The victors in the CityNorth subsidy lawsuit are seeking reimbursement for their legal costs.
The Thomas J. Klutznick Co., developer of the CityNorth project, and the city of Phoenix each filed claims Wednesday in Maricopa County Superior Court. The claims ask Judge Robert Miles, who decided the case earlier this month in their favor, to require the Goldwater Institute to pay $381,000 to the Klutznick Co. and $304,000 to the city.
The Goldwater Institute filed and lost a lawsuit challenging the subsidy agreement, in which the city agreed to reimburse half of the project's sales taxes up to a total of $97.4 million. Miles ruled the agreement is "undoubtedly" in the public interest.
Goldwater Institute filed an appeal of the decision to the Arizona Court of Appeals last week.
Clint Bolick, lawyer for the institute, denounced the claims.
"It's a ludicrous motion that is a waste of taxpayer money and the court's time," he said. "It is extraordinary well-established that governmental entities cannot recover attorney's fees against individuals who are litigating for the public interest."
Lisa Hauser, who represented the Klutznick Co., said the appeal, not the company's and city's claims, are to blame for "needlessly spent" taxpayer dollars.
"While we have the highest regard for public-interest litigation, we are asking for fees not just because the Goldwater Institute suffered a loss, but because of the way they handled this case," she said. "They brought a claim without substantial justification and knowing they would lose in the trial court. We are asking for fees as a sanction against this kind of conduct."
Goldwater argued that the incentive agreement violated at least three provisions of the Arizona Constitution, but city officials and Hauser argued that the agreement was crafted carefully to stay within the law.
No hearing has been scheduled either on the claim for fees or on the appeal. Bolick said he hoped the fee issue would be resolved quickly.
He said he especially was opposed to the Klutznick Co. receiving any fees.
"This developer entered the litigation voluntarily," he said. "For it to walk away with not only a subsidy but also fees would be a double injustice."
According to its developers, CityNorth is expected to generate $1.9 billion in annual economic activity and create 19,000 new jobs. Phase One will open on schedule this fall. Phase Two, which includes Arizona's first Bloomingdale's and the