A lawsuit that challenges Phoenix's $100 million incentive to lure the CityNorth development has the potential to reverberate across Arizona.
The public policy institute thats challenging Phoenix's deal said that Mesas $20 million proposed incentive to the Waveyard resort at Riverview also violates the states Constitution.
Clint Bolick, attorney for the Goldwater Institute, said his group would be willing to back Mesans who oppose the Waveyard development deal.
The details may differ, but both are in the category of corporate giveaways that we are trying to stop, Bolick said.
Backlash against city perks to large developers has produced anti-incentive legislation and the lawsuit by the Goldwater Institute.
The Goldwater Institute cites the state Constitutions gift clause, saying it preventing taxpayer dollars from aiding private developers.
Mesa has a history of city incentives that have produced controversy. The Mesa Riverview retail development attracted $80 million in city money and an unsuccessful fight to stop it.
More recently, Mesa has offered a $20 million tax rebate to Scottsdale-based Waveyard LLC, a deal that will go to the ballot in November. Voters will decide whether the city should pay to bring the adventurepark resort and retail complex to northwest Mesa.
City officials said the Goldwater lawsuit would have no direct impact on the Waveyard deal. As the case plays out in the courts, it could affect future development deals, but Waveyard could be built by the time the Goldwater Institute has a ruling on their legal challenge.
This is a specific challenge to a specific development agreement, said Debbie Spinner, Mesa city attorney. We are not a party in the suit.
The Goldwater Institute lawsuit is not the only challenge to government incentives.
State legislators last session passed a law that limits large cities from doling out lucrative incentives to private developers.
The Goldwater Institute followed up that sentiment when they filed a lawsuit claiming that the states Constitution already outlaws city incentives.
The lawsuit, backed by local businesses, states the CityNorth deal should be stopped.
However, its possible neither of the moves will interfere with Mesas proposal to lure Waveyard to the citys Riverview area.
Mesas voters in November are set to decide whether a $20 million incentive Mesa offered to the $250 million water park and adventure resort should be approved.
The state law creates an exemption for deals that were referred to a vote before July 1. The Mesa City Council sent the issue to the ballot in June.
The Goldwater Institutes lawsuit, meanwhile, is a test case that could set a broad legal precedent when a decision is made.