KC Council panel rejects challenge to downtown convention hotel

A Kansas City Council committee agreed Monday with City Attorney Bill Geary that a petition initiative challenging the convention hotel project is legally flawed and should not go on an election ballot.

The Legal Review Committee’s decision came as Mike Burke, an attorney representing the hotel developer, acknowledged that the petition initiative already has delayed the deal, which supporters had hoped could close late this year or early next year.

“We can’t proceed with financing,” Burke said, until the City Council decides how to respond to petitions with more than 1,700 signatures seeking a public vote on the proposed 800-room Hyatt Hotel, which a previous City Council authorized to be built at 16th Street and Baltimore Avenue.

By a 4-0 vote, the Legal Review Committee recommended not to adopt the petitions for an election. The full council is expected to consider the issue Nov. 12.

The petitions require voter authorization before the city can enter any agreement to develop, finance, construct or operate any downtown convention center headquarters hotel.

Burke told the committee that hotel investors agree with Geary’s analysis that the petition initiative has serious legal flaws, is unconstitutional and should not be on an election ballot. He said that during nearly three years of putting the deal together, construction costs have already gone up and further delays pose even more risk to the project.

“We’re ready to move ahead,” Burke said. He urged the committee to send the matter to the full council for a decision this week.

But Mayor Sly James, a big proponent of the hotel deal, said it should be put off at least until Nov. 12, so the new council that took office Aug. 1 can be fully briefed on the legal issues surrounding the grass-roots petitions.

Geary repeated his earlier concerns that requiring the public to vote now on the hotel would put the city in breach of development contracts and commitments that the previous City Council already authorized.

“It wants to undo things that have been done,” Geary said.

But more importantly, Geary said, the petitions would require an election for any hotel near the convention center that uses any form of tax-increment financing. He explained that the TIF statute does not limit who can get those types of tax incentives. The council gets its TIF powers from the state, and the voters can’t restrict that council power. He cited a Missouri Court of Appeals ruling out of St. Louis in June that made that clear.

State law allows what the initiative petition attempts to prohibit, Geary said, so it is unconstitutional on its face and should not go on the ballot.

Dan Coffey, a spokesman for the petitioners, was at Monday’s meeting and said his group, Citizens for Responsible Government, and its attorney disagree with the city’s reasoning.

This story was originally published October 26, 2015 at 4:32 PM with the headline "KC Council panel rejects challenge to downtown convention hotel."