Bazell v. City of Cincinnati

• Decision Date: 24 January 1968
• Docket Number: Nos. 41118,41386,s. 41118
• Citation: 233 N.E.2d 864,13 Ohio St.2d 63
• Parties: , 42 O.O.2d 137 BAZELL, Appellant, v. CITY OF CINCINNATI et al., Appellees. HAMILTON COUNTY, Ohio, Appellee, v. CLOUD, Auditor of State et al., Kelley et al., Appellants.
• Court: Ohio Supreme Court

Page 63

13 Ohio St.2d 63

233 N.E.2d 864, 42 O.O.2d 137

BAZELL, Appellant, v. CITY OF CINCINNATI et al., Appellees.

HAMILTON COUNTY, Ohio, Appellee, v. CLOUD, Auditor of State et al., Kelley et al., Appellants.

Nos. 41118, 41386.

Supreme Court of Ohio.

Jan. 24, 1968.

Rehearing Denied Feb. 14, 1968.

Syllabus by the Court

1. By reason of Sections 3 and 7 of Article XVIII of the Ohio Constitution, a charter city has all powers of local self-government except to the extent that those powers are taken from it or limited by other provisions of the Constitution or by statutory limitations on the powers of the municipality which the Constitution has authorized the General Assembly to impose.

2. The determination of what constitutes a public manicipal purpose is primarily a function of the legislative body of the municipality, subject to review by the courts, and such determination by the legislative body will not be overruled by the courts except in instances were that determination is manifestly arbitrary or unreasonable. (Paragraph two of the syllabus of State, ex rel. Gordon, v. Rhodes, 156 Ohio St. 81, 100 N.E.2d 225, approved and followed.)

3. A charter municipality may construct a stadium that is designed to accommodate large crowds at athletic and other exhibitions and may rent that stadium to private persons who will privide such exhibitions, and such municipality nay do so even though such private persons will derive profits from providing those exhibitions; and, in connection with the construction and operation of such a stadium, such municipality may acquire land and devote it to automobile parking and derive a profit from doing so; and, as an incident to the construction and operation of such stadium, such municipality may construct and maintain a scoreboard and derive revenue from the sale of advertising space thereon.

4. Although Section 6 of Article VIII of the Constitution of Ohio forbids the lending of a city's credit to or in aid of a private business enterprise, it does not prohibit such lending by a city to a public organization such as a county.

5. Where a notice of appeal from a judgment of the Court of Appeals is duly filed in the Court of Appeals but no copy of such notice is filed in the Supreme Court within 20 days after such filing in the Court of Appeals as required by Section 1(A), Rule I, of the Supreme Court, such appeal will be dismissed pursuant to Section 1 of Rule II.

Case No. 41118, which will hereinafter be referred to as the 'injunction' case, was instituted in the Common Pleas Court of Hamilton County on August 3, 1966, by the plaintiff as a citizen and a taxpayer of the city of Cincinnati on behalf of himself, on behalf of the city, and on behalf of all other taxpayers of the city to enjoin the city from expending any further funds on a proposed stadium for the city.

In February 1967, the Common Pleas Court rendered judgment for defendants.

That judgment was affirmed by the Court of Appeals.

The cause is now before this court on an appeal from the judgment of the Court of Appeals, both as an appeal involving a constitutional question and pursuant to allowance of a motion to certify the record.

Case No. 41386, which will hereinafter be referred to as the 'bond validation' case, was instituted on May 18, 1967, in the Common Pleas Court of Hamilton County by that county pursuant to Sections 133.71 to 133.80, Revised Code, for the purpose of adjudicating the authority of Hamilton County to issue $42,250,000, principal amount of revenue bonds of that county, and the validity and legality of the proceedings taken and proposed to be taken in connection therewith. The petition in that case discloses the following:

Hamilton County and Cincinnati entered into a so-called co-operative agreement on May 12, 1967, pursuant to Section 153.61, Revised Code, for the joint construction of a public stadium with related parking facilities on a site now owned by Cincinnati as a part of the central river-front urban renewal project of that city. Under this agreement, the county is to issue the foregoing revenue bonds, which are to become due serially between 1970 and 2007; the city is to convey the site for the stadium to the county for $3,245,996 of the bond proceeds; the county is to pay the balance of those proceeds, after deducting debt charges for 33 months and costs of issuance of the bonds, to the city for use by the city in construction of the stadium; and the county is to lease the stadium and related facilities to the city for 40 years. Under this lease, the city is to pay annually to the county rent, rent being defined therein to mean 'a sum of money equal to the difference between the amount' available in the 'debt service fund' for the bonds at the end of each year 'and the amount required for debt service on said bonds' during the succeeding 12 months.

The proposed county revenue bonds state on their face that they do 'not constitute a general obligation of' the county, that 'the general credit and taxing power of said county are not pledged to the payment' of any part of the principal or interest thereof and that they are payable 'solely from and secured by a pledge * * * of the revenues derived by the county from the operation of said stadium with related parking facilities, specifically the rental revenue under a certain lease from said county to the city * * * pursuant to said co-operative agreement.'

Certain defendants filed answers questioning the authority of the county to issue the bonds and the validity and legality of the proceedings relating thereto.

The Common Pleas Court rendered a judgment determining that Hamilton County had authority to issue the proposed revenue bonds and that the proceedings taken and proposed to be taken in connection therewith are valid and legal.

That judgment was affirmed by the Court of Appeals on November 22, 1967.

A notice of appeal from that judgment was filed in the Court of Appeals by the defendants Bazell and Kelley and a copy thereof was duly filed in this court on December 4, 1967.

Kelley & Grossheim and E. Ronald Grossheim, Cincinnati, for appellant Bazell.

William A. McClain, City Solicitor, Isabel Guy, William H. Brewe, Peck, Shaffer & Williams and Judson J. Allgood, Cincinnati, for appellees City of Cincinnati and others.

Peck, Shaffer & Williams, Judson J. Allgood, Andrew J. Conroy and Frederick O. Kiel, Cincinnati, for appellee Hamilton County.

Graham P. Hunt, Jr., and Robert H. Fosdick, in pro per.

Kelley & Grossheim, Cincinnati, for appellants Cloud and Kelley and others.

TAFT, Chief Justice.

In each case, the record disclosed that the proposed stadium is designed to accommodate large crowds (approximately 50,000) at athletic and other exhibitions, including major league baseball and major league football games.

In the injunction case, it is contended that the city may not erect and maintain the stadium with public funds because the stadium is 'designed to peculiarly benefit a few individuals rather than the public in general.'

In support of that contention, the plaintiff states that those who will use the stadium are to pay less for that use than will be required to erect and maintain it, and that as a result a substantial anticipated loss to the city will have to be absorbed by its taxpayers.

There is in the record a report of certain experts as to estimated annual net revenues of about $1,300,000 available for fixed charges on the county's revenue bonds. In arguing that there will be an annual deficit of $700,000 in the amount available for debt charges on the bonds, plaintiff has apparently used a figure of $2,000,000 as representing the amount of those charges. That figure appears to be reasonable. However, there is in the record the proposal to lease the stadium, made by the owners of the major league baseball team known as the Cincinnati Reds. A consideration of this lease with the foregoing report indicates that there may be, if the estimates as to attendance and parking and advertising revenues of the report are correct and no unforeseen complications arise, substantially more net revenue than the amount which the foregoing report had estimated would be received from the major league baseball use of the stadium.

Unfortunately, the evidence, as to anticipated revenues and the requirements for debt service, especially in the absence of any analysis thereof in the brief of either party, is very sparse and quite vague. Thus, we cannot determine from the record whether the proposed stadium operations will or will not provide the city with enough money for payments on its proposed lease from the county. Since the burden of proof was on plaintiff on this issue, we must conclude that the record does not reasonably support a finding that a substantial amount of the rental on the lease from the county will have to be provided for by taxation. Therefore there is no basis in the record for plaintiff's contention that the stadium is 'designed to peculiarly benefit a few individuals rather than the public in general.'

Plaintiff in the injunction case also contends that the city is not authorized to erect and maintain a stadium, to rent it to private persons for their use and profit, or to rent advertising space on its scoreboard.

In support of these contentions, it is argued that a city is limited in its activities to those specified in the Revised Code. However, by reason of Sections 3 and 7 of Article XVIII of the Ohio Constitution, a charter city has all powers of local self-government, except to the extent that those powers are taken from it or limited by other provisions of the Constitution or by statutory limitations on the powers of a municipality which the Constitution has authorized the General Assembly to impose. See paragraph three of the syllabus of State, ex rel. Gordon, v. Rhodes (1951), 156 Ohio St. 81, 100 N.E.2d 225, and State, ex rel. Bruestle, v. Rich (1953), 159 Ohio St....