Goldwater Institute’s Suit Against the City of Phoenix—Update!

I’ve always been taught that if it walks like a duck and quacks like a duck, it’s really a giant hog in disguise that, if cooked properly, becomes a juicy steak to feed all of your hungry constituents . . . That is, if you’re a good politician. This time, this method of spin is being administered by a city government seeking to escape the confines of its own state constitution. Under-handed dealings and money-shuffling disguised as acts of public interest are oozing out of the budgetary offices in Phoenix, Arizona.

You may recall that I wrote a column on behalf of the Goldwater Institute in August, 2007 (Goldwater Institute Sues the City of Phoenix) that highlighted the Phoenix city government’s attempt to skirt Arizona constitutional law prohibiting the subsidizing of corporations by funding the Klutznick Company’s CityNorth mall project with $97.4 million from sales taxation on Phoenix residents. Consequently, the Goldwater Institute filed suit against Mayor Gordon on August 8^th, 2007 and the games began.

To remain safely within the constitutional bounds of past Arizona Supreme Court decisions, the City must prove it is purchasing a public good at a value equal to the monetary incentive. In return for the city’s “investment” in CityNorth’s development, the government will receive a 45-year exclusive lease on 200 carpool parking spaces in the mall’s parking garage. The city’s lawyer, Timothy Berg, argues that these spaces will be environmentally conscious and assist in diminishing traffic congestion. In other words, the city of Phoenix is more-or-less seeking to monetarily stake its interest in the CityNorth project with $97.4 of taxpayer funds and is using 200 parking spaces to protect the contract from legal challenges.

The Goldwater Institute recognizes the guise of the “common good” and investigated the alleged “value” the CityNorth arrangement would bring to Phoenix residents. Dr. Byron Schlomach reports in Deal Breaker: A Critique of the CityNorth Subsidy,

Approximately $10,822 per parking space, per year, to lease the 200 spaces at CityNorth. By comparison, the average market rate for a year’s lease of a parking space in Phoenix is $684.”

Arizona State University recently estimated that a new parking garage on their campus would cost $14,000 per space to construct. For that price, Phoenix could build and own 6,950 parking spaces for the same amount it paid to rent 200 at CityNorth.

Let’s call a spade a spade before citizens start to get sick off the duck they were told was a steak. As the Goldwater Institute so astutely asserts, “This deal isn’t about the public good. It’s a subsidy that very clearly violates Arizona’s constitution.”