APPEAL from the Circuit Court of Sangamon County; the Hon.
SIMON L. FRIEDMAN, Judge, presiding.
MR. PRESIDING JUSTICE MILLS DELIVERED THE OPINION OF THE COURT:
Who is entitled to the accrued interest on an authority's bond proceeds?
The Springfield Metropolitan Exposition and Auditorium Authority (SMEAA) is a municipal corporation created by the Springfield Metropolitan Exposition and Auditorium Authority Act (Authority Act) (Ill. Rev. Stat. 1979, ch. 85, par. 1251 et seq.). The Authority Act requires SMEAA to promote, operate and maintain expositions and conventions within the city of Springfield and the metropolitan area (section 4 of the Act). In pursuit of these statutory purposes, SMEAA is empowered to purchase or construct convention or exposition centers or civic auditoriums, and SMEAA may exercise the right of eminent domain to acquire sites for such facilities (section 5(a), (c) of the Act). Consistent with these statutory purposes SMEAA, in 1968, began a study of the economic prospects for the construction of a convention center in Springfield, and exercised its eminent domain power in August 1974 to obtain a project site for the Prairie Capital Convention Center in Springfield.
The Authority Act provides several methods whereby SMEAA may raise funds to carry out its purposes, including the issuing of revenue bonds (section 10 of the Act). SMEAA also receives financing from the Metropolitan Civic Center Support Act (Support Act) (Ill. Rev. Stat. 1979, ch. 85, par. 1391 et seq.), which funding is at issue in the instant litigation.
The defendant, John W. Castle, is director of the Department of Business and Economic Development (BED). Castle is being sued in his official capacity in this suit for certain actions taken by BED. (Note: Executive Order No. 3 (1979) abolished BED and transferred its functions to the Department of Commerce and Community Affairs effective October 1, 1979. For the purposes of this opinion, however, the defendant will be referred to as BED.)
BED is an agency organized to foster and encourage the State's economic and industrial growth (Ill. Rev. Stat. 1979, ch. 127, par. 46.1 et seq.), and BED administers the Support Act. By virtue of the Support Act, the director of BED is authorized to certify any authority as eligible for State financial support, provided that authority meets certain conditions. (Ill. Rev. Stat. 1979, ch. 85, par. 1394(2).) When an authority is so certified, it is entitled to receive support payments from the State in a sum which equals the annual principal and interest payments to bondholders (debt service) on a portion of the bonds issued by that authority (section 4(3) of the Act).
The specific portion or dollar amount of the bonds which would be supported in this manner — referred to as the "base sum" — is determined by a formula included in this statute which provides that the base sum shall be the lesser of:
"(a) 75% of the total project costs as determined from applicant's [authority's] estimate.
(b) .0310 times the total assessed valuation for the year 1975 as equalized by the Department of Local Government Affairs, of all taxable property located within the metropolitan area of the Authority.
(c) $20,000,000." (Ill. Rev. Stat. 1979, ch. 85, par. 1394(3) (a) (b) (c).)
The statute further requires that after an authority is certified and a base sum established, BED and the authority "shall" enter into an agreement whereby the State will agree to pay support payments (section 4(3) of the Act).
In 1974, SMEAA issued 1974 bonds to finance acquisition and construction of the Prairie Capital Convention Center and later agreed with BED to a base sum for State financial support of those bonds. In August 1976, SMEAA applied to BED for recertification and additional State support as at that time the projected cost of the convention center, as estimated by SMEAA, had greatly increased. SMEAA applied for State financial support for a base sum of $16,688,409.28, and subsequently prepared an issue of revenue bonds, Series 1977, in the amount of $20,950,000. The prospectus for the Series 1977 bonds recited that State financial support payments in the amount of $16,189,000 were pledged as security for the bonds. (This figure represents a base sum of ...