The Business Loop Community Improvement District has agreed to pay Jennifer Henderson $25,000 to settle a long-running lawsuit that challenged the legitimacy of the district’s 2015 sales tax election.
Henderson’s attorney, Richard Reuben, filed a motion to dismiss the lawsuit with prejudice Tuesday, ending a 5½-year legal battle. Circuit Judge Jeff Harris granted that motion Wednesday. Both parties will pay their own legal fees.
Henderson initially filed the lawsuit in 2016 to protest the way the district conducted an election asking residents for the authority to levy a half-cent sales tax on goods purchased within its boundaries. Reuben and Henderson argued that the results of the election should be voided because the election was unconstitutional.
Henderson claimed that the election lacked proper notice and a secure and secret ballot box and that it was administered by a biased election administrator.
The district gave voters only 10 days of notice of the election, which Henderson argued was insufficient. She also said voters were required to print their names and addresses on their ballots, which violated voters’ rights to a secret ballot. Because the ballot box was opened and the votes counted in the district's office, the neutrality of the election was questioned as well.
Meanwhile, the CID argued that the election was held in a fair and legal process.
Voters in December 2015 passed the sales tax 4-3. It generates about $300,000 for the community improvement district, which uses the money to pay staff and for projects intended to beautify and promote redevelopment of the Business Loop.
Henderson also claimed in the lawsuit that Business Loop CID Executive Director Carrie Gartner had inappropriately tried to interfere with her right to vote by asking her to cancel her voter registration. At the time, Henderson was believed to be the only person living within the district’s boundaries and thus would have been in power to decide the fate of the sales tax on her own.
The district board, which had sought to draw boundaries excluding any resident, opted against having a sales tax election until it later learned that there were 14 people living in the district.
The long-running case became complicated when Circuit Judge Jodie Asel in 2016 sided with the loop’s attorneys, who argued that the Circuit Court lacked jurisdiction to hear a challenge to a community improvement district’s sales tax election. She initially dismissed the case without prejudice, which left Henderson’s case in limbo.
In 2019, the Missouri Supreme Court, in response to a plea from Reuben, ordered Asel to declare her dismissal a judgment, which would allow Henderson to appeal. The Missouri Court of Appeals for the Western District later ordered the case returned to Boone County Circuit Court.
Attorneys on both sides have spent the past several months filing motions, holding hearings with Harris and issuing subpoenas. The case had been scheduled for trial in late July.
Gartner said the settlement “allows us to move forward on a lot of exciting projects.”
“We were just awarded $700,000 in American Rescue Act funding (with assistance from Senator Rowden) to fund the construction of sidewalks on the east side of the Business Loop,” Gartner said. “If we can bring the east end of the CID up to par with the west end, that is a huge accomplishment.”
Reuben said Thursday that he was unable to discuss the settlement. Because the district is a public governmental body, Gartner provided the settlement document after the Missourian issued a formal request.
Under the agreement, the district did not admit to any of Henderson’s allegations.
Gartner said that the district from October 2020 through April 2021 alone spent $125,196 on legal fees. She could not immediately provide a total number for the legal expense of the litigation.