State ex rel. Wagner v. ST. LOUIS CTY., ETC., No. 62024.

CourtUnited States State Supreme Court of Missouri
Writing for the CourtMORGAN
Citation604 S.W.2d 592
PartiesSTATE of Missouri ex rel. Frank H. WAGNER, Relator, v. ST. LOUIS COUNTY PORT AUTHORITY, Respondent.
Docket NumberNo. 62024.
Decision Date09 September 1980

604 S.W.2d 592

STATE of Missouri ex rel. Frank H. WAGNER, Relator,

No. 62024.

Supreme Court of Missouri, En Banc.

September 9, 1980.

604 S.W.2d 593


604 S.W.2d 594


604 S.W.2d 595

Edwin J. Kohner, J. Anthony Dill, St. Louis, for relator.

Thomas C. Walsh, Michael G. Biggers, Thomas K. O'Shaughnessy, St. Louis, for respondent.

Milton F. Svetanics, St. Louis, for amicus.

MORGAN, Judge.

This action in the nature of quo warranto is brought at the relation of a St. Louis County resident, taxpayer and owner of real property near an area proposed for development by respondent Port Authority.

Relator challenges the constitutionality of the Missouri Port Authority Law, contained in Chapter 68, RSMo 1978 as amended by 1979 Mo. Laws, H.B. 102 sec. 1, at 269 (hereinafter the Act), and also questions the legality of various activities of respondent which have been taken or are planned pursuant to the Act. Enacted initially in 1974, the Act represents specific statutory authority presumably in aid of the purposes of a port authority as set out in § 68.020. Among the powers given to an authority created pursuant to the Act are to approve the construction of all wharves, piers, bulkheads, jetties or other structures; to prevent or remove or cause to be removed obstructions in harbor areas; to recommend the relocation, change or removal of dock lines and shore or harbor lines; to acquire, own, construct, lease and maintain recreational facilities, industrial parks, industrial facilities and terminals, terminal facilities, warehouses and any other type port facility; to acquire, own, lease, sell or otherwise dispose of interest in and to real property and improvements situated thereon and in personal property necessary to fulfill the purposes of the port authority; to acquire rights-of-way within the district by purchase, negotiation or condemnation; to accept gifts, grants, loans or contributions; and to operate a recreational facility, industrial parks and terminals and terminal facilities, warehouses and any other type port facility for a limited period when private operators are not interested or available to do so. See § 68.025(1), 1979 Mo. Laws.

An authority also is empowered under § 68.040(1) to issue negotiable revenue bonds or notes "in such principal amounts as, in its opinion, shall be necessary to provide sufficient funds for achieving its purposes, including the construction of port facilities; establish reserves to secure such bonds or notes; and make other expenditures, incident and necessary to carry out its purposes and powers." The powers and procedures to be followed by an authority in this regard are those "now and hereafter conferred upon or applicable to the environmental improvement authority, Chapter 260, RSMo, relating to the manner or issuance of revenue bonds and notes . . ." § 68.040(6). The same section exempts an authority from taxation on the notes and bonds and the income therefrom from any taxes or assessments of the state or from any political subdivision thereof. § 68.040(5).

Pursuant to the earlier version of the Act, respondent St. Louis County Port Authority was created in 1977 by county ordinance. In 1978 the Authority was approved by the Transportation Commission of the state, which also later approved the boundaries of the port district as defined by the St. Louis County Council.

604 S.W.2d 596

The Authority now has embarked on what is called the "South Mississippi Project," involving three successive phases. The plan, approved January 16, 1980, calls for the development in the southern part of St. Louis County. According to the stipulation of facts entered into by the parties in this proceeding, Phase I is to consume twenty-five acres of land in an unincorporated area adjacent to the Mississippi River and "provides for the purchase and construction of certain improvements, fixtures, equipment and other related support facilities. . . for use as terminal, warehouse and other port facilities serving the general public."1 The cost of this phase is estimated at $6.39 million. Phase II is to encompass thirty-three more acres, also in an unincorporated area of the county adjacent to and immediately west of the acreage in Phase I. This second stage calls for the construction of $18.2 million of improvements for use as an industrial park serving the general public. The land to be used in Phases I and II is owned by Bussen Realty Company, a private concern headquartered in the county. Phase III is the development of a truck terminal at the intersection of Interstate Highway 270 and Koch Road, about one-half mile north of the other proposed developments. Total cost for this stage is estimated at $800,000.

The Bussen company's application for the development of Phases I and II has been approved by the Authority. Included in that approval is authorization for the Authority to issue and sell revenue bonds to finance the first two phases of the project; to enter into contracts for the purchase or construction of facilities proposed therein, to enter into mortgages and indentures of trust on the improvements in favor of the holders of the revenue bonds and to execute leases of both developments to Bussen consistent with its operation serving the general public. The Authority also has adopted a resolution authorizing issuance of revenue bonds for Phase III, subject to approval of a final plan therefor, and the execution of a mortgage, indenture of trust and lease or sale arrangement.

Challenges to the Act

Relator submits fourteen points and numerous subpoints, with some overlapping, in support of this original proceeding. For purposes of clarity, most points will be set forth in outline form, and will be considered separately where thought necessary.

I. The provision in the Act authorizing the issuance of revenue bonds permits their use in aid of private corporations, and such a use renders the provision invalid as violative of the principle that public funds may be expended only for public purposes.2

This claim is without merit because the Act serves a proper public purpose, and any aid provided to private corporations is merely incidental to such purpose. In making this determination, we again examine the expressed purposes of a port authority as expressed by the General Assembly in § 68.020:

It shall be the purposes of every port authority to promote the general welfare, to encourage private capital investment by fostering the creation of industrial facilities and industrial parks within the port district and to endeavor to increase the volume of commerce, and to promote the establishment of a foreign trade zone within the port districts.

A review of these purposes is limited by the long-standing rule that determination of what constitutes a public purpose is primarily for the legislative department and will not be overturned unless found to be arbitrary and unreasonable. In this regard

604 S.W.2d 597
the burden of so showing, as is usual in constitutional challenges to legislation, is on the party making the claim. For an expenditure to have a public purpose it must be
. . . for the support of the government or for some of the recognized objects of government, or directly to promote the welfare of the community. It may also be conceded that that is a public purpose from the attainment of which will flow some benefit or convenience to the public. In this latter case, however, the benefit or convenience must be direct and immediate from the purpose, and not collateral, remote or consequential.

This test was quoted with approval in Dysart v. City of St. Louis, 321 Mo. 514, 11 S.W.2d 1045 (banc 1928), and has been reiterated through the years. See, e. g., Menorah Medical Center v. Health and Educational Facilities Authority, 584 S.W.2d 73 (Mo. banc 1979); State ex rel. Jardon v. Industrial Development Authority of Jasper County, 570 S.W.2d 666 (Mo banc 1978); and State ex rel. Mitchell v. City of Sikeston, 555 S.W.2d 281 (Mo. banc 1977).

In connection with this test it also has been said that if the primary purpose of a statute is public "the fact that special benefits may accrue to some private persons does not deprive the government action of its public character, such benefits being incidental to the primary public purpose." State ex rel. Atkinson v. Planned Industrial Expansion Authority of St. Louis, 517 S.W.2d 36, 45 (Mo. banc 1975). See also, State ex inf. Dalton v. Land Clearance for Redevelopment Authority of Kansas City, 270 S.W.2d 44 (Mo. banc 1954), and Land Clearance for Redevelopment Authority of St. Louis v. City of St. Louis, 270 S.W.2d 58 (Mo. banc 1954).

Relator has failed to meet his burden of showing that the legislature's determination that the Act is to serve a public purpose is arbitrary and unreasonable. Moreover, the purposes of the Act are comparable to that contained in other legislation which has been held heretofore to be public ones.

For example, in Jardon, supra, relator attacked the Industrial Development Corporations Act because it allowed "the expenditure of public funds for other than a public purpose by authorizing the issuance of revenue bonds to finance facilities to be used by private corporations." Id. at 673. The Court held that the issuance of revenue bonds for commercial, industrial, agricultural and manufacturing facilities did serve the essential public purposes of improving employment and stimulating the economy. The same could be said for the issuance of revenue bonds pursuant to the purposes of this Act. Furthermore, facilitating the transportation of goods by sea as well as by land long has been recognized as a proper purpose for the expenditure of public funds. 26 R.C.L. § 36 (1920). See also, North Carolina State Ports Authority v. Citizens Bank & Trust Co., 242 N.C. 416, 88 S.E.2d 109, at 112 (1955) wherein it was said:


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