October 31, 2024

St. Louis County levee district settles with Hollywood Casino – St. Louis Post-Dispatch

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Part of the Howard Bend Levee, seen here on Friday, Nov. 20, 2020, runs north along the banks of the Missouri River to Hollywood Casino in Maryland Heights.
MARYLAND HEIGHTS — Hollywood Casino has resolved its long-running dispute with the Howard Bend Levee District, dropping a five-year-old lawsuit in exchange for a $3.5 million refund and an agreement that the casino, once the district’s largest taxpayer, will make only small payments toward the levee in future years.
The agreement essentially frees the casino from continuing to serve as the primary funding source for the district, which since the mid-1990s had used the gaming property to fund millions of dollars of work building the levees needed to contain the Missouri River and tee up the area for development.
The settlement between the levee district and the casino, reached June 27, cuts the roughly $800,000 annual payment the levee district sought to charge Hollywood Casino to a maximum of $10,000. And St. Louis County will refund the casino over $3.5 million in tax payments paid under protest during the years of litigation, according to a copy of the settlement obtained through a public records request.
A spokesman for Hollywood Casino’s parent company declined to comment on the settlement, as did Howard Bend Levee District President Ed Ortmann. The settlement agreement bars each side from saying anything other than “the matters ‘were resolved to everyone’s mutual satisfaction.’”
The casino, which had recently represented one-third of the levee’s tax base, sued in 2019, alleging the district was spending money on projects the casino did not agree to fund and charging the casino for more than the value the levee provided to it.
As that litigation dragged on, other large entities in the district — including the Metropolitan St. Louis Sewer District and the city of Maryland Heights — also threatened to withhold their payments as they and others questioned how the district and its attorneys, led by David Human of Husch Blackwell, came up with their tax assessments.
Unlike most taxing districts, levee districts can charge assessments to public and taxpayer entities. The disputes in Howard Bend underscored how taxpayers and utility customers around the region were essentially paying taxes to a levee district formed to protect just a few landowners and subsidize future development in a former floodplain.
It also highlighted similar taxpayer subsidies around the state. In early 2022, the Missouri Department of Transportation won a court victory around the time against a Southeast Missouri levee district run by the same law firm after alleging the public agency was being treated as the “deep pockets” to finance the levee’s operations.
But St. Louis County took a different approach than the state. As pressure on Howard Bend mounted and threatened its financial stability, St. Louis County stepped in with a needed lifeline and allowed the district to begin taxing it double, or $500,000 per year, for benefits county officials said the levee provided to Creve Coeur Lake Park.
Then, St. Louis County agreed to pay $1.4 million upfront to the district for a new $8.2 million pump station near the Creve Coeur Airport, according to the levee district financial disclosures. The pump station finished construction earlier this year, Ortmann said.
District leaders hope the new pump, which should help prevent flooding in the area after heavy rains, finally attracts new development that will help fund the district’s operations. New warehouses and logistics parks are already breaking ground in the area, increasing land values and further pushing up levee tax revenue.
Large taxpayers in the district such as MSD dropped their objections and began paying into the district again, and tax increases on St. Louis County and other property owners have nearly doubled Howard Bend’s revenues since 2018. The district said it collected $5 million last year, according to its public financial disclosures.
The district’s improving financial situation has made it less reliant on the casino for its revenues. But the courts also dealt Howard Bend a setback in recent months after the district sought to reassess the amount the casino had to pay.
In January, a commission appointed by the St. Louis County Circuit Court sided with the casino, which argued its own flood protection infrastructure meant it received little benefit from the Howard Bend Levee District. The commission said the casino should only pay a fraction of what the levee district sought to charge it. It valued the casino’s benefits at less than 2% of the value the levee district claimed it provided to the casino.
The settlement between the two sides adopted the value the St. Louis County court-appointed commission determined.
As part of the settlement, Hollywood Casino also agreed to make a $300,000 payment to the levee district. The district, meanwhile, agreed to repay $200,000 of that by 2029.
St. Louis Post-Dispatch photographers captured June 2024 in hundreds of images. Here are just some of those photos. Edited by Jenna Jones.
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Part of the Howard Bend Levee, seen here on Friday, Nov. 20, 2020, runs north along the banks of the Missouri River to Hollywood Casino in Maryland Heights.
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