Scottsdale to CityNorth: Drop Dead!

Last month, the Arizona League of Cities and Towns defended the city of Phoenix's $97 million CityNorth subsidy -- going so far as to file an amicus brief asking the Arizona Supreme Court to overturn the appellate decision that struck down the subsidy as unconstitutional.

But last night, the city of Scottsdale made it clear that the League doesn't speak for all Arizona cities -- at Mayor Jim Lane's urging, the Scottsdale City Council voted to file a brief defending the appellate ruling.

That's something of a slap in the face to Phoenix, and, more than that, a clear repudiation of the League's actions. But it also makes sense: as Lane explained, Phoenix's subsidy to CityNorth was designed specifically to hurt a competing shopping center, One Scottsdale, just across the Scottsdale border.

"The city of Phoenix supplied a $100 million subsidy to CityNorth in view of competition they were receiving from the city of Scottsdale with DMB," Lane said. "It was an attempt to subsidize that project to move whatever high-end retailers that DMB was looking to receive there. But it's also the overall premise of whether or not these gifts are harmful in the overall marketplace. Certainly they're selective and favor certain developers and they unfairly reallocate the tax burden to the remaining taxpayers."

That's pretty much the argument the Goldwater Institute has made in its suit against the city of Phoenix. The libertarian think tank lost the suit in Maricopa County Superior Court but successfully appealed the verdict to the Arizona Court of Appeals. That's the ruling that Phoenix (and the the League of Cities and Towns) now hope to convince the Supreme Court to toss.In his remarks, Lane raised serious questions about how the League came to support the subsidy. He told the Council that the League decided to support Phoenix based on a phone call from the city.

"There was no discussion and no vote by its executive board or survey of its members," Lane said. "It did imply unanimous support by the cities. And then the paper was indicating that numerous cities have filed briefs in support of CityNorth when none have done so."

Councilman Ron McCullagh told Lane that he was concerned such a brief would send the wrong message.

"We've been trying to get [Phoenix's] cooperation for a tax revenue sharing thing on the 101 for ten years now," he said. "Here we are with nothing to gain on this but the appearance of an uncooperative neighbor. I don't even think we can influence this much. It seems like a loser."

Indeed, the decision was risky: City Attorney Deborah Robberson told the Council that Lane's recommendation to file an amicus brief was "distressing to other cities."

The Council vote was ultimately 4-3, with McCullagh, Wayne Ecton, and Suzanne Klapp voting "no." Scottsdale will only file the brief if the Arizona Supreme Court agrees to take the case -- a decision it will be announcing in the first week of June.