The Goldwater Institute thinks it may have a better chance to block the incentive agreement between Phoenix and the CityNorth development in the Arizona Court of Appeals.
"A lot of the applicable law was developed in the Court of Appeals," said Clint Bolick, attorney for the institute. "Trial judges often are reluctant to strike down laws."
Bolick was the losing attorney in the trial phase of the case, which challenged the $97.4million incentive agreement on grounds that it violated several clauses of the state Constitution.
City officials pointed out that such arrangements are specifically authorized - or at least were, before the state Legislature banned the practice in 2007 - by state law.
Bolick said that although trial court Judge Robert Miles penned a ruling that appeared to turn down each of his arguments, he agreed on at least one key factor: That the plaintiffs who the Goldwater Institute lined up for the suit did in fact have legal standing, or the right to participate in the action.
Otherwise, he said, "he gave a number of our claims short shrift," Bolick said.
Bolick said he hopes for quick action once he files his appeal.
He said the judges should be generally aware of the case. In addition, he said, financial decisions hinge on their decision, making a quick judgment more likely.
Indeed, CityNorth's developers already have delayed Phase2 of the project, citing in part the uncertainty created by the lawsuit.
Phase 1, a several blocks-long street of shops and restaurants, is scheduled to open on time next fall.
On the other side of the case, David Krietor, deputy city manager who was involved in drafting the agreement, said the city was "100 percent confident" that the agreement followed the law.
"It did not leave much room for dispute," he said.
Lisa Hauser, attorney for CityNorth, said the Goldwater Institute wants a ruling that will change the case law established by the Supreme Court on the actual gift clause, but "this does not appear to be the right way to do it."
"We had a strong case," she said.