On Monday, Pima County Superior Court Judge Catherine Woods ruled against the County’s motion to dismiss a case brought by the Goldwater Institute in the matter of World View. Goldwater filed a lawsuit against Pima County over a multi-million-dollar sweetheart deal it made with the tourism balloon company.
In its suit, Goldwater alleged that the deal violated Arizona’s Gift Clause and violated procurement laws when the County entered into secret negotiations for a no bid contract. In the deal, the County agreed to and has begun building the company its 120,000-square-foot headquarters.
The attorneys representing Chuck Huckleberry and Pima County claimed that the deal did not violate the gift clause due to the fact that the deal between Pima County and World View satisfied two requirements: public purpose and adequate consideration.
The defense noted that for the requirements to be met, there does not need to be a direct public benefit derived from the project. In simple terms, the only benefit that needs to be provided is the opportunity for hiring and to a lesser extent perhaps a spike in tourism to the County as a whole.
According to the Goldwater Institute, the Arizona Constitution mandates that: “Neither the state, nor any county, city, town, municipality, or other subdivision of the state shall ever give or loan its credit in the aid to: or make any donation or grant, by subsidy or otherwise, to any individual, association, or corporation . . . . ” The Arizona Supreme Court has held that this provision prohibits governments from making public expenditures without receiving adequate consideration in return. Moreover, the Supreme Court has held that “indirect benefits” are not consideration under the Gift Clause.
After the deliberation process and closing arguments, the Judge Catherine Woods denied three of four requests to dismiss the case with the fourth to go under advisement. As a result of the judge’s ruling, the case will be heard by the Pima County courts.