AUGUSTA — A lawsuit is threatening to upend Augusta’s limits on short-term rental properties, rules locals credit with keeping this small wine-country community from being overrun by property investors.

Leaders here say the rules, written as the Hoffmann family pitched plans to turn the rural area into a major tourist destination, have worked well to keep homeowners in homes.

Now they’re worried the lawsuit, filed by Laura Bissonnette of rural St. Charles, could challenge the whole ordinance.

Some are also puzzled by Bissonnette. Officials say they have no record of her operating or applying to operate a short-term rental — or even owning property in this town of 250.

“I mean, who does she think she is? Why does she care?” said Joann Milster, president of the local chamber of commerce. She said she was especially troubled that someone from outside the community was trying to interfere with its governance.

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“Being offended by someone else’s ordinances when you don’t live there is absurd,” she said.

Cities all across Missouri have enacted similar ordinances, including in St. Louis, where in November 2023 city officials placed caps on the number of short-term rentals that can operate within buildings, based on their size. The city also has safety requirements and charges the property owners a $150 application fee.

Bissonnette’s attorney, Zachary McMichael, declined to make her available for an interview and said state law is “clear that any taxpayer has authority to challenge unconstitutional taxing ordinances like this one.”

Augusta, about 60 miles west of St. Louis, was thrust into the international spotlight four years ago when Washington, Missouri, natives David and Jerri Hoffmann announced they were prepared to invest more than $100 million to rejuvenate the rural community. The goal was to turn the town and the surrounding hills into wine country rivaling California’s Napa Valley. The investment later grew to $150 million as the company purchased businesses in Augusta, Washington and St. Louis.

The Hoffmanns’ plans generated interest from property developers who hoped to cash in on the expected rise in tourism by opening short-term rentals.

New rules arrive

And that worried residents.

“It seemed like every property that went up for sale was being bought by someone who wanted to make it an Airbnb,” said Kelly Dolan, the owner of the H.S. Clay House Bed & Breakfast and Applegate Inn, two of the handful of bed and breakfasts that have operated in Augusta for several years.

Town leaders, residents and business owners recognized that “they didn’t want to wake up one day to realize that no one lived in town anymore because everything was a short-term rental,” Dolan said.

So in 2022, the town board enacted a monthslong moratorium on the rentals as they drafted an ordinance that capped the number at 15, required a business permit to operate, limited guests to a maximum 28 consecutive nights of stay and required an annual inspection from the Augusta Fire Department.

It also required short-term rental owners to pay a $200 annual fee and the county’s hotel occupancy tax. By the time the board approved the ordinance in January 2023, the number of short-term rentals operating in Augusta had doubled, to 13.

“I don’t see anything wrong with the policies,” said Dolan, the innkeeper. She described the rules governing short-term rentals, which include bed and breakfasts, as “pretty conservative.”

She said her two bed and breakfasts — with nine total bedrooms — typically see between 1,500 and 2,000 bookings a year, total. She recoups the cost of the permit within a single night.

“I pay all my fees — I can’t say that I enjoy doing that — but I pay them. And as a business owner, I think it is only fair to expect everyone to pay their fees,” Dolan said.

Bissonnette’s lawsuit challenges the $200 annual fee the town charges operators of short-term rentals.

‘She better be prepared’

The suit, filed earlier this month in St. Charles County’s civil court, says the fee violates the state constitution’s prohibition on “taxes disguised as pseudo-municipal fees.” A hearing has not yet been scheduled.

“Our understanding is that the town of Augusta has recognized the merit of the lawsuit and has instructed their attorney to amend the ordinance to comply with Missouri law,” said McMichael, Bissonnette’s attorney.

Town board President Joe Buchheit confirmed that the city is preparing to make a “small modification” to the ordinance at its meeting Monday but stopped short of saying just how it might be changed.

Mark Piontek, city attorney for Augusta, did not respond to requests for comment.

Dolan said she hopes the town leaders don’t abandon the requirements.

“If they cave, then it is, ‘Katy bar the door,’ because then anyone and everyone will feel like they can just come in here and do what they want,” Dolan said.

In December, before filing suit, McMichael sent a letter to the town saying that the $200 application fee violates the state’s Hancock amendment, which prohibits a municipality “from levying any tax, license or fee ... without the approval of the required majority of the qualified voters” of that municipality.

If the Augusta residents had voted to enact the fee, then it would be legal, McMichael argued in the letter.

Both Dolan and Milster, the chamber president, say they hope the town board decides to send the matter to voters rather than rescind or gut the ordinance.

“It would pass overwhelmingly. It would pass with such flying colors,” Milster said. “If (Bissonnette) wants to take this to a vote of the people because she doesn’t want to pay a $200 fee, then she better be prepared to pay it. This is all going to backfire on her humongously.”

Post-Dispatch photographers capture hundreds of images each week; here's a glimpse at the week of Feb. 16, 2025. Video edited by Jenna Jones.

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