The City Harbor

The development of the City Harbor had been on hold pending a court case before the Alabama Supreme Court. The Supreme Court ruled 9-0 in favor of the city Friday and the harbor project is going forward. 

The City of Guntersville has won the lawsuit over whether it can lease the City Harbor to a private developer for development.

The Alabama Supreme Court ruled 9-0 in favor of the city.

"We are just glad this is behind us and we can move forward," Mayor Leigh Dollar said. 

It opens the door for Patrick Lawler's Lakeside Investments development to go forward at the harbor.

Lawler said the unanimous decision meant the most to him.

“It shows that everything we have done has been correct,” he said. “It has been 100 percent legal. A lot of work with a number of lawyers went into making sure we did everything right.”

Lawler said the project will be built, but the coronavirus pandemic has slowed down recruiting businesses to locate in the development.

“We have to get through this pandemic and make sure the restaurant industry and the economy is ready to support this,” Lawler said. “But we are 100 percent building it, period.”

Without the delay of the lawsuit, which has been more than a year, Lawler said the project would likely have been 80 percent complete by now.

He has already started work on the silos, which is expected to become a brew pub. A new lighted “City Harbor” sign atop the silos has drawn rave reviews.

The brew pup is expected to be the first part of the project to be completed.

“I would anticipate you will see construction resuming on that within 30 days,” Lawler said.

Citizen Joel Kennamer brought a lawsuit against the city and the harbor project. He argued that the state’s laws on such developments did not allow retail on city-owned property. The Marshall County Circuit Court dismissed his lawsuit, but he appealed it to the Supreme Court. The Supreme Court affirmed Circuit Judge Tim Riley’s dismissal.

The ruling cites a bunch of different cases and amendments that back the idea that “commercial development” can include retail, a key part of Kennamer's suit.

Kennamer was not pleased with the ruling, as you can imagine.

"It comes down to this, the taxpayers in Guntersville, through its Council, practically gave the harbor property away so that we can have boat slips, condos for rent, a brewpub, and maybe a restaurant, which, in the lease does not guarantee the city anything for the first 40 years, and upon default gives the mayor the ability to re-lease the property to anyone on any terms," he said in a statement.

"The ruling by the court is strange in that they gave cities and counties something that other states don't do and that is the ability to pick winners and losers in the retail sector of our economy by interpreting an amendment to our constitution by inserting the word 'retail' into it of which the legislature left out. In the cases we quoted as support for our case the courts said in previous rulings, 'If the legislature had meant retail, they would have said retail.' In my opinion this opens up a situation for abuse and corruption," Kennamer said. 

The Supreme Court ruling said, in part:

In sum, before the ratification of § 94.01, which applies to the governing bodies of all the counties and municipalities in Alabama, the legal landscape concerning economic development for local governments in Alabama was a patchwork of legislative acts and local constitutional amendments that provided varying degrees of empowerment to the respective counties and municipalities for which the acts and amendments were enacted or ratified. Section 94.01(d) expressly acknowledges these earlier local constitutional amendments and laws: "This amendment shall have prospective application only. Any local constitutional amendments previously adopted and any local law enacted pursuant to such amendment shall remain in full force and effect."

At the same time, § 94.01 also indicates that it is meant to increase some of the powers previously granted to counties and municipalities for economic development: "The powers granted by this amendment may be exercised as an alternative to, or cumulative with, and in no way restrictive of, powers otherwise granted by law to the county, or to any municipality, or to any agency, board, or

authority created pursuant to the laws of this state."

No local constitutional amendments pertaining to economic development have been ratified since § 94.01 was ratified, indicating that § 94.01 has proven to be sufficient for empowering governing bodies in counties and municipalities for attracting economic development to their respective regions.

In short, the decisions in McDonald's Corp. and Brown addressed only a portion of the statutory and constitutional law concerning the powers of county and municipality governing bodies with respect to the promotion of economic development.

As Smith indicates, the legislature quickly responded to this Court's decision in McDonald's Corp. by expanding the scope of the Cater Act with respect to what constituted a "commercial enterprise." Local constitutional amendments also continued to be adopted after Brown, some of those amendments being forerunners of the language eventually adopted statewide through § 94.01 and others employing the encompassing phrase "economic development." All of this, considered together with the fact that § 94.01(a)(2) is worded more broadly than the act at issue in McDonald's Corp. and the local amendment at issue in Brown, leads to the conclusion that those decisions do not provide the proper lens for interpreting § 94.01 for purposes of this case. Instead, as we have already stated, "commercial ... facilities of any kind" in § 94.01(a)(2) clearly includes retail businesses such as those that will be part of the City Harbor development. Accordingly, the City defendants had the authority under § 94.01 to lease the development property to Lakeside.

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