by Michael Clancy – Jan. 25, 2010 12:46 PM
The Arizona Republic
Phoenix’s $97.4 million deal with CityNorth will be allowed to stand, but future economic development agreements will have to comply with a stricter standard, the Arizona Supreme Court decided today.
The case will go back to the Arizona Court of Appeals for decisions on other constitutional issues.
Deciding the case Monday solely on the state Constitution’s gift clause, the court said confusion regarding prior decisions led the city to conclude that the agreement was constitutional.
The High Court, which ruled unanimously, said the appeals court made a mistake when it concluded the agreement “unduly promoted a private interest.”
The new standard requires that such agreements must have a direct benefit – in the CityNorth case, the 3,180 public parking spots and the 200 park-and-ride spots – and that indirect benefits may not apply. Phoenix and CityNorth argued that such indirect benefits as future tax revenue, employment and other issues should apply.
Both sides expressed satisfaction with the result, but Clint Bolick of the Goldwater Institute, who filed the lawsuit challenging the agreement, said he was disappointed that the agreement itself was not ruled out.
“We lost the battle for now, but we won the war,” Bolick said.
Deputy City Manager David Krietor, who was closely involved with the decision, said the decision “vindicated” the agreement.
As for future agreements, Krietor said the city was OK with the court’s direction.
