The Arizona Court of Appeals today rejected most of the $97.4 million subsidy that Phoenix offered to land the CityNorth shopping development near Scottsdale Road and Loop 101. The court agreed with the Goldwater Institute that the subsidy generally violates the Arizona Constitution’s “gift clause.” Phoenix tried to claim the subsidy was justified because it paid for a 3,100-vehicle parking garage with guaranteed free parking for the public. Instead, the court said the city could only legally pay for 200 spaces reserved for commuters who park and ride on public transit. The rest of the subsidy is an unconstitutional benefit to private interests, the opinion says.
The appellate decision overrules a lower court that found what Phoenix did was just fine. So it’s easy to predict that Phoenix and CityNorth will further appeal to the Arizona Supreme Court. But this ruling gives new credence to the move of the Goldwater Institute to challenge the subsidy and inject new life into the “gift clause.”
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