Fighting the City of Tempe’s Unconstitutional Subsidies to Sea Life Aquarium

THE CITY OF TEMPE MADE A DEAL WITH THE DEVELOPER OF SEA LIFE AQUARIUM, AN AQUARIUM AT A LOCAL SHOPPING MALL, TO PROVIDE SEA LIFE WITH TAX SUBSIDIES AND CONCESSIONS.

The City of Tempe made a deal with the developer of Sea Life Aquarium, an aquarium at a local shopping mall, to provide Sea Life with tax subsidies and concessions. The subsidies and concessions violated the Arizona Constitution and state law, which prohibit “gifts” of public money to private interests.

The deal included rebates to the developer on all construction sales taxes up to $900,000; all retail taxes up to $78,000; rebates on planning, engineering, and building safety processing fees up to $70,000; and special assistance from the city on permitting, planning, and other regulatory hurdles required of other non-favored developers and business owners.

After the Goldwater Institute filed suit, the City of Tempe amended the agreement with Sea Life Aquarium. Sea Life agreed to give the City a guarantee that it would allow trips to Sea Life for Tempe students for a rate of $7 in exchange for the subsidies. But not all of the problems are solved and there are still many questions to be answered, such as how many student trips will take place or how many students will be on the trips.

On January 28, 2011, a judge ruled Tempe changed its development agreement to avoid an illegal subsidy to the Sea Life aquarium.