City of St. Louis Files Lawsuit to Challenge April 4, 2017 Election Result on Proposition NS

The City of St. Louis has filed a lawsuit to establish that Proposition NS, which would raise up to $40 million for the City to stabilize buildings owned by the Land Reutilization Authority (LRA), was passed by voters on April 4, 2017.

At issue is whether the ballot measure is governed by the City's Charter, which requires two-thirds (66.67 percent) voter approval before the City can issue bonds, or the Missouri Constitution, which mandates four-sevenths (57.14 percent) voter approval.

The measure garnered 58.57 percent of the April 4 vote. It is the City's position that the measure passed under state law.

The lawsuit, filed in the 22nd Judicial Circuit Court, asks the court to order the Board of Election Commissioners to certify that the April 4 ballot issue passed.

If the Court sides with the City and elected officials pass an ordinance approving the issuance of bonds, the money raised would provide funding to secure and stabilize City-owned residential properties.

Proposition NS specifically targets vacant residential buildings that can be rehabbed.

Mayor Lyda Krewson said the idea behind the proposition is to stabilize the properties; sell them to private parties for rehabilitation; and get them back on the City's tax rolls. 

"LRA owns 3,400 vacant buildings. Funds from Proposition NS will be used to stabilize and secure the residential buildings that are able to be rehabbed," Krewson said. "Repairing or replacing the roof, tuckpointing and boarding up buildings are important to keeping them water-tight, and encourage development so they can be lived in once again."

Rehabilitating vacant residential buildings will help reduce crime, widen the City's tax base, and draw more residents into the City, Krewson added.

Prop NS will allow the City to issue $6 million in bonds per year for 7 years, not to exceed $40 million. The bonds would be paid back by property taxes. For a $150,000 house, the property tax would increase $3 the first year, to a total of $22 per year at the end of 7 years. The tax increase would be eliminated after the bonds are paid off.

The money from the bonds would go to the St. Louis Development Corporation, the City's development arm, which must draft rules for the use of the proceeds.

Among the rules required by the ordinance is that the money can only be spent on vacant residential buildings that can be rehabilitated, and the work is limited to tuck-pointing, repairing or replacing a roof, and completing board-up of the house to keep it watertight and secure.

The money cannot be used for HVAC, electrical systems, or other upgrades, which would be the responsibility of the home purchaser.

The buildings would be auctioned and can only be sold individually. Buildings with more than six residential units are ineligible.

Related 

April 4, 2017 General Municipal Election