Kansas City’s ambitious streetcar plans hit a potential speed bump Thursday with the filing of a lawsuit by two downtown property owners.
The lawsuit, filed in Jackson County Circuit Court, seeks to halt the collection of new downtown sales and property taxes, which are a key source of the $100 million streetcar project’s funding.
It alleges the streetcar election approving the new taxes improperly deprived downtown property owners of a vote and says the 1 percent streetcar sales tax is improperly “stacked” on top of another 1 percent Power & Light District transportation sales tax.
“This is taxation without representation at its worst because the vast majority of people and businesses who have to cough up these additional sales taxes and property assessments were denied the right to vote on them, which is unfair, and we believe, unconstitutional,” attorney Mark Bredemeier said in a news release.
The plaintiffs are River Market business owner Sue Burke, who has been an outspoken opponent of the streetcar tax, and Crossroads artist Jeffrey “Stretch” Rumaner.
It was not immediately clear whether the filing would slow down the streetcar project, which is intended to run between the River Market and Union Station. City officials have been pushing to start construction this summer and get the trains running by summer 2015. A bond sale was anticipated this spring, to be paid back in part with pledged revenues from those sales and property taxes.
Doug Stone, an attorney who guided the city through the election process, declined comment Thursday.
Mayor Sly James and City Attorney Bill Geary said they had not yet read the lawsuit. They would not speculate on whether the lawsuit would delay any bond sale for the project.
David Johnson, who lives downtown and has been a vocal streetcar advocate, said Thursday he could not comment on the merits of the lawsuit. But he lamented the filing.
“I’m very disappointed in some downtown stakeholders,” Johnson said. He also noted that the city previously had obtained a Jackson County judge’s ruling stating that its approach to the streetcar elections was legal.
“We already had our day in court,” Johnson said.
In a hearing last April, Jackson County Circuit Judge Charles Atwell took testimony on the proposed special streetcar taxing district. Atwell ruled that the planned district was legal under Missouri law and said it was not a violation of the Missouri Constitution to have a vote that did not extend to nonresident property owners.
Atwell’s ruling set the stage for two elections last year, in which residents living downtown — but not many of the major property owners — affirmed creation of the streetcar district and the new sales and property taxes within that district. The sales tax is set to take effect in April and the property taxes begin to come due at the end of this year.
But the lawsuit continues to challenge the streetcar election’s legality under the Missouri Constitution and asks the court to prohibit the downtown transportation development district from collecting those taxes.
“There is no rational justification for allowing natural persons to vote in the election — many of whom, upon information and belief, do not own property in the streetcar district — while prohibiting the owners of the property burdened with the special assessments from voting in the election,” the lawsuit said.
The lawsuit also argued that a transportation development district was established in December 2006 to encompass the downtown Power & Light entertainment district, which imposes a 1 percent sales tax, and that this new streetcar district improperly stacks another 1-cent tax on the Power & Light District, exceeding the statutory taxing limit.