Ballpark assessment: State Supreme Court turns a blind eye

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An email this morning from attorney Kent Morlan, a downtown property owner and resident who represented his fellow property owners in the fight to overturn the misuse of the city's power to impose an assessment to pay for the new downtown ballpark. The politician behind that misuse was then-Mayor Kathy Taylor, who convinced a 5-4 majority of the City Council to go along with her. The assessment is a flat rate based on square footage of land plus square footage of buildings.

For a refresher on the case, the proper use of an assessment district under Oklahoma law, and the manipulations of Kathy Taylor and her wealthy allies, please see
my April 22, 2009, column.

You may also want to read this related story, about the Tulsa Development Authority's mistreatment of Cecilia and Will Wilkins developers who were working with TDA to redevelop a vacant lot. All was going well until the TDA-owned site across the street was chosen for the ballpark; suddenly, according to testimony in the case, Kathy Taylor started working behind the scenes to get the TDA to push the Wilkinses out of the way.

As this March 2009 letter from City finance director Michael Kier states, an assessment is a lien on the property, and if it is not paid within a year, the city is legally required to foreclose.

As you'll read below, there are significant legal issues at stake regarding the power of government to impose what amounts to a tax in all but name, but without the safeguards surrounding the imposition of taxes in Oklahoma.

The State Supreme Court should have taken up the issue; that they were unwilling makes me wonder about political pressures at work behind the scenes. If justice were done and the property owners' complaint were upheld, it would be yet another embarrassment for Kathy Taylor.

Is the ballpark a good thing for downtown? Of course. Is it as good for property a mile away as it is for property across the street? Of course not. Is there any benefit for state- and county-owned properties, who have to pay the assessment as well? No.

Here is Morlan's email:

It is with great regret and disappointment that I have to inform you that by a 5 to 4 vote the Oklahoma Supreme Court has declined to grant the Appellants' Petition for Cert. after the Oklahoma Court of Appeals affirmed the judgment in favor of the City of Tulsa in Cox v. City of Tulsa.

As a result, all of you will directly or indirectly pay a total of $60 million in assessment to the City of Tulsa to pay the principal and interest on revenue bonds issued by the Baseball Stadium Trust to build the ONEOK Stadium located between the Brady District and Greenwood District in the northeast corner of the IDL.

By denying the Appellants' application for cert., the Supreme Court tacitly approved the City of Tulsa forcing approximately 1,400 owners of property located inside the IDL to pay for a general public improvement baseball stadium leased to the Tulsa Drillers for 10% of the annual principal and interest payments due on the bonds.

The Oklahoma Constitution allows municipalities to assess properties benefited by a local public improvement that directly and specially benefits the properties assessed for the cost of the improvements. Whether the City of Tulsa had the power to assess properties located within the IDL to pay for the ball park was a pure issues of law, but a motion for summary judgment on that issues was overruled by Judge Kuehn. She then severely limited the evidence that the sole remaining plaintiff was allowed to introduce in support of its assertion that its vacant lots and warehouse buildings located a mile south of the park did not benefit at all from the presence of the park before entering judgment in favor of the City.

The Court of Appeals, in a tortured opinion that completely ignored the facts and the law affirmed. The only hope was that the Supreme Court would grant certiorari and directly address the significant public policies issues raised by the Plaintiffs, including taking without just compensation of their property and unconstitutionally exempting property owned by religious institutions while assessing non-profits (which the Attorney General's offices opined was unconstitutional). That hope has proven to have been illusory.

Ed Cox, who, along with his wife, owned the Blair Apartment at 7th and Elwood, sought my assistance in 2008 to protect his property from being assessed died during the nearly five year struggle to protect hundreds of Downtown Tulsa property owners from having their property taken without just compensation. Ed died during the struggle. Whoever owns the property will be assessed for the next 25 years. The property has not benefited in any way from the presence of the ball park downtown. The same is true of Mike Samara, who owns a warehouse property located west of the BOK Center. Likewise the Zigler family on south Detroit and Mark Price on south Frankfurt and hundreds of other properties.

I promised Ed that I would prosecute his case free of charge because I did and do believe that assessing his property to build a ball park for the benefit of all of Tulsans was wrong. I fought the best fight that I knew how. I kept the faith with him but the legal fight is over. To say that I am disappointed with the treatment of my clients by the courts of Oklahoma would be an understatement. We had the facts and we had the law and we had what was right and just but we obviously did not have the politics on our side.

Maybe Kathy Taylor, who is again spending millions to be once more the Mayor of the City of Tulsa, will see fit to right the wrong that she created when she successfully imposed a huge economic burden on the owners of properties inside the IDL when she got the City Council to approve the resolution creating the Baseball Stadium Assessment District.


In 2009, then-Councilor Bill Christiansen explains his decision to vote against the ballpark assessment roll. (Video from Steven Roemerman.) At the same meeting Councilor Rick Westcott, an attorney, explained the legal issues involved. (Here's part 2.) He notes that the old assessment district was proportional to proximity to the Main Mall and Bartlett Square, based on the assumption that the benefit would be greater near these amenities.

Here are excerpts from the plaintiff's motion for summary judgment, which provides more detail about the legal basis for the suit.

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Graychin said:

Tulsa's wonderful ballpark, anchoring one end of the Brady Arts District, likely benefits that vacant downtown lot (one of SO MANY) much more than its owner is willing to recognize. He might only notice it when the value of his lot increases and his ad valorem taxes go up.

I'm a non-lawyer who has no economic interest in any downtown property subject to the ballpark assessment. From my outside viewpoint, the huge kerfuffle over the assessment seemed much more about politics and political grudges than about any actual economic harm.

That said, I have a question:

In what sense is a tax - or assessment, or whatever you may call it - a "taking" of property without just compensation? Clearly, the authors of the Fifth Amendment did not disapprove of taxes as a matter of principle, and understood a difference between a tax and a taking. A difference that Mr. Morlan fails to comprehend.

No wonder his appeal fell on five sets of deaf ears at the Supreme Court. His email makes him sound like a garden-variety government-hating tax protester.

I am not a lawyer either, but I assume that "taking" refers to the imposition of an unlawful assessment, that is, exceeding the boundaries that the legislature and the state constitution places on assessments. Since an assessment is a lien on real property and a lien interferes with the rights of a property owner, the unjust imposition of a lien could be construed as a taking.

I would not assume that this letter is the sum total of Mr. Morlan's arguments to the State Supreme Court.

The people who brought this lawsuit were not politically minded at all. They were were small property owners, far from the site of the ballpark, who saw the cost of owning property within the Inner Dispersal Loop skyrocket with no direct benefit.

Another question that the court should have addressed is whether increased property value constitutes a direct benefit that warrants an assessment. If you'll read those previous columns, you'll see that assessments are to be used for capital improvements with a direct benefit to the property owner being assessed -- new sidewalks, street-widening, off-street parking.

Bob said:

So, someone (friends of Kathy Taylor?) think that property values downtown have increased because of the construction of the ONEOK Driller Field?

Poppycock. What will they say when downtown property values head downwards, on their perpetual periodic economic cycle of increase, plateau, and decline in property values?

Oh, I know: They and their paid mouthpieces at the Metro Tulsa Chamber of Commerce will assuredly say:

We need to expand the ONEOK Driller Field, and remodel the BOK Arena, and convert the (Cox) Convention Center to a spaceport for suborbital flights to a permanently floating space station, in order to attract more businesses to re-locate downtown.

I wonder how many downtown property owners would love to dump their property to avoid paying the BID assessment for the next 25 years?

Probably lots.

Do you think that the State Supreme Court judges are just afraid of King Kaiser and his cronies?

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This page contains a single entry by Michael Bates published on May 5, 2013 10:42 AM.

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