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Arizona Supreme Court decision on gift clause could hinder cities' economic development deals

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Posted at 8:55 AM, Apr 08, 2021
and last updated 2021-04-08 11:55:01-04

PEORIA, AZ — An Arizona Supreme Court decision that the city of Peoria violated the state’s gift clause when courting a university could have wide-reaching effects on state municipalities' ability to do economic development deals, economic development leaders said in a panel discussion Tuesday.

The case, Schires v. Carlat, was decided in February, and hinged on the city agreeing to give $2.6 million in incentives to Huntington University and the university’s landlord to establish a satellite campus in Peoria. Out of that $2.6 million, $1.89 million would be paid over a three-year period as the university hit performance thresholds. The rest, about $737,569, would be reimbursed to the landlord for tenant improvements. The city of Peoria said the incentive would serve the public by diversifying the economic base and workforce and by revitalizing an underutilized area of the city.

The plaintiff, Darcie Schires, was represented by the libertarian think tank, the Goldwater Institute, which has sued other municipalities over incentives and other development strategies in the past.

Read the full article at Phoenix Business Journal.