| News |

Supreme Court to Hear Phoenix Appeal in CityNorth Case

Keep New Times Free
I Support
  • Local
  • Community
  • Journalism
  • logo

Support the independent voice of Phoenix and help keep the future of New Times free.

This just in: The Arizona Supreme Court will revisit the appellate decision that struck down the city of Phoenix's $97 million subsidy of the CityNorth development.

Today's decision to grant review is a victory for the city, which had fought for the right to give the project's developers half of all sales tax generated at the northeast Phoenix shopping center -- and the Thomas J. Klutznick Company, which could now regain the millions in revenue stripped away by the appeals court decision.

The ongoing litigation was triggered by a lawsuit from the libertarian Goldwater Institute, which argued that the giant sales-tax giveaway violated the Arizona Constitution's "gift clause." That clause forbids tax dollars from going to private interests -- like, arguably, this project, which includes such wealthy backers as Michael Dell and the government of Abu Dhabi

In December, a three-judge panel in the Arizona Court of Appeals agreed with Goldwater that the massive subsidy, while ostensibly to pay for a parking garage used by public-transit riders, really was an unconstitutional gift to a private party. The city, and developer Klutznick, then appealed to the state Supreme Court.

The Supreme Court's decision today does not speak to the issues -- it only agrees to give the case a hearing and revisit the issues.

Clint Bolick, director of the Goldwater Institute's Scharf-Norton Center for Constitutional Litigation, says his team is ready to fight on.

"We're confident that the Arizona Supreme Court will give full meaning to the Constitution's gift clause and strike down this ill-conceived example of corporate welfare," he told New Times in an e-mail.

Regardless of what the court decides, there are some indications the project is in trouble. Nordstrom, the big kahuna that the city was desperate to land, has pulled out of the project. In this economy, that's no big surprise -- but it does throw CityNorth's second phase into question, regardless of what happens in court.

The Arizona Republic recently concluded that, based on sales figures from other shopping centers, the supposed $97 million tax giveaway is probably only worth about $62 million. That's still a pretty big kitty, but definitely less than originally promised... 

Keep Phoenix New Times Free... Since we started Phoenix New Times, it has been defined as the free, independent voice of Phoenix, and we would like to keep it that way. Offering our readers free access to incisive coverage of local news, food and culture. Producing stories on everything from political scandals to the hottest new bands, with gutsy reporting, stylish writing, and staffers who've won everything from the Society of Professional Journalists' Sigma Delta Chi feature-writing award to the Casey Medal for Meritorious Journalism. But with local journalism's existence under siege and advertising revenue setbacks having a larger impact, it is important now more than ever for us to rally support behind funding our local journalism. You can help by participating in our "I Support" membership program, allowing us to keep covering Phoenix with no paywalls.

We use cookies to collect and analyze information on site performance and usage, and to enhance and customize content and advertisements. By clicking 'X' or continuing to use the site, you agree to allow cookies to be placed. To find out more, visit our cookies policy and our privacy policy.


Join the New Times community and help support independent local journalism in Phoenix.


Join the New Times community and help support independent local journalism in Phoenix.