respect to each such proj-

ect shall have such rights, powers, duties, immunities and obli-

gations, not inconsistent with the provisions of this law, as may

be conferred upon it by city ordinance duly enacted by the legis-

lative authority of a city affected by this chapter which is au-

thorizing or has authorized such plan; provided, however, that

notwithstanding the provisions of this section, such urban rede-

velopment corporation may, as a redeveloper under the provi-

sions of the land clearance for redevelopment authority law, ac-

quire property, by purchase or lease, from a land clearance for

redevelopment authority as defined in said law, in the manner

and under the terms and conditions specified in said law. (L.

1945 p. 1242 § 6; L.1951, p. 364, § 1)

353.070. General corporation laws unless conflicting apply

The provisions of the general corporation laws, as presently in

effect and as hereafter from time to time amended, shall apply

to urban redevelopment corporations, except where such provi-

sions are in conflict with the provisions of this law. (L.1945 p.

1242, § 7)

353.080. Notice of meetings to holders of income debentures

In the event that any action with respect to which the holders

of income debentures shall have the right to vote is proposed to

—_

be taken, notice of any meeting at which such action is proposed

to be taken shall be given to such holders in the same manner

and to the same extent as if they were stockholders entitled to

notice of and to vote at such meeting, and any articles filed pur-

suant to law in the office of the secretary of state with respect to

any such action, whether taken with or without meeting, and any

affidavit required by law to be annexed to such articles shall con-

tain the same statements or recitals, and such articles shall be

subscribed and acknowledged, and such affidavit shall be made,

in the same manner as if such debenture holders were stockhold-

ers holding shares of an additional class of stock entitled to vote

on such action, or with respect to the proceedings provided for

in such document. (L.1945 p. 1242 § 7)

353.090. Maintain reserves for specific purposes

An urban redevelopment corporation shall establish and main-

tain depreciation, obsolescence, and other reserves, also surplus

and other accounts, including, among others, a reserve for the

payment of taxes according to recognized standard accounting

practices. (L.1945 p. 1242 § 8)

353.100. When corporation may pay interest on its income

debentures or dividends on its stock

No urban redevelopment corporation shall pay any interest on

its income debentures or dividends on its stock during any divi-

dend year unless there shall exist at the time of such payment

no default under any amortization requirements with respect to

its indebtedness, nor unless all accrued interest, taxes and other

public charges shall have been duly paid or reserves set up for

the payment thereof, and adequate reserves provided for depre-

ciation, obsolescence and other proper reserves. (L.1945 p. 1242

$ 9)

353.110. Real property exempt from taxation—limitation

1. The real property of urban redevelopment corporations ac-

quired pursuant to this chapter shall not be subject to assess-

Breet eis eee te deel eRe

ee

—

ment or payment of general ad valorem taxes imposed by the

cities affected by this law, or by the state or any political subdi-

vision thereof, for a period of ten years after the date upon

which such corporations become owners of such real property,

except to such extent and in such amount as may be imposed

upon such real property during said period measured solely by

the amount of the assessed valuation of the land, exclusive of

improvements, acquired pursuant to this chapter and owned by

such urban redevelopment corporation, as was determined by the

assessor of the county in which such real property is located, or,

if not located within a county, then by the assessor of such city,

for taxes due and payable thereon during the calendar year pre-

ceding the calendar year during which the corporation acquired

title to such real property, and the amounts of such tax assess-

ments shall not be increased during said ten-year period so long

as the real property is owned by an urban redevelopment corpo-

ration and used in accordance with a development plan author-

ized by the legislative authority of such cities.

2. In the event, however, that any such real property was tax

exempt immediately prior to ownership by any urban redevelop-

ment corporation, such assessor or assessors shall, upon acquisi-

tion of title thereto by the urban redevelopment corporation,

promptly assess said land, exclusive of improvements, at such

valuation as shall conform to but not exceed the assessed valua-

tion made during the preceding calendar year of other land, ex-

clusive of improvements, adjacent thereto or in the same general

neighborhood, and the amount of such assessed valuation shall

not be increased during the ten-year period aforesaid so long as

the real property is owned by an urban redevelopment corpora-

tion and used in accordance with a development plan authorized

by the legislative authority of such cities. For the next ensuing

period of fifteen years ad valorem taxes upon such real property

shall be measured by the assessed valuation thereof as deter-

mined by such assessor or assessors upon the basis of not

to exceed fifty per cent of the true value of such real property,

— A-26 —

including any improvements thereon, nor shall such valuations

be increased above fifty per cent of the true value of such real

property from year to year during said period of fifteen years,

so long as the real property is owned by an urban redevelopment

corporation and used in accordance with an authorized develop-

ment plan. After said period totalling twenty-five years, such

real property shall be subject to assessment and payment of all

ad valorem taxes, based on the full true value of the real prop-

erty; provided, that after the completion of the redevelopment

project, as authorized by law or ordinance whenever any urban

redevelopment corporation shall elect to pay full taxes, or at the

expiration of said twenty-five-year period, such real property

shall be owned and operated free from any of the conditions, re-

strictions or provisions of this chapter, and of any ordinance, rule

or regulation adopted pursuant thereto, and other law limiting

the right of domestic and foreign insurance companies to own

and operate real estate to the contrary notwithstanding. (L.1945

p. 1242 § 10; L.1947 V. I p. 393)

353.120. Transfer by fiduciaries and public agencies of real

property to a redevelopment corporation

Notwithstanding any requirement of law to the contrary, or the

absence of direct provision therefor in the instrument under

which a fiduciary is acting, every executor, administrator, trus-

tee, guardian or any other person, holding trust funds or acting

in a fiduciary capacity, unless the instrument under which such

fiduciary is acting expressly forbids, also the state, its subdivi-

sions, cities, all other public bodies, all public officers, corpora-

tions, organized under or subject to the provisions of the bank-

ing law (including savings banks, savings and loan associations,

trust companies, private bankers and private banking corpora-

tions), the state commissioner of finance as conservator, liquida-

tor or rehabilitator of any such person, partnership or corpora-

tion, person, partnership and corporations organized under or

subject to the provisions of the insurance law, the superintendent

— A-27 —

of insurance as conservator, liquidator, or rehabilitator of any

such person, partnership or corporation, any of which owns or

holds any real property within any blighted area proposed to be

cleared or redeveloped by an urban redevelopment corporation,

may grant, sell, lease or otherwise transfer any such real prop-

erty to an urban redevelopment corporation, and receive and

hold any cash, mortgages, or other securities or obligations ex-

changed therefor by such urban redevelopment corporations, and

may execute such instruments and do such acts as may be

deemed necessary or desirable by them or it and by the urban

redevelopment corporations in connection with the development

and any development plan. (L.1945, p. 1242 § 11)

353.130. Redevelopment corporation may acquire property

1. An urban redevelopment corporation may acquire real

property or secure options in its own name or, in the name of

nominees, it may acquire real property by gift, grant, lease, pur-

chase, or otherwise.

2. An urban redevelopment corporation shall have the right

to acquire by the exercise of the power of eminent domain any

real property in fee simple or other estate which is necessary to

accomplish the purpose of this chapter, under such conditions

and only when so empowered by the legislative authority of the

cities affected by this chapter.

3. An urban redevelopment corporation may exercise the

power of eminent domain in the manner provided for corpora-

tions in chapter 523, RSMo; or it may exercise the power of

eminent domain in the manner provided by any other applicable

statutory provision for the exercise of the power of eminent

domain. Property already devoted to a public use may be ac-

quired in like manner, provided that no real property belonging

to any city, county, or the state, or any political subdivision

thereof may be acquired without its consent. (L.1945, p. 1242

§ 12)

bm

353.140. Occupancy of property acquired by corporation by

previous owners—conditions

When title to real property has been vested in an urban re-

development corporation by gift, grant, devise, purchase, or by

condemnation proceedings or otherwise, the urban redevelop-

ment corporation may agree with the previous owners of such

property, or any tenants continuing to occupy or use it, or any

other persons who may occupy or use or seek to occupy or use

such property, that such former owner, tenant or other persons

may occupy or use such property upon the payment of a fixed

sum of money for a definite term or upon the payment periodi-

cally of an agreed sum of money. Such occupation or use shall

not be construed as a tenancy from month to month, nor require

the giving of notice by the urban redevelopment corporation for

the termination of such occupation or use or the right to such

occupation or use, but immediately upon the expiration of the

term for which payment has been made the urban redevelopment

corporation shall be entitled to possession of the real property

and may maintain an action for either unlawful detainer or eject-

ment for the purpose of recovering immediate possession thereof.

(L.1945 p. 1242 § 13; L.1949 H.B.No.2081)

353.150. Borrowing of money and giving of security by cor-

poration

1. Any urban redevelopment corporation may borrow funds

and secure the repayment thereof by mortgage which shall con-

tain reasonable amortization provisions and shall be a lien upon

no other real property except that forming the whole or a part

of a single development area.

2. Certificates, bonds and notes, or part interest therein, or

any part of an issue thereof, which are secured by a first mort-

gage on the real property in a development area, or any part

thereof, shall be securities in which all of the following persons,

eet atte onto celia et

— A-29 —

partnerships, or corporations and public bodies or public officers

may legally invest the funds within their control:

(1) Every executor, administrator, trustee, guardian, commit-

tee or other person or corporation holding trust funds or acting

in a fiduciary capacity;

(2) Persons, partnerships and corporations organized under

or subject to the provisions of the banking law (including sav-

ings banks, savings and loan associations and trust companies);

(3) The state commissioner of finance as conservator, liqui-

dator or rehabilitator of any such person, partnership or cor-

poration;

(4) Persons, partnerships or corporations organized under or

subject to the provisions of the insurance law; fraternal benefit

societies; and

(5) The state superintendent of insurance as conservator, liq-

uidator or rehabilitator of any such person, partnership or cor-

poration.

3. Any mortgage on the real property in a development area,

or any part thereof, may create a first lien, or a second or other

junior lien, upon such real property.

4. Any urban redevelopment corporation may sell or other-

wise dispose of any or all of the real property acquired by it for

the purposes of a redevelopment project. In the event of the sale

or other disposition of real property of any urban redevelopment

corporation by reason of the foreclosure of any mortgage or

other lien, through insolvency or bankruptcy proceedings, by or-

der of any court of competent jurisdiction, by voluntary transfer

or otherwise, and the purchaser of such real property of such

redevelopment corporation shall continue to use, operate and

maintain such real property in accordance with the provisions of

a

— A-30 —

any development plan, the legislative authority of any city af-

fected by the provisions of this chapter, may grant the partial

tax relief provided in section 353.110; but if such real property

shall be used for a purpose different than that described in the

redevelopment plan, or in the event that the purchaser does not

desire the property to continue under the redevelopment plan,

or if the legislative authority shall refuse to grant the purchaser

continuing tax relief, the real property shall be assessed for ad

valorem taxes upon the full true value of the real property and

may be owned and operated free from any of the conditions, re-

strictions or provisions of this chapter. (L.1945 p. 1242 § 14)

353.160. May accept grants or loans from the United States

government

Any urban redevelopment corporation may accept grants or

loans of money from the government of the United States or any

department or agency thereof. (L.1945 p. 1242 § 15)

353.170. City may acquire, clear, convey or lease property

for use in redevelopment project

Any city subject to this chapter shall have power:

(1) To acquire by the exercise of the power of eminent do-

main, Or otherwise, an area designated on a master plan under

the authority of the legislative authority of the city as a rede-

velopment area;

(2) To clear any such real property and install, construct, and

reconstruct streets, utilities and any and all other city improve-

ments necessary for the preparation of such area for use in ac-

cordance with the provisions of this chapter; and

(3) To sell or lease such real property for use in accordance

with the provisions of this chapter. (L.1945 p. 1242 § 16)

thn -

— A-31 —

353.180. Any corporation may purchase shares of stock of

urban redevelopment corporation

Any corporation organized under the laws of the state of Mis-

souri, or admitted to do business in the state of Missouri, shall

have power to purchase any or all of the shares of stock of an

urban redevelopment corporation organized under the provisions

of this chapter. (L.1945 p. 1242 § 17)

— A-32 —

APPENDIX D

In the United States District Court

Eastern District of Missouri

Eastern Division

Thomas W. Garland, Inc., a Missouri )

Corporation,

Plaintiff,

The City of St. Louis, a Constitu-

tional Charter City of the State of

Missouri,

and

Civil Action No.

78-0129-C(3)

—,-

Manley Investment Company, a Mis-

souri Corporation,

Defendants. -

COMPLAINT

(Filed January 30, 1978)

1. This action arises under the Constitution of the United

States, Amendment V, and Amendment XIV of the Constitu-

tion of the United States as hereinafter more fully appears. The

matter in controversy exceeds, exclusive of interest and costs,

the sum of $10,000.00. Jurisdiction is thereof being conferred

upon this Court by Section 1331, Title 28, United States Code.

2. Plaintiff is a corporation duly organized and existing un-

der the laws of the State of Missouri, with its main office loca-

tion in the City of St. Louis, State of Missouri, at 410 North

Sixth Street, and hereinafter referred to as “Garland’s”.

— A-33 —

3. Defendant The City of St. Louis is a municipal corpora-

tion organized and existing as a Constitutional Charter City

under the laws of the State of Missouri and hereinafter referred

to as “The City”.

4. Defendant Manley Investment Company is a Missouri

corporation duly organized under the laws of the State of Mis-

souri, whose registered agent is W. David Wells, One Mercan-

tile Center, Suite 3400, St. Louis, Missouri 63101, and here-

inafter referred to as “Manley”. Manley is made a party to this

action because it now owns the fee title to property involved

herein.

5. Since 1895 Garland’s has been in the business of oper-

ating women’s ready-to-wear stores in the downtown business

area of the City of St. Louis at or near its present location.

On November 28, 1952, Garland’s entered into a lease of the

premises in City Block 118 of the City of St. Louis, Missouri,

known and numbered as 410-414 North Sixth Street. The term

of the lease was for thirty years, commencing December 5,

1952, and expiring December 4, 1982, the annual rent being

$50,400.00 plus all taxes levied. It has been defined as a net,

net lease.

6. Garland’s operates a retail store at the leased premises

and part of the premises serves as the company headquarters,

which includes its administrative offices and shipping and re-

ceiving department, providing the necessary administration sup-

port for the retail store located there and other branch stores

located in the City and County of St. Louis, Missouri, and its

recently acquired retail store in Illinois. Until on or about

April 1, 1974, the leased premises also contained Plaintiff's

fur storage vault. The annual gross sales of the retail store

located on the above-described leased premises during the years

1971, 1972 and 1973 were approximately $1 million. Sub-

stantial amounts of money have been invested by Plaintiff in

|

the physical improvements of the described leased premises to

provide facilities for the operation of the retail store and the

portion of the leased premises used for company headquarters,

administrative operations, shipping and receiving department,

and fur storage vault. Additional physical improvements have

been made by way of repairs to maintain and to upgrade the

building in its continuing use, and other improvements have

been made to meet the requirements set forth in the lease and

meet the standards required by ordinances of Defendant The

City.

7. On or about June 29, 1971, the Board of Aldermen of

The City of St. Louis passed Ordinance No. 55952, which be-

came law, providing that the entire downtown business area

of the City of St. Louis, with some exceptions, was blighted

as defined in Section 29.020, Revised Code of the City of St.

Louis, Missouri, and that such area should be redeveloped as

provided for by Chapter 353 of Missouri Revised Statutes 1969.

The leased premises of Garland’s at 410-414 North Sixth Street

are included in the area described by this ordinance as being

blighted. A copy of said ordinance is attached hereto as Ex-

hibit “A” and by this reference incorporated herein as if more

fully set forth.

8. On or about April 5, 1973, the Board of Aldermen

passed Ordinance No. 56476, which became law, providing

for a contract between The City and Mercantile Center Re-

development Corporation (hereinafter referred to as “Mercan-

tile”). Mercantile is a corporation which was duly organized

in the State of Missouri as of October 10, 1972, with a capital

of $30,000.00, under the Urban Redevelopment Corporation

laws of Missouri. Under the terms of the contract approved

by Ordinance No. 56476 Mercantile was to undertake a $150

million redevelopment of six city blocks of the downtown busi-

ness area previously declared blighted, which included City

Block 118 wherein is located the Garland’s leased store. The

ee

— A-35 —

ordinance also provides for the vacating of St. Charles Street,

a one-way street, as a public thoroughfare which is used by

Garland’s as the only means of ingress of commercial delivery

vehicles into the shipping and receiving area located on the

alley behind the leased building. Much publicity and many

public announcements were made of the passing of the ordi-

nance and proposed redevelopment project. The ordinance also

purports to grant to Mercantile the power to condemn property

which was included in the proposed redevelopment area. The

ordinance also provides that The City can also exercise the

power of condemnation in the proposed redevelopment area.

A copy of said ordinance is attached hereto as Exhibits “B-1”

and “B-2” and by this reference incorporated herein as if more

fully set forth. (Two different copies of the ordinance were

published bearing the same date.)

9. On or about March 23, 1973, and thereafter, agents for

Mercantile advised and stated to Garland’s officers that they

would need Garland’s leased property vacated by September,

1974, in order to proceed with the development of the two

city block area, which includes City Blocks 118 and 119. Phase

II of the redevelopment, under the terms of the Redevelopment

Contract, Ordinance No. 56476, required Mercantile to erect

a hotel of twenty-five stories with approximately 800 rooms

and self-contained parking for 200 cars, containing a gross

floor area of approximately one million square feet in the said

City Blocks 118 and 119. This phase of redevelopment was to

commence not later than April 5, 1976.

10. Commencing in the spring of 1973 Garland’s, relying

on the statements made to it by the agents of Mercantile and

the terms and provisions of the contract under Ordinance No.

56476 between The City and Mercantile that it would be re-

quired to vacate its premises in City Block 118 by September,

1974, immediately undertook efforts to locate new space to

replace, in the downtown business area of the City of St. Louis

— A-36 —

and elsewhere, its business premises scheduled to be taken as

a part of the redevelopment plan. Garland’s found none avail-

able to it in the City of St. Louis downtown area because,

among other things, the entire downtown business area, with

few exceptions, had been declared blighted by The City and

rental costs in the redeveloped facilities, including the Mercan-

tile Center Redevelopment Corporation’s new proposed de-

velopments, were too high to economically support a business

of the type operated by Plaintiff. Garland’s then found and

leased on or about August 22, 1973, premises in West St. Louis

County for its headquarters office, administrative offices, ship-

ping and receiving functions and fur storage vaults. On or about

April 1. 1974, Garland’s, having constructed a new fur storage

vault on the said premises, physically moved that portion of

its operation from the store located in City Block 118. Also, to

provide retail facilities to its many East Side (Illinois) custom-

ers and replace the store on the leased premises in City Block

118 which had been patronized by them, Plaintiff on or about

December 10, 1973, entered into a lease for a retail store in

Fairview Heights, Illinois, in the St. Clair Square Shopping

Center. Additionally, to replace the retail store in City Block

118 and provide facilities for the many Southeast Missouri and

Southwest Illinois customers who used the arterial highway

system to patronize the store at 410-414 North Sixth Street,

Garland’s entered into a lease for a retail store in the South

County Shopping Center located in South St. Louis County,

Missouri, on or about November 29, 1974. Plaintiff had to

expend approximately $490,000.00 for capital improvements

to prepare these three facilities for occupancy.

11. All of the undertakings set forth in Paragraph 10 were

required to prevent a material disruption of Plaintiff's business

and substantial economic loss which would have occurred as a

direct result of the loss of the leased premises located in the

proposed redevelopment area of City Block 118. They were all

undertaken at that time in reliance on the statements made to

—

Plaintiff's officers by agents of Mercantile that the property

would have to be vacated by September, 1974, and in con-

sideration of the terms and provisions of the contract between

The City and Mercantile. Such expansion was not in accordance

with the normal methods of operation and opening new stores

by Garland’s because it required the use of a large amount of

borrowed capital to finance the construction of improvements

and, further, because of the marginal operations of new stores

until they have time to build up a trade at a new location,

normally a period of three to five years, during which time they

are not economically self-supporting. Such undertakings strained

the financial resources of Garland’s.

12. Defendant Manley, incorporated under Missouri law on

May 10, 1972, with an authorized capital of $30,000.00, to the

best of Plaintiff's knowledge, information and belief, commenced

in 1973 and 1974 to acquire the ownership of the property in

City Blocks 118 and 119, as agent for Mercantile, and caused the

properties to be vacated and the buildings thereon wrecked by

the “headache ball” method. With the exception of Garland’s

store and a jewelry company which moved to the building south

of Garland’s, the entire two block area was stripped of its busi-

ness and commercial enterprises. That part of City Block 118

behind Plaintiff was turned into a parking lot and the stores and

buildings along Sixth Street in City Blocks 118 and 119, with the

exception noted above, are vacant buildings, a couple of which

have recently been rented on short-term indefinite bases. The ef-

fect of these actions by The City in blighting the area and sched-

uling the redevelopment of City Blocks 118 and 119 by the terms

of the contract with Mercantile was a destruction of the business

character of the east side of Sixth Street and the area surrounding

the Garland store in City Block 118. Condemnation blight has

taken over the two city blocks area making Garland’s leased

premises unattactive for the use for which it was leased. All of

these acts by The City have deprived Garland’s of the full use

and economic value of its lease. All the changes were made for

— A-38 —

the purpose of carrying out the plan of redevelopment and were

being done by The City under its authority for the public pur-

pose of clearing and developing an area The City claims to be

blighted. On January 22, 1975, Manley acquired the fee interest

to the premises known as 410-414 North Sixth Street, subject

to Garland’s lease. As a direct result of these acts of The City

in blighting and authorizing the removal of buildings and grant-

ing right of condemnation for the purpose of redevelopment,

sales in the Garland store located on the said premises have

consistently declined since 1973, while saies in its other stores

have shown an increase, the area around Plaintiff's premises in

City Block 118 has been economically depressed, and since April

1, 1974, Plaintiff has been deprived of the full use and benefit

of its leasehold interest in the said property.

13. The City, though taking actions which destroyed the eco-

nomic value of Plaintiff's leasehold for a public purposes, has

never offered to purchase or compensate Garland’s for the taking

of its leasehold interest. The City, by passing Ordinances No.

55952 and No. 56476 and by contracting with Mercantile to

redevelop the area in City Blocks 118 and 119, effected a de

facto, if not an actual, condemnation of Garland’s leasehold

interest as of April 1, 1974. Since that date Plaintiff's leasehold

has been deprived of its economic value for which it should be

compensated according to law. As a direct result of such taking

and delay in proceeding with the condemnation, The City has

caused consequential damages in addition to the actual damages

for the taking of the leasehold interest by causing Plaintiff to

have to continue to pay taxes, rent, insurance and maintenance

on the premises for a portion of the year 1974 and the years

1975, 1976 and 1977. Plaintiff will continue to suffer such

consequential damages until its leasehold has been legally termi-

nated and compensated for according to law.

14. The law of Missouri as stated by the Missouri Supreme

Court is that there is no condemnation until the actual filing of

OA hi Re ERIN bh areas SO ne

—

suit and payment of Commissioner’s Award for the property and

passing of title. The time for commencing the phase of redevel-

opment encompassing City Blocks 118 and 119 has now passed

and, except for the removing of buildings and business from the

area, the boarding-up of vacant buildings, no further action of

redevelopment is presently planned because of lack of proper

financing required by the project. Plaintiff, relying on the re-

quirements of the redevelopment ordinance and relying on the

representations of the agents of the redevelopment corporation,

has expended large sums of money to acquire facilities to re-

place the leasehold taken and, as a direct result of the delay

in proceeding with the plan, is still being forced to operate the

facilities it replaced. The City has created condemnation blight

in the area around Plaintiff's leasehold property which has de-

stroyed the economic value, benefit and full use of the lease

and hence Plaintiff is being deprived of its property by De-

fendant City of St. Louis for a public purpose, and it has taken

Garland’s property for a public use as stated in the above-ref-

erenced ordinance without just compensation, all of which are

a direct violation of the Fifth Amendment of the Constitution

of the United States and the Fourteenth Amendment of the Con-

stitution of the United States. In causing and permitting the

threat of condemnation to hang over Plaintiff's leasehold prop-

erty and the action of The City in destroying the commercial

character of the two City Blocks 118 and 119 by permitting

condemnation blight to set into the said area for a period of

over four years was an abuse of the power of eminent domain,

which deprived Plaintiff of the full use and benefit and right

to exercise the full rights under its leasehold interest in the said

property, amounting to taking or damaging of Plaintiff's property

without due process of law and denial of equal protection of the

laws, all in violation of Plaintiff's constitutional rights under the

Fourteenth Amendment of the Constitution of the United States.

15. The value of the leasehold at the time of the taking was

approximately $659,000.00, which is just compensation there-

Se

see

for, consequential damages incurred as a direct result of the

taking, causing Garland’s to remain and continue to carry on

business with the expenditure of attending expenses in the prem-

ises located at 410-414 North Sixth Street in City Block 118

from April 1, 1974, to December 31, 1977, during which time

the lease was devoid of economic value by the conduct and

action of The City, which resulted in moving out establishes

businesses from City Blocks 118 and 119 and tearing down the

buildings, permitting condemnation blight to set in, and destroy-

ing its business character. Two elements of these consequential

damages are the amount of rent paid for the period, which is

in the sum of $187,304.85, and the amount of taxes paid during

this period as additional rent, which is in the amount of $44,-

185.09. Plaintiff has further suffered consequential damages as

a direct result of the taking during the period in an amount

representing the cost of insurance and maintenance for said

premises, which is in the sum of $64,822.00. In addition, as

a direct result of the action of The City in condemning the

premises of Garland’s, it has suffered additional consequential

injury and damage to its business as a direct result of the taking

in the sum of $700,000.00. Additional consequential damages

as yet undetermined will result to Plaintiff until its leasehold

and the obligations thereunder are terminated by law.

16. There presently is an impossibility of performance of the

lease dated November 28, 1952; that performance of said lease

has been rendered impossible by the acts of The City in passing

Ordinances No. 55952 and No. 56476 and the actions taken in

pursuance thereof which have depressed and stripped the area

around Plaintiff's premises of its business and commercial char-

acter and rendered its once profitable lease valueless.

WHEREFORE, Plaintiff prays for judgment herein against

Defendant The City of St. Louis in the sum of $659,000.00 as

just compensation for the condemnation and taking of Plaintiff's

leasehold interest in and improvements of the property located

in City Block 118, known and numbered as 410-414 North Sixth

— |

Street, and for the sum of $296,311.94 for the consequential

damages suffered by Plaintiff as a direct result of condemnation

of Plaintiff's leasehold interest in said property which accrued

during the period of April 1, 1974, to December 31, 1977, and

for such amounts as the Court finds due on the evidence adduced

from January 1, 1978, to the date of the judgment herein; and

for a judgment in the sum of $700,000.00 as and for the conse-

quential damages to Plaintiff's business broken up and inter-

rupted by the taking of Plaintiff's leasehold interest for a public

purpose; and for an order of Court adjudging and decreeing

herein that the lease dated November 28, 1952, on said property

between Plaintiff and Defendant Manley Investment Company

is terminated, null and void and no effect as to Plaintiff, and

that Plaintiff has no further liabilities thereunder; and further

Plaintiff prays for a judgment that all sums herein awarded as

just compensation for the taking of the leasehold include interest

at the rate of 6% per annum from the date of such taking to

the date of the entry of this judgment; and for its costs herein

expended, and for such other and further relief as to this

Honorable Court may seem meet, just and proper in the prem-

ises. Plaintiff requests a trial by jury on any and all issues

herein made by this Complaint.

/s/ ALLEN A. YODER

700 Boatmen’s Tower

100 North Broadway

St. Louis, Missouri 63102

241-5845

Attorney for Plaintiff

OF COUNSEL:

RASSIEUR, LONG, YAWITZ & SCHNEIDER

700 Boatmen’s Tower

100 North Broadway

St. Louis, Missouri 63102

241-5845

— So

EXHIBIT A

Ordinance 55952

(B.B. No. 81)

An ordinance finding that a certain blighted area as defined in

Section 29.020 of the Revised Code of the City of St. Louis, Mis-

souri, exists in the City of St. Louis, and that the redevelopment

of such area is necessary and in the public interest under Chapter

353 of the Revised Statutes of Missouri, 1959, as amended,

and under said ordinance, and is in the interest of the public

health, safety, morals, and general welfare of the people of the

City of St. Louis and that such area is described as follows:

Parcel No. 1

Beginning at the northwest corner of City Block 825, said cor-

ner being the intersection of the east line of Twelfth Boulevard

and the south line of Delmar Boulevard; thence eastwardly

along the south line of Delmar Boulevard to the northwest cor-

ner of City Block 166, said corner being the intersection of the

south line of Delmar Boulevard and the east line of Eighth Street;

thence southwardly along the east line of Eighth Street to the

southwest corner of City Block 166, said corner being the inter-

section of the east line of Eighth Street and the north line of

Lucas Avenue; thence eastwardly along the north line of Lucas

Avenue to the southeast corner of City Block 166, said corner

being the intersection of the north line of Lucas Avenue and the

west line of Seventh Street; thence northwardly along the west

line of Seventh Street to the northeast corner of City Block

166, said corner being the intersection of the west line of

Seventh Street and the south line of Delmar Boulevard; thence

eastwardly along the south line of Delmar .Boulevard to the

northwest corner of City Block 121, said corner being the in-

tersection of the south line of Delmar Boulevard and the east

— ee

line of Sixth Street; thence southwardly along the east line of

Sixth Street to the southwest corner of City Block 121, said

corner being the intersection of the east line of Sixth Street

and the north line of Lucas Avenue; thence eastwardly along

the north line of Lucas Avenue to the southeast corner of City

Block 121, said corner being the intersection of the west line

of Broadway and the north line of Lucas Avenue; thence

northwardly along the west line of Broadway to the northeast

corner of City Block 121, said corner being the intersection

of the west line of Broadway and the south line of Delmar

Boulevard; thence eastwardly along the south line of Delmar

Boulevard to the northwest corner of City Block 6489, the said

corner being the intersection of the east line of Fourth Street

and the south line of Delmar Boulevard; thence eastwardly

along the south line of Delmar Boulevard and the eastern pro-

jection thereof to the center line of the Mark Twain Expressway

(Interstate Highway 70); thence southwardly along the center

line of said expressway to the eastward projection of the former

center line of vacated Lucas Avenue, vacated by Ordinance

50609; thence westwardly along said projection and _ said

former center line of vacated Lucas Avenue to the east line

of Fourth Street; thence southwardly along the east line of

Fourth Street to its intersection with the eastern projection of

the south line of St. Charles Street; thence westwardly along

this south line projection and the south line of St. Charles

Street to the southward projection of a line in City Block 97,

said line being 90 feet 2 inches, more or less, west of and

parallel to the west line of Fourth Street; thence northwardly

along this line through City Block 97 to the south line of Wash-

ington Avenue; thence westwardly along the south line of Wash-

ington Avenue to the northwest corner of City Block 97, said

corner being the intersection of the south line of Washington

Avenue and the east line of Broadway; thence south along the

east line of Broadway to the southwest corner of City Block

98, said corner being the intersection of the east line of Broad-

SSS t—t

=e ee

way and the north line of Locust Street; thence eastwardly

along the north line of Locust Street and its eastward projection

to the east line of Fourth Street; thence southwardly along the

east line of Fourth Street to the northwest corner of City Block

86, said corner being the intersection of the east line of Fourth

Street and the south line of Pine Street; thence westwardly

along the south line of Pine Street to the northwest corner of

City Block 101, said corner being the intersection of the south

line of Pine Street and the east line of Broadway; thence north-

wardly along the east line of Broadway projected to the center

line of Pine Street; thence westwardly along the center line of

Pine Street to the projected east line of Sixth Street; thence

northwardly along the projected east line of Sixth Street and

the east line of Sixth Street to the southwest corner City Block

117, said corner being the intersection of the east line of Sixth

Street and the north line of Olive Street; thence east 128 feet,

more or less, to the former west line of a 15 foot wide alley

vacated by Ordinance 45553; thence north 114 feet 3 inches,

more or less, along the former west alley line to an east-west

line 114 feet 3 inches, more or less, north of and parallel to

the north line of Olive Street; thence west on this east-west

line projected to the west line of Sixth Street; thence south-

wardly on the west line of Sixth Street to a property line in

City Block 129, said property line being the south line of prop-

erty now or formerly belonging to Lauer-Enloe Limited and is

54 feet 6 inches, more or less, north of the intersection of the

west line of Sixth Street and the north line of Pine Street; thence

westwardly along this said property line and its westward pro-

jection to the west line of a north-south alley in City Block

129; thence northwardly along the west line of said alley to

the south line of Olive Street; thence westwardly along the

south line of Olive Street to the northwest corner of City Block

129, said corner being the intersection of the south line of

Olive Street and the east line of Seventh Street; thence south-

wardly along the east line of Seventh Street to the north line of

|

H

ae

— oe

Seventh Street vacated by Ordinance 50495; thence westwardly

12 feet to the new east line of Seventh Street established by

Ordinance 50495; thence southwardly along this said east line

of 174.89 feet, more or less, to the southwest corner of City

Block 129, said corner being the intersection of the east line

of Seventh Street and the north line of Pine Street established

by Ordinance 50595; thence westwardly along the north line

of Pine Street to the west line of an 7 foot 6 inch wide alley

in City Block 182; thence northwardly along the said west alley

line and its northward projection to the south line of Olive

Street; thence westwardly along the south line of Olive Street

to the northwest corner of City Block 182; said corner being

the intersection of the south line of Olive Street and the east

line of Eighth Street; thence southwardly along the east line of

Eighth Street to the northwest corner of City Block 183, said

corner being the intersection of the east line of Eighth Street

and the south line of Pine Street; thence eastwardly along the

south line of Pine Street and its eastward projection to the center

line of Seventh Street; thence southwardly along the center line

of Seventh Street to its intersection with the eastern projection

of the north line of Chestnut Street; thence westwardly along the

north line of Chestnut Street to its intersection with the west

line of a 20 foot wide alley in City Block 502, said alley inter-

section being 177 feet 7 inches, more or less, west of the inter-

section of the west line of Eleventh Street and the north line

of Chestnut Street; thence northwardly along the said west

alley line to its intersection in parcel 14 with the north line

of a 15 foot wide alley; thence east along this north alley line

to the east line of parcel 14, said parcel line is also the west

line of parcel 15; thence northwardly along the parcel line to its

intersection with the south line of Pine Street; thence westwardly

along the south line of Pine Street to its intersection with the

southern projection of the west line of a 20 foot wide alley in

City Block 503; thence northwardly along the said alley projec-

tion and the west line of the 20 foot wide alley in City Block

— | oe

503 to its intersection with the north line of a 20 foot wide

east-west alley; thence eastwardly along the north line of this

east-west alley 97 feet 4 inches, more or less, to a property line,

said property line being the west line of property now or formerly

belonging to Eleven Twenty Olive Incorporated; thence north-

wardly 104 feet 1 inch, more or less, to the south line of Olive

Street; thence westwardly along the south line of Olive Street

to the intersection of the southern projection of the former west

line of a 20 foot wide alley in City Block 516 vacated by Ordi-

nance 42075; thence northwardly along this southern projection

and former west alley line in City Block 516 & the south line

of a 15 foot wide east-west alley; thence eastwardly along the

south alley line 158.33 feet, more or less, to the southward

projection of a property line, this line being the east line of

property now or formerly belonging to the FNR Centennial Cor-

poration and the west line of property now or formerly belong-

ing to the Joseph P. Kelly Estate and Thomas F. Muldoon (Mer-

cantile Trust Company, Trustee); thence northwardly along this

southern property line projection and the property line to the

south line of Locust Street; thence westwardly along the south

line of Locust Street to the northwest corner of City Block 516,

said corner being the intersection of the south line of Locust

Street and the east line of Twelfth Boulevard; thence north-

wardly along the east line of Twelfth Boulevard to the south-

west corner of City Block 517; said corner being the inter-

section of the east line of Twelfth Boulevard and the north line

of Washington Avenue; thence east 121 feet 4 inches, more or

less, to a property line, said property line being the east line

of property now or formerly belonging to the St. Louis Union

Trust Company and the west line of property now or formerly

belonging to the Kay Realty Company; thence northwardly

along said property line to the south line of Lucas Avenue;

thence westwardly along the south line of Lucas Avenue to the

northwest corner of City Block 517, said corner being the in-

tersection of the south line of Lucas Avenue and the east line

—

of Twelfth Boulevard; thence northwardly along the east line

of Twelfth Boulevard to the northwest comer of City Block

825, the point of beginning.

Parcel No. 2

Beginning at the southwest corner of City Block 206-N, said

corner being the intersection of the east line of Twelfth Boule-

vard and the north line of Walnut Street; thence eastwardly on

the north line of Walnut Street to the center line of Eleventh

Street; thence southwardly along the center line of Eleventh

Street to the center line of Spruce Street; thence eastwardly along

the center line of Spruce Street to the northern projection at right

angles of the west line of the Missouri State Highway right-of-

way in City Block 417 and the south line of Spruce Street;

thence south and southwest along the said projection and the

irregular west line of the Missouri State Highway right-of-way

in City Block 417 to the former center line of a 15 foot wide

east-west alley vacated by Ordinance 16713, this former center

line also being a Missouri State Highway right-of-way line;

thence south on this former alley center line to its intersection

with the center line of the Daniel Boone Expressway, United

States Rte. Forty; thence westwardly along the said Expressway

center line to its intersection with the southern projection of the

east line of Twelfth Street; thence northwardly along the south-

ern projection of the east line of Twelfth Street and the east

line of Twelfth Street to the westward projection of the north

line of Spruce Street; thence eastwardly along the said projection

of the north line of Spruce Street to the southwest corner of City

Block 436, said corner being the intersection of the north line

of Spruce Street and the east line of Twelfth Boulevard; thence

northwardly along the east line of Twelfth Boulevard to the

southwest corner of City Block 206-N, the point of beginning;

describing the applicable time period for filing development

plans for all or part of the blighted area and containing an emer-

gency clause.

—_s oe

WHEREAS, by reason of age, obsolescence, inadequate or out-

moded design or physical deterioration, such area has become an

economic and social liability, by reason of which such conditions

are conducive to ill health, transmission of disease, crime or in-

ability to pay reasonable taxes; and

WHEREAS, the clearance, replanning, rehabilitation, or re-

construction of such area, and the provision for such industrial

commercial, residential, recreational, or public structures and

spaces as may be appropriate, including other facilities incidental

or appurtenant thereto, is necessary and in the public interest

under Chapter 353 of the Revised Statutes of Missouri, 1959,

as amended, and under Chapter 29 of the Revised Code of the

City of St. Louis, Missouri, and is necessary in the interest of

public health, safety, morals, and general welfare of the people

of the City of St. Louis; and

WHEREAS, such conditions are beyond remedy and control

solely by regulatory process in the exercise of the police power

and cannot be dealt with effectively by ordinary private enter-

prise without the aids provided in the “Urban Redevelopment

Corporation Law” set forth in Chapter 353, Missouri Revised

Statutes, 1959, and Chapter 29 of the Revised Code of the City

of St. Louis.

NOW, THEREFORE,

Be it ordained by the City of St. Louis, as follows:

Section One. There exists within the City of St. Louis a cer-

tain blighted area as defined by Section 353.020, Revised Stat-

utes of Missouri, 1959, and by Chapter 29 of the Revised Code

of the City of St. Louis, Missouri, described as follows:

Parcel No. 1

Beginning at the northwest corner of City Block 825,

said corner being the intersection of the east line of Twelfth

— <n

Boulevard and the south line of Delmar Boulevard; thence

eastwardly along the south line of Delmar Boulevard to the

northwest corner of City Block 166, said corner being the

intersection of the south line of Delmar Boulevard and the

east line of Eighth Street; thence southwardly along the east

line of Eighth Street to the southwest corner of City Block

166, said corner being the intersection of the east line of Eighth

Street and the north line of Lucas Avenue; thence eastwardly

along the north line of Lucas Avenue to the southeast corner

of City Block 166, said corner being the intersection of the

north line of Lucas Avenue and the west line of Seventh Street;

thence northwardly along the west line of Seventh Street to

the northeast corner of City Block 166, said corner being the

intersection of the west line of Seventh Street and the south

line of Delmar Boulevard; thence eastwardly along the south

line of Delmar Boulevard to the northwest corner of City Block

121, said corner being the intersection of the south line of Del-

mar Boulevard and the east line of Sixth Street; thence south-

wardly along the east line of Sixth Street to the southwest cor-

ner of City Block 121, said corner being the intersection of the

east line of Sixth Street and the north line of Lucas Avenue;

thence eastwardly along the north line of Lucas Avenue to the

southeast corner of City Block 121, said corner being the in-

tersection of the west line of Broadway and the north line

of Lucas Avenue; thence northwardly along the west line of

Broadway to the northeast corner of City Block 121, said cor-

ner bing the intersection of the west line of Broadway and the

south line of Delmar Boulevard; thence eastwardly along the

south line of Delmar Boulevard to the northwest corner of

City Block 6489, the said corner being the intersection of the

east line of Fourth Street and the south line of Delmar Boule-

vard; thence eastwardly along the south line of Delmar Boule-

vard and the eastern projection thereof to the center line of the

Mark Twain Expressway (Interstate Highway 70); thence south-

wardly along the center line of said expressway to the eastward

projection of the former center line of vacated Lucas Avenue,

—_— Sa

vacated by Ordinance 50609; thence westwardly along said

projection and said former center line of vacated Lucas Ave-

nue to the east line of Fourth Street; thence southwardly along

the east line of Fourth Street to its intersection with the east-

ern projection of the south line of St. Charles Street; thence

westwardly along this south line projection and the south line

of St. Charies Street to the southward projection of a line in

City Block 97, said line being 90 feet 2 inches, more or less,

west of and parallel to the west line of Fourth Street; thence

northwardly along this line through City Block 97 to the south

line of Washington Avenue; thence westwardly along the south

line of Washington Avenue to the northwest corner of City

Block 97, said corner being the intersection of the south line

of Washington Avenue and the east line of Broadway; thence

south along the east line of Broadway to the southwest corner

of City Block 98, said corner being the intersection of the east

line of Broadway and the north line of Locust Street; thence

eastwardly along the north line of Locust Street and its east-

ward projection to the east line of Fourth Street; thence south-

wardly along the east line of Fourth Street to the northwest

corner of City Block 86, said corner being the intersection of

the east line of Fourth Street and the south line of Pine Street;

thence westwardly along the south line of Pine Street to the

northwest corner of City Block 101, said corner being the in-

tersection of the south line of Pine Street and the east line of

Broadway; hence northwardly along the east line of Broadway

projected to the center line of Pine Street; thence westwardly

along the center line of Pine Street to the projected east line

of Sixth Street; thence northwardly along the projected east line

of Sixth Street and the east line of Sixth Street to the south-

west corner of City Block 117, said corner being the intersec-

tion of the east line of Sixth Street and the north line of Olive

Street; thence east 128 feet, more or less, to the former west

line of a 15 foot wide alley vacated by Ordinance 45553; thence

north 114 feet 3 inches, more or less, along the former west

alley line to an east-west line 114 feet 3 inches, more or less,

— A-51 —

north of and parallel to the north line of Olive Street; thence

west on this east-west line projected to the west line of Sixth

Street; thence southwardly on the west line of Sixth Street to

a property line in City Block 129, said property line being the

south line of property now or formerly belonging to Lauer-

Enloe Limited and is 54 feet 6 inches, more or less, north of

the intersection of the west line of Sixth Street and the north

line of Pine Street; thence westwardly along this said property

line and its westward projection to the west line of a north-

south alley in City Block 129; thence northwardly along the

west line of said alley to the south line of Olive Street; thence

westwardly along the south line of Olive Street to the north-

west corner of City Block 129, said corner being the intersec-

tion of the south line of Olive Street and the east line of Sev-

enth Street; thence southwardly along the east line of Seventh

Street to the north line of Seventh Street vacated by Ordinance

50495; thence westwardly 12 feet to the new east line of Sev-

enth Street established by Ordinance 50495; thence southwardly

along this said east line of 174.89 feet, more or less, to the

southwest corner of City Block 129, said corner being the in-

tersection of the east line of Seventh Street and the north line

of Pine Street established by Ordinance 50495; thence west-

wardly along the north line of Pine Street to the west line of

an 7 foot 6 inch wide alley in City Block 182; thence north-

wardly along the said west alley line and its northward projec-

tion to the south line of Olive Street; thence westwardly along

the south line of Olive Street to the northwest corner of City

Block 182; said corner being the intersection of the south line

of Olive Street and the east line of Eighth Street; thence south-

wardly along the east line of Eighth Street to the northwest

comer of City Block 183, said corner being the intersection

of the east line of Eighth Street and the south line of Pine

Street; thence eastwardly along the south line of Pine Street

and its eastward projection to the center line of Seventh Street;

thence southwardly along the center line of Seventh Street to

its intersection with the eastern projection of the north line of

— A-52 —

Chestnut Street; thence westwardly along the north line of

Chestnut Street to its intersection with the west line of a 20

foot wide alley in City Block 502, said alley intersection be-

ing 177 feet 7 inches, more or less, west of the intersection of

the west line of Eleventh Street and the north line of Chestnut

Street; thence northwardly along the said west alley line to its

intersection in parcel 14 with the north line of a 15 foot wide

alley; thence east along this north alley line to the east line of

parcel 14, said parcel line is also the west line of parcel 15;

thence northwardly along the parcel line to its intersection with

the south line of Pine Street; thence westwardly along the south

line of Pine Street to its intersection with the southern projec-

tion of the west line of a 20 foot wide alley in City Block 503;

thence northwardly along the said alley projectigét and the west

line of the 20 foot wide alley in City Block 503 to its inter-

section with the north line of a 20 foot wide east-west alley;

thence eastwardly along the north line of this east-west alley

97 feet 4 inches, more or less, to a property line, said property

line being the west line of property now or formerly belonging

to Eleven Twenty Olive Incorporated; thence northwardly 104

feet | inch, more or less, to the south line of Olive Street; thence

westwardly along the south line of Olive Street to the intersec-

tion of the southern projection of the former west line of a 20

foot wide alley in City Block 516 vacated by Ordinance 42075;

thence northwardly along this southern projection and former

west alley line in City Block 516 to the south line of a 15 foot

wide east-west alley; thence eastwardly along the said south

alley line 158.33 feet, more or less, to the southward projec-

tion of a property line, this line being the east line of prop-

erty now or formerly belonging to the FNR Centennial Corpo-

ration and the west line of property now or formerly belonging

to the Joseph P. Kelly Estate and Thomas F. Muldoon (Mer-

cantile Trust Company, Trustee); thence northwardly along

this southern property line projection and the property line to

the south line of Locust Street; thence westwardly along the

south line of Locust Street to the northwest corner of City

a

— A-53 —

Block 516, said corner being the intersection of the south line

of Locust Street and the east line of Twelfth Boulevard; thence

northwardly along the east line of Twelfth Boulevard to the

southwest corner of City Block 517; said corner being the in-

tersection of the east line of Twelfth Boulevard and the north

line of Washington Avenue; thence east *~1 feet 4 inches,

more or less, to a property line, said pre rty line being the

east line of property now or formerly belonging to the St. Louis

Union Trust Company and the west line of property now or

formerly belonging to the Kay Realty Company; thence north-

wardly along said property line to the south line of Lucas Ave-

nue; thence westwardly along the south line of Lucas Avenue

to the northwest corner of City Block 517, said corner being

the intersection of the south line of Lucas Avenue and the

east line of Twelfth Boulevard; thence northwardly along the

east line of Twelfth Boulevard to the northwest corner of City

Block 825, the point of beginning.

Parcel No. 2

Beginning at the southwest corner of City Block 206-N, said

corner being the intersection of the east line of Twefth Boule-

vard and the north line of Walnut Street; thence eastwardly on

the north line of Walnut Street to the center line of Eleventh

Street; thence southwardly along the center line of Eleventh

Street to the center line of Spruce Street; thence eastwardly

along the center line of Spruce Street to the northern projec-

tion at right angles of the west line of the Missouri State High-

way right-of-way in City Block 417 and the south line of

Spruce Street; thence south and southwest along the said pro-

jection and the irregular west line of the Missouri State High-

way right-of-way in City Block 417 to the former center line

of a 15 foot wide east-west alley vacated by Ordinance 16713,

this former center line also being a Missouri State Highway

right-of-way line; thence south on this former alley center line

to its intersection with the center line of the Daniel Boone

— ' o

Expressway, United States Rte. Forty; thence westwardly along

the said Expressway center line to its intersection with the

southern projection of the east line of Twelfth Street; thence

northwardly along the southern projection of the east line of

Twelfth Street and the east line of Twelfth Street to the west-

ward projection of the north line of Spruce Street; thence east-

wardly along the said projection of the north line of Spruce

Street to the southwest corner of City Block 436, said corner

being the intersection of the north line of Spruce Street and

the east line of Twelfth Boulevard; thence northwardly along

the east line of Twelfth Boulevard to the southwest corner of

City Block 206-N, the point of beginning.

Section Two. The redevelopment of such area, as provided

by Chapter 353, Revised Statutes of Missouri, 1959, and Chap-

ter 29 of the Revised Code of the City of St. Louis, Missouri,

is necessary and in the public interest under said Chapter 353,

as amended and under said Chapter 29 of the Revised Code

of the City of St. Louis, and is necessary in the interest of the

public health, safety, morals and general welfare of the people

of the City of St. Louis, and can be accomplished without the

expenditure of public funds.

Section Three. In any portion of the blighted area described

in Section One which has previously been declared blighted by

ordinance the initial period for filing development plans there-

for under the provisions of Section 29.070 (1) and any amend-

ments thereto of the Revised Code of the City of St. Louis

shall commence to run from the effective date of this ordinance.

Section Four. This ordinance being necessary for the imme-

diate preservation of public health, morals, safety and general

welfare shall be and is hereby declared to be an emergency

measure within the meaning of Article IV, Section 20, of the

Charter of the City of St. Louis, and as such shall take effect

immediately upon its approval by the Mayor.

Approved: June 20, 1971.

0 Ome e tee eee

— A-55 —

Ordinance 56476

(B.B. No. 391)

An Ordinance approving the Development plan submitted by

the Mercantile Center Redevelopment Corporation; granting a

Certificate of Convenience and Necessity to said corporation to

exercise the power of eminent domain within the area included

in such plan; authorizing the Mayor and Comptroller to enter

into a contract on behalf of the City of St. Louis with the Mer-

cantile Center Redevelopment Corporation; setting forth the

terms and conditions of said contract; incorporating by refer-

ence Chapter 353, R.S.Mo., 1969, as amended and Chapter 29

of the Revised Code of the City of St. Louis 1960; containing

a severability clause and containing an emergency clause.

WHEREAS, The Board of Alderme.. has by Ordinance Num-

ber 55952 approved June 29, 1971, found and designated a

certain area of the City of St. Louis to be a blighted area within

the meaning of and as defined in the Urban Redevelopment Cor-

poration Law, Section 353.020 of the Revised Statutes of Mis-

souri 1969, and

WHEREAS, the Mercantile Center Redevelopment Corpora-

tion did on October 19, 1972 duly submit a proposed plan of

redevelopment for a portion of said area to the City Plan Com-

misison, and a supplemental letter with attachments dated

February 9, 1973, which portion consists of City Blocks 118,

119, 126, 127, 164 and 180 and adjacent portions of St. Charles

Street to be vacated; and

WHEREAS, there have been no improvements in said portion

of said area since said designation to alter or change the blighted

character of said portion; and

WHEREAS, thereafter the City Plan Commission duly made

an independent study and investigation of said plan in the man-

—S

ner provided by Chapter 25, of the Revised Code of St. Louis,

1960, and thereafter on February 21, 1973, did unanimously

adopt a resolution approving the development plan of the Mer-

cantile Center Redevelopment Corporation, its successors and

assigns, subject to four conditions therein set out which resolution

was duly transmitted to the Mayor, and Board of Aldermen on

February 21, 1973; and

WHEREAS, the recommendation of the Mayor concerning

the redevelopment of said area recommending approval of the

Mercantile Center Redevelopment Corporation Plan was duly

transmitted to the Board of Aldermen and duly considered; and

WHEREAS, the application and development plan of the

Mercantile Center Redevelopment Corporation for said portion

of the blighted area was thereby found to be in full compliance

with Chapter 29 of the Revised Code of the City of St. Louis

of 1960 and all the procedures and requirements therein pro-

vided and approved; and

WHEREAS, it was determined that the development plan

of the Mercantile Center Redevelopment Corporation is in the

public interest and serves a public purpose;

Now, therefore, be it Ordained by the City of St. Louis, as

follows:

Section One. It is hereby determined, found and declared

that the development plan of the Mercantile Center Redevelop-

ment Corporation as submitted October 19, 1972 and supple-

mented on February 9, 1973 as aforesaid and recommended by

the City Plan Commission and as thereafter transmitted and

recommended by the Mayor to the Board of Aldermen is in the

public interest and as such is approved in accordance with the

terms of this Ordinance. The project area is identified and de-

scribed as follows:

Att Dt Ae me ee ——

anil ata sree bee

— A-57 —

City Blocks 118, 119, 126, 127, 164 and 180 together with

vacated St. Charles Street lying adjacent to and between City

Blocks 118 and 119, vacated St. Charles Street lying adjacent

to and between City Blocks 126 and 127 and vacated St. Charles

Street lying adjacent to and between City Blocks 164 and 180

but including no portion of Seventh Street ( feet wide) or

Sixth Street ( feet wide).

For purposes of any volume and open space calculations

made for the purpose of any requirement of the City under any

other Ordinance the total project area and all construction

therein shall be considered in relation to each other.

Section Two. It is determined that no relocation problem

exists in the area covered by the development plan because of

the very few dwelling accommodations in the development area

and because of the availability of similar accommodations in the

vicinity of the development area. Upon acquisition of property

containing occupied dwelling units, families will be allowed to

continue in residence until the property is required to be va-

cated for demolition. Direct assistance in locating suitable hous-

ing accommodations will be given by the developer, Mercantile

Center Redevelopment Corporation, to families forced to vacate.

No family will be evicted until suitable dwelling accommoda-

tions are located elsewhere and are offered to the family. The

Mercantile Center Redevelopment Corporation will cooperate

with City Departments, particularly the Department of Welfare,

in the relocation of displaced families.

Section Three. It is determined, found and declared that there

exists a necessity for the granting of the power of eminent domain

to the said Mercantile Center Redevelopment Corporation, that

the granting of such power of eminent domain to said Mer-

cantile Center Redevelopment Corporation is in the public

interest and serves the public purposes expressed in Chapter 29

of the Revised Code of the City of St. Louis of 1960, and that

— A-58 —

there is hereby granted to said Mercantile Center Redevelop-

ment Corporation a Certificate of Public Convenience and Neces-

sity authorizing and empowering the said Mercantile Center

Redevelopment Corporation to acquire by eminent domain or

otherwise all or any part of the real property located in the

blighted area for the purposes expressed in the Development

Plain. Said Mercantile Center Redevelopment Corporation shall

have the authority and powers of eminent domain as set forth in

Section 353.130 (3) Revised Statutes of Missouri, 1969. The

developer may at its election call upon the City as agent for

the developer to acquire all or part of the real property in-

cluded in said Development Plan on posting the deposit defined

in Section 29.200 of the Revised Code of the City of St. Louis,

1960.

Section Four. The Board of Aldermen has reviewed the pre-

vious designation of the area described in the Development Plan

as a blighted area, and the Board of Aldermen hereby finds that

said area (the project area) is a blighted area as defined by

Chapter 353 of the Revised Statutes of Missouri, 1969, as

amended and Chapter 29 of the Revised Code of the City of

St. Louis, 1960.

Section Five. The Mayor and the Comptroller of the City of

St. Louis shall be and are hereby authorized and directed to

enter into and perform in behalf of said City a contract by and

between said City and the developer, the Mercantile Center

Redevelopment Corporation, its successors and assigns. In the

event of any conflicts or differences between the provisions of

the Development Plan and the contract hereinafter recited the

contract shall govern and said development plan shall be deemed

to be amended accordingly.

Section Six. The said contract is hereby made a part of this

Ordinance and said contract shall be substantially in word and

figures as follows:

Pm

ne ae eee

— A-59 —

AGREEMENT

AN AGREEMENT entered into this ... . day of

1973, between the City of St. Louis, hereinafter referred to as

“City,” and Mercantile Center Redevelopment Corporation, its

successors and assigns, hereinafter referred to as “Developer”

for the execution of the Development Plan heretofore submitted

by the Developer approved and enacted by the Board of Alder-

men of the City of St. Louis by the ordinance of which this

Agreement is a part.

WHEREAS, the Board of Aldermen of the City of St. Louis

has enacted into law an ordinance, of which this Agreement is

a part, approving the Development Plan submitted by the De-

veloper, approved by the City Plan Commission declaring that

the clearance, redevelopment, replanning, rehabilitation and

reconstruction thereof are necessary for the public convenience

and necessity and that the approval of the Development plan,

and construction of the redevelopment project are necessary for

the preservation of the public peace, health, safety, morals and

welfare; and

WHEREAS, the aforesaid Ordinance requires the undertaking

and performance upon the part of the Developer and of the City

of various duties and steps; and

WHEREAS, said Ordinance directs the Mayor and the Comp-

troller of the City to enter into a contract with the Developer

providing for the execution of said Development Plan, and

WHEREAS, Mercantile Center Redevelopment Corporation

is a corporation formed under Chapter 353 of the Revised Stat-

utes of Missouri, 1969, and now in good standing in the State

of Missouri.

— A-60 —

NOW THEREFORE, the City and the Developer, its suc-

cessors and assigns for the consideration and mutual covenants

hereinafter contained and described under the conditions herein-

after set forth do hereby agree as follows:

1. The provisions of the Urban Redevelopment Corporations

Law of the State of Missouri, as amended, up to and including

the date of this contract, the provisions of Chapter 29 of the

Revised Code of the City of St. Louis of 1960 of which this

agreement is a part and the Development Plan, are hereby in-

corporated by reference and made in whole a part of this Agree-

ment. Wherever the term “Development Plan” is used in this

Agreement it shall refer to the Development Plan incorporated

by reference in this Ordinance together with amendments and

modifications if any thereto.

2. The Developer, its successors or assigns shall erect or cause

to be erected at its expense the following facilities:

(a) Four modern high rise office buildings containing a total

of approximately 3,285,000 square feet of floor space,

(b) A modern high rise hotel containing approximately 1,000

guest rooms and self contained parking spaces required by City

Ordinances to service same;

(c) A parking structure for approximately 200 cars.

The proposed redevelopment is to be constructed as follows in

six phases.

Phase I. Within the area comprised by City Blocks 164 and

180 and the vacated portion of St. Charles Street lying adjacent

to and between said City Blocks will be constructed a high rise

office building of approximately thirty-five (35) stories and con-

taining approximately 760,000 gross square feet of floor space

and a parking structure for approximiately 200 cars. Vacation

— A-61 —

and demolition of existing structures will commence promptly

after the execution of this agreement and construction will start

upon completion of demolition.

Phase II. Within the area comprised by City Block 119 and

part of City Block 118 and the vacated portion of St. Charles

Street lying adjacent to and between said city blocks will be

constructed a hotel of approximately twenty-five (25) stories with

approximately 800 guest rooms and self contained parking for

200 cars and containing approximately 1,000,000 square feet

of gross floor area. This phase will commence between one and

three years after the date of this contract.

Phase III. Within the area comprised by City Block 126 and

the vacated portion of St. Charles Street adjacent thereto will be

constructed a high rise office building of approximately twenty-

seven (27) stories with approximately 625,000 square feet of

gross floor area. This phase will commence between three and

five years after the date of this contract.

Phase IV. Within the area comprised by City Block 127 will

be constructed a high rise office building of approximately

twenty-four (24) stories with approximately 585,U00 square

feet of gross floor area. This phase will commence between four

and seven years after the date of this contract.

Phase V. Within the area comprised by City Block 127 will

be constructed a high rise office building of approximately fifty-

one (51) stories and approximately 1,315,000 square feet of

gross ffoor area. This phase will commence between six and ten

years after the date of this contract.

Phase VI. Within the area comprised by City Block 118 will

be constructed a free standing addition to the Phase II hotel

having approximately twenty-five (25) stories and containing

approximately 200 guest rooms and self contained parking for

— A-62 —

approximately 100 cars and containing approximately 150,000

square feet of gross floor area. This stage will commence ap-

proximately ten years after the date of this contract.

Additional retail structures containing approximately 14,000

additional gross floor area will be constructed in conjunction

with Phases III, IV and V. Enclosed pedestrian bridge over-

passes will be constructed in connection with Phases III and IV.

Prior to beginning construction of any structure, Developer

Shall submit to the City Plan Commission final design plans for

the approval of the City Plan Commission, which approval shall

not be unreasonably withheld. A written report respecting the

approval shall be given by the City Plan Commission to Devel-

oper within sixty days after the receipt of such plan. If no re-

port is made by the City Plan Commission within sixty days after

receipt of such plans the same shall be deemed to be approved

by the City Plan Commission.

3. Developer, its successors or assigns shall have the right

to alter, change or modify the plan to the extent of twenty-five

percent (25%) of the approximate gross floor area with corre-

sponding changes of proposed building heights and shali further

have the right to alter, change or modify the interior of the

aforesaid buildings, to alter, combine or otherwise modify office

or other units or divisions within the aforesaid buildings; and

shall also have the right to use the ground and terrace level

floors of said buildings to provide accessory uses as permitted by,

and in accordance with the provisions of the Zoning Ordinance

of the City of St. Louis to the extent deemed necessary or ad-

visable from time to time. Developer shall have the right prior

to completion of construction of any buildings, to set up model

offices, stores or exhibits, and to rend portions of said buildings

prior to completion when such portions are completed.

4. The proposed development shall be such that the Devel-

oper will demolish all the structures above grade on real property

—

acquired by the developer and will begin construction work on

the first building not later than six months after the entering into

this contract between the City and the Developer and the ac-

quisition of the project area shall be completed in time for De-

veloper to so commence construction. Construction work on

successive phases shall commence within the time limits stated

above and construction of each phase shall be substantially com-

pleted within a period of three years following commencement of

construction on that phase. Such periods shall be extended for

delays beyond Developer’s control and Developer is not to be

responsible for any delays caused by competent legal authority,

strikes, lock-outs, labor disputes, riots, fires, or other casualties,

tornadoes, cyclones, floods, acts of God, war invasion or acts

of a public enemy, accident, governmental restrictions or priori-

ties regarding acquisition or use of material or other inability

on the part of the Developer to obtain material or to perform not

growing out of its own fault, or for delays caused by the City,

State or Federal government. Provided, further, that upon the

application by the Developer to the Board of Estimate and Ap-

portionment, said Board may extend the foregoing time limit

or any phase or stage to time certain upon finding that:

(a) Developer has exercised all reasonable care to insure

completion of the phase in question.

(b) The delay in commencing construction or completion of

construction was not caused by an unreasonable act or failure

to act on the part of the Developer.

In the event of substantial non-compliance with the Develop-

ment Plan as approved herein, written notice of which noncom-

pliance is given to the Developer and not corrected within forty-

five (45) days after the time reasonably required to complete

such correction, unless the time for such correction is further

extended by the President of the Board of Public Service, or

upon failure of the Developer to commence construction or

complete the same within the scheduled time limits set out above

. a —

and upon a finding by the President of the Board of Public

Service that such failure is due to the fault of the Developer,

the President of the Board of Public Service may declare the

Developer in default. Following such declaration the Devel-

oper shall promptly suspend all work, and Developer’s rights to

continue operations under this contract shall be suspended.

Such declaration then shall promptly be reviewed by the Board

of Estimate and Apportionment which shall have thereafter the

power to cancel and void this contract or to remove such sus-

pension. Developer shall have the right to appeal such adverse

decision to the Courts.

5. Developer, its successors or assigns, shall maintain the

buildings in the development area in as good a state of repair

and attractiveness as possible.

6. Developer, its successors or assigns, shall have complete

and exclusive control over the construction of the project. De-

veloper, its successors or assigns, shall have the exclusive control

over the management of the project, the fixing of rentals and the

selection or rejection of tenants or occupants of the buildings

and property, but will at all times make all facilities in the proj-

ect avuilable to the general public without regard to race, re-

ligion, color, or national origin subject to the provisions of this

or other Ordinances existing at the time of this Agreement. The

Developer, on behalf of itself, its successors and assigns admit

the language, the intent and purpose regarding fair employment

practices contained in the provisions of Chapter 102 of the Re-

vised Code of the City of St. Louis, 1960, applying to the Devel-

opment Plan, agree to be bound hereby and agree to comply

with the terms and spirit of said Ordinance.

7. The Developer shall obtain all necessary permits as pre-

scribed by law and be subject to all lawful inspections and per-

form such other necessary acts as required by Chapter 29 of the

Revised Code of the City of St. Louis of 1960, or by the Ordi-

nance of which this contract is a part.

— i

8. The Developer shall in accordance with Section 29.260

of the Revised Code of the City of St. Louis cooperate with and

permit access to the agents and representatives of the President

of the Board of Public Service or other officials of the City of

St. Louis which by law have jurisdiction over construction of

public facilities and shall be furnished copies of all written re-

ports made by such representatives or agents.

9. The City agrees to cooperate with Developer and with due

diligence to join with the Developer in procuring all changes,

improvements and additions in municipal services consistent

with the Development Plan in the area deemed necessary by the

City and the Developer, including but not limited to the fol-

lowing:

(a) Vacation of all the public alleys in the project area.

(b) Vacation of portions of St. Charles Street as stated above.

(c) To take all other necessary and proper steps to insure that

adequate municipal services consistent with the development

of the area will be rendered to the area.

10. Upon compliance with the terms and conditions of Sec-

tion 29.310 and Section 29.320 of the Revised Code of the City

of St. Louis of 1960:

(a) Real property within the project area as hereinabove set

forth in this Ordinance and acquired by the Developer shall not

be subject to assessment or payment of general ad valorem

property taxes imposed by the City or State or any political sub-

division thereof for a period of ten (10) years after the date upon

which Developer becomes the owner of the real property by

grant, lease, purchase, condemnation or otherwise except to such

extent and in such amount as may be imposed upon such real

property during such period measured solely by the amount of

the assessed valuation of the land exclusive of improvements, as

was determined by the Assessor of the City of St. Louis for taxes

— A-66 —

due and payable thereon during the calendar year preceding the

calendar year in which the corporation acquired such real prop-

erty; and the amounts of such tax assessments shall not be in-

creased during said ten (10) year period so long as the real prop-

erty is owned by the Developer, its successors or assigns and is

used in accordance with the Development Plan and this Agree-

ment.

(b) In the event that any such real property was tax exempt

immediately prior to its acquisition by the Developer, its suc-

cessors and assigns, the Assessor of the City of St. Louis shall

upon acquisition by the Developer promptly assess such land,

exclusive of improvements, at such valuation as shall conform to

but not exceed the assessed valuation made during the preceding

calendar year of other land, exclusive of improvements, adjacent

thereto or in the same general vicinity. The amount of such as-

sessed valuation so fixed by the City Assessor shall not be in-

creased by the City Assessor during the ten (10) year period

next following the date upon which the Developer acquired such

property so long as such real property is owned by the Developer

its successors or assigns and is used in accordance with the De-

velopment Plan and this Agreement.

(c) For the next ensuing period of fifteen (15) years, ad

valorem taxes upon such real property shall be measured by the

assessed valuation thereof as determined by the City Assessor

upon the basis of not to exceed fifty per cent (50%) of the true

value of such real property including any improvement thereon

(i.e. fifty per cent (50%) of the assessed valuation of like prop-

erty of equal value), nor shall such valuation be increased over

fifty per cent (50%) of the true value of such real property from

year to year during said period of fifteen (15) years so long as

said property is owned by the Developer, its successors or assigns

and is used in accordance with the Development Plan.

(d) In the event of the sale or other disposition of any real

property of the Developer, its successors or assigns, by reason

— A-67 —

of the foreclosure of any mortgage or other lien through insolv-

ency or bankruptcy proceedings, or by order of any Court of

competent jurisdiction, or by voluntary transfer or conveyance,

the partial tax relief provided for in subsections (a), (b) and (c)

of this paragraph shall inure to the benefit of any purchaser

or purchasers of such real property so long as such purchaser or

purchasers shall continue to use, operate and maintain such real

property in accordance with the provisions of the Development

Plan.

11. Notwithstanding the tax abatement provisions of 353.110

Revised Statutes of Missouri, 1969, as hereinabove provided, the

Developer agrees that with respect to property within the project

area defined herein owned by Developer or its successors or as-

signs, and taxed pursuant hereto and Section 353.110 Revised

Statutes of Missouri, 1969, it and its successors or assigns will

pay to the City with respect to each such property in addition

to the ad valorem taxes computed hereunder, an amount an-

nually equal to the amount by which the actual tax on such

property computed pursuant hereto is less than the tax which

would have resulted in such taxable year against such property

had the assessed value of such property (land and improvements)

remained the same as the assessed valuation of such property

(land and improvements) at January 1 of the calendar year in

which the Ordinance of which this contract is a part becomes

law.

The City agrees that with respect to such payments made pur-

suant to this paragraph, that it will distribute such payments in

the same manner as it distributes ad valorem property taxes col-

lected on property (land and improvements) to the State, the City

and other political subdivisions entitled thereto at the time of

distribution.

12. (a) The net earnings of the Developer during the period in

which tax relief is enjoyed under paragraph 10 shall be limited

— A-68 —

to an amount not to exceed eight per cent (8%) per annum of the

cost to the corporation of the project, including the cost of the

land or the balances of such cost as reduced by amortization pay-

ments; provided, that the net earnings derived from the project

shall in no event exceed a sum equal to eight per cent (8%)

per annum upon the entire cost thereof. Such net earnings shall

be computed after deducting trom gross earnings the following:

(1) All costs and expenses of maintenance and operation.

(2) Amounts paid for taxes, assessments, insurance premiums

and other similar charges.

(3) An annual amount sufficient to amortize the cost of the

entire project at the end of the period, which shall not be more

than sixty (60) years from date of completion of the project.

‘b) Surplus earnings of the Developer in excess of those pro-

vided for in subparagraph (a) of this paragraph 12 may be used

or held for any one or all of the following purposes:

(1) As a reserve for maintenance of such rate of return in

the future and may be held by the corporation to offset any

deficiency in such rate of return which may have occurred in

prior years.

(2) To accelerate the amortization payments.

(3) For the enlargement of the project.

(4) For the reduction in rentals.

At the termination of the tax relief provided in paragraph

10, the Developer shall make a strict accounting of surplus

earnings in excess of those permitted hereby and shall turn over

to the City any excess of such surplus earnings not previously

used for one or more of the purposes set forth in subparagraph

(b), (1), (2), (3) and (4) of this paragraph !2.

13. The Developer shall establish and maintain depreciation,

obsolescence and other reserves, also surplus and other accounts,

— A-69 —

including a reserve for the payment of taxes according to recog-

nized standard accounting practices.

14. “Cost” as used herein shall include among other ex-

penses the cost of land improvements, interest during construc-

tion, the estimated or actual expense of demolition of existing

structures, the estimated or actual expense of utilities, landscap-

ing, the actual expense of construction equipment and furnish-

ing of buildings and improvements, including architectural, en-

gineering and builder’s fees, reasonable management and oper-

ational expenses until the project is ready for its proposed use,

as provided for in the approved Development Plan, together

with such additional expenses incurred as a result of additions

to or changes in the Development Plan where such additions

or changes are approved by ordinance.

15. The terms, conditions and provisions of this contract

and of the Development Plan can be neither substantially modi-

fied nor limited except by mutual agreement between the City

and the Developer, its successors and assigns; provided, how-

ever, that this contract shall not be construed as an enlargement

of the authority conferred upon the City by Chapter 353 and

other Revised Statutes of Missouri of 1969.

16. Liquidated damages in the amount of five hundred dol-

lars ($500.00) for each month of delay may be assessed in

favor of the City upon the failure of the Developer to com-

plete the development project within the time agreed by this

contract, except as said time may be extended by the Board of

Estimate and Apportionment for good cause. Periods of less

than a month shall be assessed upon a proportionate basis as

the number of days delay relates to the total number of days

in that month. Liquidated damages shall not exceed the rea-

sonable value of any damages suffered by the City and shall

be reviewable in the event of dispute between the City and the

Developer by appeal to the Courts.

— A-70 —

17. Performance or contractors bonds for each the demoli-

tion and construction involved in each phase in favor of the

City shall be filed by the Developer, its successor or assign

with the comptroller at the time demolition and/or construction

or each phase commences and in no event shall said bond be

filed later than the time that the contractor is required to com-

mence construction of a phase as set forth in paragraph 4 of

this contract. The amount of each bond shall be determined

by the Board of Estimate and Apportionment when an accurate

estimate of the cost as defined in Chapter 29, the Revised Code

of the City of St. Louis of 1960 is ascertained through engineer-

ing studies and shall be in an amount equal to 10 per cent

(10% ) of such cost. Developer, its successors or assigns, may

request in writing, the President of the Board of Public Service

to issue a certificate of completion of any phase of any part

thereof upon which a bond has been issued and upon sub-

stantial completion of the phase in accordance with the ap-

proved development plan, then the President shall issue such

certificate and shall promptly notify the Comptroller of same

and the Comptroller shall then forthwith discharge the surety

on the performance bond. However, in the event the President

of the Board of Public Service determines that the project has

not been completed in accordance with the approved develop-

ment plan, then the President forthwith shall transmit notice

by registered mail, return receipt requested, to the Developer,

stating in writing the reasons for the finding that there has

not been substantial compliance. Failure to so notify the De-

veloper within thirty (30) days after receipt of the said written

request shall be deemed a certification of completion and upon

presentation of proof of said written request to the Comptroller,

the Comptroller shall forthwith discharge the surety on the per-

formance bond.

18. The use of the project area shall be limited to the use

described in the Development Plan, as modified for a period of

ital aL

— A-71 —

not less than twenty-five (25) years from the effective date of

land acquisition.

19. This contract shall remain in full force and effect so long

as Developer, its successors or assigns, shall enjoy tax relief

under Chapter 29 of the Revised Code of the City of St.

Louis of 1960, and at the termination of such relief this con-

tract shall terminate and become null and void, provided that

the project as herein described has been completed and so cer-

tified by the President of the Board of Public Service.

20. The rights and privileges given to the Developer, its suc-

cessors or assigns by this contract and the duties imposed on

the Developer by this shall apply only to the development proj-

ect herein described.

21. In the event that the Developer, its successors or assigns

shall be prohibited from performing the covenants and agree-

ments herein contained, or contained in the Development

This text is long and has been trimmed here. Open the source document for the complete record.