Monday, January 25, 2010

Az Supreme Court Vacats Appeals Court Decision On CityNorth Subsidy

The Supreme Court of Arizona basically upheld the Superior Court's ruling on the Turken. vs. Gordon subsidy case, and vacated the Appeal's Court ruling.

The ramifications of the decision are still to be determined, by suffice to say, it was a loss for the small business owners and the people of Arizona, including, of course, those of us in Oro Valley.

In any case, in its 29 page decision, the court made it clear that their decision would only be applicable to transactions made after this ruling.

Please stay tuned to see a soon to be released press release from The Goldwater Institute.

Here is the link to the Supreme Court ruling.


Victorian Cowgirl said...

Well, my husband owes me $100. On Sunday, I commented...

"Isn't it interesting that both Oracle Crossing and OV Marketplace developers waited A YEAR after the town stopped making the tax-sharing payments before filing suit? Isn't it interesting that they didn't file the suits until 4 weeks before the decision (Oracle Crossing) and 1 week before the decision (Vestar)?"

"I'll bet you $100 that they already KNOW the outcome and they KNOW it's in THEIR favor (probably because they bought the votes) and that's why they waited this long to file suit."

The timing is too suspicious to me.

artmarth said...

Cowgirl--- I think you're just a drop too suspicious.

I can tell you for sure that as of about 5:00PM on Fri Jan 22 The Goldwater Institute was NOT privy to the court's decision.

While I'm sure the local developers here that received their subsidies are thrilled with the decision, I don't believe they knew more that the rest of us until after 10:00AM this morning.

AZCactus1 said...

It appears that in the long run, the decision was a solid WIN for small businesses and taxpayers alike. In the future, local governments must satisfy a two-pronged test for a tax sharing agreement to be viable.

1) The agreement must provide a public benefit, and
2) The agreement must NOT constitute a tax subsidy.

The only issue here that is bad for Oro Valley taxpayers is that the decision is NOT retroactive, and only affects prospective agreements moving forward.

The Vestar deal arguably provides a public benefit, but it most certainly IS a tax subsidy, as the public will not receive a tangible benefit from the deal.

According to the ruling, Vestar CANNOT argue that the creation of jobs, etc. in OV resulting from the OV Marketplace constitutes a tangible benefit.

While the case is a losing situation for OV now, the decision is a WIN for future agreements!

Nombe Watanabe said...

If we pay Vestar and the Oracle Crossing folks the money they are owed from the escrow account, are the law suits dropped?

Who pays the lawyers for bring the suit (s)?


artmarth said...

Nombe--- As I noted on another post, the OV Council will discuss the issue this Wed night.

My thought is, there will be no law suits, and no lawyers fees we are obligated to pay. Based on the court's ruling, it appears the council will agree to pay the collected tax monies held in escrow.

That should end this situation.

We'll know more after the Exec Session Wed.

OV Objective Thinker said...

AZ Cactus,

"The Vestar deal arguably provides a public benefit, but it most certainly IS a tax subsidy, as the public will not receive a tangible benefit from the deal."

Do you not believe that the many thousands of dollars that are going to the Amphi School District and to Pima County in the form of property taxes are a tangible benefit?