Duckworth v. City of Kansas City, 61421
Decision Date | 29 April 1988 |
Docket Number | No. 61421,61421 |
Citation | 758 P.2d 201,243 Kan. 386 |
Parties | Bill L. DUCKWORTH and Chemold Systems, Inc., Appellants, v. The CITY OF KANSAS CITY, Kansas, Appellee. |
Court | Kansas Supreme Court |
Syllabus by the Court
1. As a general rule, a municipality may authorize by ordinance the appropriation of public money for private individuals as long as the appropriation is for a public purpose and promotes the public welfare.
2. While a trial court considering a motion to dismiss must accept the factual allegations contained in the petition as true, it is not required to treat the legal conclusions contained within the petition as also being true.
3. The requirement that an administrative agency, in exercising delegated powers, must comply with articulated standards does not apply to legislative bodies.
4. Upon consideration of a declaratory judgment action, the record is examined and it is held that loans and grants to revitalize and rehabilitate the downtown Kansas City business area do not violate the Kansas Constitution nor United States Constitution in any of the particulars asserted by the plaintiffs.
Edward H. Powers, Sr., Kansas City, argued the cause and was on the brief for appellants.
Jody Boeding, Asst. City Atty., argued the cause and was on the brief for appellee.
The plaintiffs, Bill Duckworth and Chemold Systems, Inc., filed the present action seeking declaratory relief against the City of Kansas City, Kansas. The plaintiffs' petition alleged that development loans authorized by the City of Kansas City were illegal and unconstitutional. The plaintiffs appeal the order of the district court granting the City's motion for dismissal.
For the purpose of this appeal, the facts as stated in the plaintiffs' petition are accepted as true. In 1986, the plaintiffs remodeled property located at 846 State Avenue in Kansas City, Kansas, at a cost of $600,000. The plaintiffs financed their improvements of the property by obtaining private financing at 12% interest. On April 28, 1987, the plaintiffs applied for $150,000 in municipal community development funds from the City in order to make their property barrier-free for the purpose of hiring handicapped persons. The plaintiffs were informed on June 5, 1987, that their request would not be approved. The City did not assign any reason for its refusal other than a statement that other projects had priority.
The plaintiffs' petition also contends that, at approximately the same time, the City had decided to approve a loan of $2,000,000 to Robert G. Cotitta to remodel a building in downtown Kansas City. The petition states that the loan to Cotitta provided for 8% interest and deferred any substantial payments upon the loan for the first five years. Cotitta is a "bad credit risk" according to the plaintiffs' petition, which alleges that Cotitta had defaulted on a prior $200,000 loan from the City. The plaintiffs' petition also challenges the City's issuance of grants and loans of approximately $250,000 to the Granada Theatre in downtown Kansas City, Kansas. The plaintiffs allege that the recipients of these development funds from the City "will have a competitive advantage over the plaintiffs" because they will be able to rent their facilities "for less than the plaintiffs because of the lower interest rate and deferred payments agreed to by the City." The plaintiffs contend that the issuance of the loans by the City was made without appropriate standards and is unjust, discriminatory, and unconstitutional. In addition, plaintiffs contend that the method by which the loans were budgeted violates K.S.A. 79-2927 and K.S.A. 79-2934.
The plaintiffs first challenge the constitutionality of the municipal development loans by the City both on due process and equal protection grounds. A review of our decisions relating to the constitutional authority of governmental agencies to issue economic assistance requires us to reject plaintiffs' contention. In Ullrich v. Board of Thomas County Comm'rs, 234 Kan. 782, 676 P.2d 127 (1984), this court recognized that, as a general rule, the state legislature may appropriate public money for private individuals so long as the appropriation promotes the public welfare. In Ullrich, this court stressed that the wisdom of a particular public policy could not be decided by the courts, but must be resolved by the legislature.
234 Kan. at 789, 676 P.2d 127.
Although the issue in Ullrich was the constitutionality of transferring assets from the county hospital to a private nonprofit hospital, the rationale for our decision is applicable to the present case:
234 Kan. at 790, 676 P.2d 127.
In State ex rel. Ferguson v. City of Pittsburg, 188 Kan. 612, 364 P.2d 71 (1961), and State ex rel. Tomasic v. City of Kansas City, 237 Kan. 572, 701 P.2d 1314 (1985), this court upheld the constitutionality of governmental assistance of private economic development for the purpose of promoting the overall economic welfare of the general public. Although both cases involve the grants of industrial revenue bonds rather than the issuance of loans by a city, the analysis for constitutional purposes is identical.
In State ex rel., v. City of Pittsburg, this court upheld the constitutionality of the issuance of revenue bonds, stressing the limited ability of the courts to review the wisdom of a particular legislative enactment as long as the enactment was designed to serve a public purpose. We said:
We adopted the same view later in State ex rel. Tomasic v. City of Kansas City. As long as a governmental action is designed to fulfill a public purpose, the wisdom of the governmental action generally is not subject to review by the courts. We said:
237 Kan. at 579, 701 P.2d 1314.
The standards for review of the constitutionality of the challenged governmental actions in the context of the equal protection clause is also directed at the existence of a rational basis for the governmental actions. In Manhattan Buildings, Inc. v. Hurley, 231 Kan. 20, 643 P.2d 87 (1982), the court reviewed the rules relating to such cases.
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