DALLAS -- The Missouri Supreme Court has refused to hear a legal challenge that has stalled a $270 million bond-financed expansion of the St. Louis convention center, including construction of a domed sports stadium.

Lawyers for the St. Louis Regional Convention and Sports Complex Authority said the decision, which upholds the rulings of two lower courts, means the agency could sell its tax-exempt bonds the week of Aug. 5.

"The legal challenge is dead," said Robert Ballsrud, a bond lawyer at Gilmore & Bell, the project's bond counsel. "We were very certain of the outcome, but we had to let it run its course."

The project had been delayed by a lawsuit filed in February 1990 in Cole County, Mo., challenging the constitutionality of the project because it was not approved by voters. The lead plaintiff in the case was the Rev. Larry Rice, and advocate for the homeless in St. Louis. He could not be reached for comment yesterday.

The Missouri Supreme Court issued its ruling late last week, deciding not to hear the appeal of rulings against the plaintiffs by two lower courts.

Even though the issue had been delayed by the lawsuit, Mr. Ballsrud said the authority still plans to disclose the legal challenge in bond documents, which could be printed in draft form later this week.

Because the lawsuit was highly publicized, he said the disclosure was meant to update would-be bondholders.

"To simply not address it at all leaves the question of 'I wonder what happened,'" the lawyer said. "This is a way to reassure investors."

After nearly 18 months of delays, project officials last week said they are ready to sell a triple-series issue that could include a nonrated series of lease revenue bonds. The proceeds would finance the long-awaited expansion of the downtown Cervantes Convention Center and build a 70,000-seat domed stadium.

A group led by Smith Barney, Harris Upham & Co. tentatively plans to sell between $250 million to $270 million of bonds in August. The bonds will be supported by a pledge of annual appropriations from the state of Missouri, St. Louis County, and the city.

Under an agreement, the triple-A rated Missouri will pay for half the estimated $20 million in annual debt service costs, while St. Louis County and the city will each pay 25%.

Lease revenue bonds paid through annual appropriation generally are rated at least one notch below the backer's general obligation bond rating. Because of that, the state series would likely be rated double-A; the county series single-A; and the city rating could be below investment grade. St. Louis is now rated Baa by Moody's Investors Service and triple-B by Standard & Poor's Corp.

As a result, plans call for the city issue be sold without ratings.

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