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Town of Sterlington v. East Ouachita Recreation District No. 1

Court of Appeals of Louisiana, Second Circuit

January 27, 2017

TOWN OF STERLINGTON, ROBERT HOLTZCLAW, LUCIA HOLTZCLAW, AND JEROD CROSS Plaintiffs-Appellants
v.
EAST OUACHITA RECREATION DISTRICT NO. 1 Defendant-Appellee

         Appealed from the Fourth Judicial District Court for the Parish of Ouachita, Louisiana Trial Court No. 2016-3252 Honorable C. Wendell Manning, Judge

          C. BRYAN RACER, A.P.L.C. By: C. Bryan Racer Counsel for Appellants.

          STEPHEN TEW Interim District Attorney Counsel for Appellee.

          JAY B. MITCHELL Assistant District Attorney.

          Before BROWN, PITMAN, and GARRETT, JJ.

          GARRETT, J.

         This matter is before us as an expedited appeal, pursuant to La. R.S. 13:5128. The plaintiffs, Town of Sterlington and Lucia Holtzclaw, [1] appeal from a trial court judgment denying their challenge to the proposed expenditure of ad valorem tax proceeds by the East Ouachita Recreational District No. 1 ("EORD") to secure bonds and their request for an injunction prohibiting the issuance of the proposed bonds. For the reasons outlined below, we affirm the trial court judgment.

         FACTS

         On April 18, 1977, the Ouachita Parish Police Jury ("OPPJ") created the EORD for the purpose of owning and operating playgrounds and other facilities and generally to engage in activities which would promote recreation and any related activity designed to encourage recreation and promote the general health and well-being of youths.[2] Pursuant to those purposes, the EORD opened three recreational facilities, namely, Swartz-Lakeshore ("Swartz"), Osterland and Sterlington. The EORD derives its funding primarily from a property tax of 7.48 mills and the revenue it generates through the programs conducted at the facilities.

         Ad Valorem Tax Renewal

         On November 17, 2014, the OPPJ adopted a resolution approving a request by the EORD to hold a special election seeking voter approval for a special property tax ("ad valorem tax") renewal proposition.[3] The ad valorem tax was to cover a period of 10 years (2016-2025), "for the purpose of constructing, improving, maintaining, operating and equipping the recreational facilities of the District." The voters approved the tax on March 28, 2015.

         The EORD then moved forward with plans to upgrade the facilities, determining to upgrade one facility at a time. Osterland was the facility chosen for the initial upgrades due to its central location and the fact that it would cause the least disruption to game schedules during construction.

         On September 26, 2016, the EORD adopted a resolution authorizing the issuance of limited tax bonds ("Bonds"), [4] not to exceed $5, 000, 000.00, for the purpose of "constructing, improving and equipping recreational facilities of the Issuer within its jurisdiction, " payable from the ad valorem tax. Notice of the EORD's actions was published in a local weekly newspaper on September 29, 2016.[5] On October 3, 2016, the OPPJ adopted a resolution approving the issuance of the bonds.

         Tourism Grant

         On July 10, 2016, the EORD submitted an application for a capital improvement grant for both the Swartz and Osterland facilities with the Monroe-West Monroe Convention and Visitors Bureau ("CVB"), whose stated mission is "to attract conventions and tourists to the area."[6] The CVB offers grants for the purpose of developing the tourism industry in Ouachita Parish. The CVB is funded by hotel occupancy taxes, and grant applicants are required to demonstrate how the capital improvement "will be marketed to increase hotel occupancy."

         Within their application, the EORD indicated a hotel occupancy of "1000" and stated that the completion of the project "will attract additional state, regional, and national tournaments to the community." The EORD further stated that the project would "give us a much larger footprint in the sports tourism industry and draw thousands of new visitors each year."

         The following statements were also made by the EORD:

Last year we partnered with West Monroe Baseball and the Convention and Visitors Bureau to co-host a Dixie Boys State Tournament and a Girls World Series Tournament. These events drew thousands of visitors, with the girl's [sic] tournament accounting for over 1, 500 hotel nights during the tournament. The economic benefit for our community was tremendous. . . .
The facility upgrades we are proposing would make the Ouachita Sports Complex the premier sports facility for our region. This premier facility will allow the East Ouachita Recreation District and the Convention and Visitors Bureau the opportunity to pursue large scale tournaments, thus making a huge economic impact on our community. These state-of-the-art facilities will also have a positive impact on the quality of life for our local residents, as the complex has the ability to host a variety of sports events and activities throughout the year. Accordingly, within a few short years, the creation of the Ouachita Sports Complex will generate enough tourism dollars to more than offset the Convention and Visitor's [sic] Bureau Investment. The economic impact of future tournaments will be substantial. A single large tournament will generate at least $500, 000.00 for Northeast Louisiana.

         The EORD requested the sum of $6, 758, 725.00, [7] but was awarded a $1, 000, 000.00 grant on July 25, 2016, "to Complete 8 full 200 ft. Fields." The Town of Sterlington also applied for a capital improvement grant of $350, 000.00, for a new sports complex, but was denied.[8]

         On October 25, 2016, the Town of Sterlington ("Sterlington"), along with Robert Holtzclaw, Lucia Holtzclaw and Jerod Cross[9] ("Plaintiffs"), as taxpayers and residents of Ouachita Parish and parents of youths who participated in sports, filed this suit against the EORD challenging the validity of the bonds and, alternatively, seeking declaratory judgment and injunctive relief. Plaintiffs alleged that, pursuant to "public pronouncements, " the EORD intended to invest the bond proceeds in construction at the Osterland location for "the growth [of] sports tourism and youth travel baseball and softball events" ("travel ball") and "the economic benefits of bringing participants from outside of the District." Plaintiffs contended that sports tourism and economic growth were outside the purpose of the recreational district and that the dedicated tax ...


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