Developer of tax increment financing (TIF) district sought declaratory judgment against city and city official that state statutory amendment allowing 15-year extension of TIF district without municipal consent did not violate Contract Clause of United States Constitution and state constitution.
Developer moved for summary judgment.
The District Court held that:
- Memorandum of understanding was not impaired on the grounds that district was allegedly subject to a 30-year term under resolution;
- Memorandum was the only arguable contract between developer and city; and
- Memorandum was not impaired even if the original TIF Act was incorporated into it.
Assuming that memorandum of understanding between city and developer related to tax increment financing (TIF) district, constituted a contract, the memorandum was not impaired by the West Virginia TIF Act, which authorized up to a 15-year extension for TIF districts established before a certain date without consent of the municipality, under the Contract Clause of the United States or West Virginia constitutions, on the grounds that district was allegedly subject to a 30-year term under resolution incorporated in memorandum; memorandum did not place a term or duration on the length of TIF district or the length of the TIF bonds used to finance the district, there was no reference to a promise that developer would seek city’s consent to extend the duration of the district or bonds, and it did not provide a deadline for which the city would receive deferred tax proceeds.
Memorandum of understanding between city and developer, related to the creation and financing of tax increment financing (TIF) district, was the only arguable contract between the city and developer for purposes of developer’s request for a declaratory judgment that the West Virginia TIF Act, which authorized up to a 15-year extension for TIF districts established before a certain date without consent of the municipality, did not violate the Contracts Clause of the United States or West Virginia Constitution; memorandum of understanding contained an integration clause which stated that the memorandum constituted the “entire understanding between” the city and developer, and could be amended only in a “subsequent writing executed by both parties.”
Memorandum of understanding between developer and city, which related to the establishment of tax increment financing (TIF) district, was not impaired under the United States or West Virginia contract clauses by amendments to West Virginia TIF Act which authorized up to a 15-year extension for TIF districts established before a certain date without consent of the municipality, even if the original Act, which required municipal approval, was incorporated into the memorandum, where the Act required the consent of a municipality to establish a district, but the amendment merely extended the termination date for existing TIF districts, such as the district in question.