Columbia developer will appeal judge's dismissal of suit against city

Process could take a year
BY MIKE FITZGERALD
News-Democrat  

A lawyer for the developer behind the $200 million Columbia Crossing retail project said his client will appeal a federal judge's dismissal of a lawsuit against the city of Columbia.
 
"That process will take a while, maybe up to a year," said Gerard Carmody, the attorney for G.J. Grewe, the developer. "And then we'll see what the 7th Circuit Court of Appeals (in Chicago) does with it."
 
U.S. District Judge J. Phil Gilbert on Thursday threw out Grewe's lawsuit on the grounds the city lacked the authority to make a pact with Grewe to develop the project.
 
In its lawsuit, which the developer filed in September in U.S. District Court in East St. Louis, Grewe alleged the city failed to live up to a 2004 development contract. The firm had sought more than $2.5 million in lost fees and expenses from the city.
 
Jay Unnerstall, a Ward 2 Columbia alderman who had opposed taxpayer subsidies for the project, applauded the judge's decision.
 
"This is just a big victory for the citizens of Columbia," Unnerstall said, "because now we no longer had this noose around our neck that Grewe held around our city."
 
If the project had been allowed to proceed, "We were basically making our small town quality of life extinct," he said. "And to make things worse, we weren't going to be benefiting from the tax revenues that would be generated by the development because we were going to be rebating so many taxes."
 
Carmody, the attorney for Grewe, raised questions about Columbia's credibility as a partner with future developers.
 
After all, the council with a different set of members had courted Grewe, annexed the land the developer had intended to build on and had taken other steps meant to launch the project, Carmody said.
 
"You don't do all those things and commit and say, 'Go spend all this money,'" Carmody said. "And then after you go do all that stuff, say, 'Just kidding.'"
 
Columbia originally had sought out Grewe in 2004 as a way to boost its sales tax revenue, which has been dropping steadily in recent years because of the loss of a local Ford car dealership.
 
Defending against Grewe's lawsuit has already led city leaders to reach deep into public coffers. The city racked up $200,000 in legal fees on the Grewe case alone last year, and it is on track to spend another $350,000 on the case for the 2008-09 fiscal year.
 
The lawsuit's soaring expenses had even led City Administrator Anthony Traxler earlier this month to consider whether the council should impose a "tort tax" on property owners for fees connected to the lawsuit.
 
But Unnerstall, said he doubted the tort tax idea was destined to go anywhere.
 
"I don't know any council member who was really ever in favor of that," he said. "I really don't think it was ever a viable option."
 
Contact reporter Mike Fitzgerald at mfitzgerald@bnd.com or 239-2533.