New OPO Lawsuit says MDFB ineligible to receive and transfer state historic tax credits

Additional defendants include:
St. Louis US Custom House and
Old Post Office Building Associates, LP
The DESCO Group
DFC Group
Missouri Development Finance Board

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In the Circuit Court of Cole County
State of Missouri
Marti Frumhoff, )

Plaintiff, )
Case No.
v.

Missouri Department of Natural Resources )
and Missouri Department of Economic
Development )
)
Defendants. )

Petition for Declaratory Judgment

Comes Now Plaintiff Marti Frumhoff (hereinafter Frumhoff), by and through counsel, and for her Petition for Declaratory Judgment against Defendants Missouri Department of Natural Resources and Missouri Department of Economic Development (hereinafter "DED" and "DNR"), states as follows: 1. Frumhoff is, and at all times relevant herein was, a resident of the State of Missouri and St. Louis City County. Frumhoff is a taxpayer of the State of Missouri.
2. Defendants DED and DNR, at all times relevant herein, were duly organized and existing under the laws of the State of Missouri, with its offices in Jefferson City, Missouri within Cole County.
3. The Missouri Development Finance Board ("MDFB") is a governmental, non-profit entity created as a corporate body and politic by the State of Missouri.
4. The Project at issue here involves the proposed renovation of the St. Louis Custom House and Post Office (the "Old Post Office"). The Project involves the United States General Services Administration ("GSA") transferring title to the Old Post Office to the MDFB. The Land Clearance for Redevelopment Authority of the City of St. Louis ("LCRA") sold the Century Building, located across the street to the west of the Old Post Office, to the MDFB. The plan calls for the MDFB to own and develop, with NSG Developers LLC, the proposed Ninth Street Garage on the site of the Century Building once it is demolished. The MDFB will own but lease back to the St. Louis' U.S. Custom House and Old Post Office Building Associates, L.P. the Old Post Office in a 99 year long-term master lease.
5. The MDFB will take title of the Old Post Office on or about September 21, 2004.
6. The MDFB will lease the Old Post Office to a Developer for 99 years. The Developer is a partnership formed by the principals of The DESCO Group Inc. and DFC Group Inc., Mark J. Schnuck and Steven J. Stogel, through the legal entities of the NSG Developers LLC, Orion 2002, LLC, the Old Post Office Developers, LLC, and the St. Louis' U.S. Custom House and Old Post Office Building Associates, L.P. (hereinafter referred to as "Developer").
7. The funding of the proposed Old Post Office renovation comes from several sources, one of which is the Missouri state historic tax credit. (See § 253.545 to § 253.559, RSMo.).
8. The Missouri state historic tax credit enabling statute requires the state historic preservation officer of the DNR to determine, among other things, whether the rehabilitation meets the standards of the Secretary of the United States Department of the Interior. The issuing of certificates of eligible credits to taxpayers shall be performed by the DED. (§ 253.559, RSMo.).
9. A real and subsisting controversy exists between the parties hereto concerning whether the issuance of Missouri state historic tax credits to the Project is lawful.
10. Plaintiff has no adequate alternative remedy.
Count One
11. Plaintiff incorporates by reference Paragraph Nos. 1 through 10.
12. The Developer will seek a certificate of eligibility from the state historic preservation officer of Defendant DNR and a certificate of eligibility from Defendant DED when the renovation of the Old Post Office is complete.
13. Pursuant to the Secretary's standards that the state historic preservation officer of Defendant DNR must use to determine eligibility, demolition of a building as a part of a rehabilitation project involving multiple buildings is grounds for denial of a certificate of rehabilitation. (See § 253.559, RSMo.; 36 C.F.R. 67.6(b)(5)).
14. The Developer here plans to demolish the Century Building as a part of the rehabilitation project.
15. The GSA has acknowledged that demolition of the Century Building is an adverse effect of the proposed project as defined under the National Historic Preservation Act ("NHPA"). The Century Building is a certified historic structure under the NHPA. The Century Building is listed on the National Register of Historic Places. In addition, the Century Building is not functionally related historically to serve an overall purpose of the Old Post Office.
16. The Developers' demolition of the Century Building would render the rehabilitation project ineligible for Missouri state historic tax credits. (See § 253.559, RSMo.; § 36 C.F.R. 67.6).
WHEREFORE, Plaintiff requests that this Court enter an Order against the Defendants and declare that Defendants DNR and DED shall not issue a certificate of eligible credits to any taxpayers associated with the Old Post Office project because the demolition of the Century Building as a part of the rehabilitation project is a basis for denial of certification pursuant to 36 C.F.R. 67.6 that is warranted under the circumstances.Count II
17. Plaintiff incorporates by reference Paragraph Nos. 1 through 10.
18. Under Missouri state law, non-profit and governmental entities are ineligible for the Missouri historic tax credit. (See §253.557 RSMo.).
19. The MDFB is a non-profit, governmental agency created by the legislature of the State of Missouri to facilitate economic development projects that does not pay state income tax on property that it owns.
20. The MDFB will take title to the Old Post Office during the week of September 20, 2004.
21. The Developers will receive from the MDFB a 99-year lease on the Old Post Office for development pursuant to the terms of the rehabilitation project outlined above.
22. As a part of the rehabilitation project, the Developer plans to seek at least Five Million Dollars in Missouri historic tax credits.
23. As a non-profit, governmental entity, the MDFB is not an eligible taxpayer under the Missouri historic tax credit program. Since the MDFB is not an eligible taxpayer under the program, it has no rights to Missouri historic tax credits that could be transferred to the Developer.
WHEREFORE, Plaintiff requests that this Court enter an Order against the Defendants and declare that Defendants' DNR and DED may not issue a certificate of eligible credits to the MDFB or any other taxpayer pursuant to the Old Post Office rehabilitation project because the MDFB, as the owner of the Old Post Office and the Century Building, is an ineligible taxpayer under §253.557, RSMo. that does not have the right to receive Missouri historic tax credits that could be transferred to or applied for by any taxpayer.
Respectfully submitted,

Chackes, Carlson & Spritzer, LLP
By:
Matthew J. Ghio #44799
8390 Delmar Blvd., Suite 218
St. Louis, Missouri 63124
Phone: 314-872-8420
Fax: 314-872-7017 Attorney for Plaintiff