Lawyers for the Goldwater Institute, a conservative Phoenix think tank, and Tempe will appear before a judge next week to present preliminary information on the lawsuit the institute filed last week, which claims the city offered the developer of Sea Life Aquarium an illegal incentive.
Maricopa County Superior Court Judge Eileen Willett scheduled a hearing on an order to show cause for Wednesday at 10 a.m. The judge could set a trial date for the case at the Wednesday appearance.
The institute claimed the development agreement provides tax subsidies and concessions for Sea Life, a subsidiary of the UK-based Merlin Entertainments Group, that violate state law and the Arizona Constitution. Tempe offered the developer an estimated $218,000 retail-development tax-incentive that includes reimbursement of lease taxes and construction sales taxes and waivers on development fees.
Last year, the Arizona Court of Appeals declared a similar development agreement illegal which Phoenix offered to the developers of the CityNorth mall project. An appeal of that decision is pending before the Arizona Supreme Court. Phoenix had agreed to pay the CityNorth developer half of the sales taxes collected for 11 years, three months, or until the total reached $97.4 million.
Tempe City Attorney Andrew Ching said Monday that Tempe believes that the agreement does not violate the gift-clause of
the Arizona Constitution, which Goldwater claims it does. The gift clause of the Arizona Constitution generally prohibits governments from granting money or credit to private entities.
"We dispute that this is a gift-clause issue at all because there was a bargain for a benefit that the city received as part of the deal for reduced (aquarium) admission for Tempe school-aged children," he said. "It would also make sense to see how the (Supreme Court) rules in the CityNorth case hearing as well."
Ching said Tempe and the developer had yet to agree on the percentage of discount Tempe students would receive.
Phoenix also claimed in its unsuccessful argument to the state Court of Appeals that, in return for the incentive offered to the developer, the city would receive a parking garage built by the developer as part of the mall project.
On Tuesday, Sea Life executives will host a groundbreaking ceremony to celebrate the aquarium's June opening. The estimated $15 million project will open next to Sports Authority on the northeastern corner of the mall near Interstate 10 and Baseline Road. There are several Sea Life aquariums worldwide but the Tempe site is the second U.S. location. The aquarium is expected to employ about 50 people and estimated to draw 400,000 people to Tempe annually, increasing visitation to the city by approximately 10 percent, according to Tempe officials.