Tuesday, November 18, 2008

Goldwater Institute: CityNorth opening not grand for taxpayers

by Carrie Ann Sitren

Today is the Grand Opening of a development that took nearly $100 million from Phoenix taxpayers to be built. There, you are encouraged to "explore inspiring art galleries, refreshing landscaped parks and cascading fountains." You'll enjoy "entertainment in live-performance spaces . . . each step will be a journey of discovery."

But it's not a new art museum, park, or theater. In fact, the Children's Museum of Art, Phoenix Central Library, and even the 20-story City Hall building were all constructed for a fraction of the cost of this mammoth attraction. This tax beneficiary is a private, luxury shopping mall.

"CityNorth," located in north Phoenix, features "fashion-forward designer boutiques," and "bistro and sidewalk café's" - all, of course, to make a profit. Given today's economy, many taxpayers won't even be able to afford to shop at this high-end retail center. Why are they being forced to subsidize it?

The reason lies in city bidding wars. The city that offers the biggest payout gets to reap the sales taxes that big shopping centers bring in. Gilbert won a 17-dealer auto complex at a cost of $60 million, and the Scottsdale city council offered Wal-Mart and other big-box stores $36.7 million to build there.

Gilbert Mayor Steve Berman later regretted the handout, stating, "We shouldn't have taxpayer-funded turf wars between cities", and Scottsdale voters referred their city's subsidy to the ballot and stopped the deal.

In Phoenix, it will take a state court to reverse the flow of funds to CityNorth. The Arizona Court of Appeals will hear arguments by the Goldwater Institute on November 25 that the mall subsidy violates the Arizona Constitution's Gift Clause, Special Law Clause, and Equal Privileges and Immunities Clause.

With a price tag of nearly $100 million in taxpayer dollars, Phoenicians may not find this mall's opening grand at all.

Carrie Ann Sitren is an attorney with the Goldwater Institute Scharf-Norton Center for Constitutional Litigation.

1 comment:

Ciaoenrico said...

If CityNorth is successful, though, the tax revenues for Phoenix will be considerable. Everyone thinks that because times are hard now, that won't happen.

Look at the revenue Chandler sees from Chandler Fashion Mall. And that opened during the last economic downturn. When things came back, so did that mall, as well as the considerable tax revenues from it.