26 February 2019

Barney Bristles AZ State Attorney General Brnovich Over ASU Regents Land Deal Lawsuit

It didn't take too long for the Times Media Group's East Valley Tribune to ask Denny Barney, the new President and CEO as of February 1 2019 for the East Valley Partnership, to be a Tribune Guest Writer for The Sunday Edition 24 Feb.
Barney starts off with "Few would disagree. . . " in the first paragraph to "If we can agree that business and education are good . . . " in the second paragraph "then it's no stretch to consider attempts to stifle these efforts as, well, bad."
So far nobody has agreed on anything in his circular diatribe.
Any reasonable person might question his lines of reasoning about what he calls "business and education" but he doesn't bring up what last Sunday's guest writing is all about - a lawsuit against the ASU Board of Regents by Arizona General Mark Brnowich that Barney characterizes as "a step in the wrong direction" and "a position that stands against what the vast majority of Arizonans would view as the way our government should be operating." 
Both are questionable assertions.
Let's step back for a second and see how ASU wanted to stifle any legal action when this question is asked:
Can Brnovich sue ASU?
. . . and who's trying to stifle whom when ASU requires consent to them?
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Blogger Note: Ethics Rules and State Laws
"In a letter sent today to the Arizona Board of Regents, the Attorney General’s Office outlined its legal rationale that allows them to move forward with the lawsuit, despite the State Bar’s ethics rules that require written consent from ASU and the Board of Regents in order to sue them.
“The governing ethical rules and Arizona case law both make it clear that the Attorney General’s Office is not treated the same as a private law firm for purposes of imputing conflicts,” Angela Paton, ethics counsel for the Attorney General’s Office, said in her letter. “[W]hen the Attorney General has statutory authority to sue a state agency, it may do so even if the state agency is otherwise a client.”
. . . Among the state agencies exempted from using the attorney general is the Arizona Board of Regents. . ."
You can view the original documentation in https://www.azmirror.com/blog/can-brnovich-sue-asu/ that was published on 11 Jan 2019.
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What's all this "double-talk" and "double-dealing" from Barney all about in his Guest Writer column where he also states that he's spent most of his career in business and as a "champion for economic development" around Maricopa County.
Here we have it: estimates of how public universities can contribute to the local economy where "universities are among other things a place to convene capable and innovative people to work on and solve the problems facing our society . . . " and in this case - the Attorney General's lawsuit over land-lease deals in ASU's Tempe Campus to build a hotel, it's about what Barney calls "much-needed revenue" and it's a Win-Win.
"It's a model to be emulated" by public-private partnerships [the P3-ers].
He goes on to cite The Novus Innovation Corridor, "a remarkable project underway in Tempe and enabled by ASU P3s".  Barney goes on to state that "During the buildup, economists predict the creation of 22,000 jobs, and over $3B in economic impact for the Metro Phoenix Metropolitan Area." - and - "Once complete , estimates indicate that Novus will generate $4.5B of ongoing, annual economic activity and more than 34,000 jobs."
A Judge will decide whether this lawsuit has merit. But there's a bigger issue at stake . . .
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3 days before Barney's Guest Writer column there was report appearing in Heartland that's more clear-headed over details:
Arizona AG Sues State University Over Real Estate Deals
February 21, 2019 By Bonner R. Cohen, Kenneth Artz
Arizona State University land deals allow commercial developments to benefit from tax exemption 
(The author Bonner R. Cohen, Ph.D. (bcohen@nationalcenter.org) is a senior fellow at the National Center for Public Policy Research.)
Arizona Attorney General Mark Brnovich filed a lawsuit against the Arizona Board of Regents (ABOR) to stop Arizona State University (ASU) from entering into land deals that allow commercial developments to benefit from educational institutions’ property tax exemption.
Two recent transactions—one completed, the other proposed—brought matters to a head. 
> In one deal, ASU rented out some of its property for a massive State Farm Insurance campus.  State Farm pays rent to ASU but enjoys the university’s property tax exemption because ASU retains ownership of the land.
>A similar deal is in the works for a proposed 330-room Omni Hotel with a 30,000-square-foot conference center. As with State Farm, Omni’s development would be exempt from property taxes.
The lawsuit filed in Arizona Tax Court on January 10 alleges ABOR lacks the legal authority to approve the ASU land deals allowing private companies to avoid paying taxes.
ASU's ‘Straw Man Role’
“ASU is a public university, not a commercial enterprise or an urban development authority,” says the lawsuit. “It is inappropriate for this educational institution to pick winners and losers in the highly competitive property development industry by negotiating for the use of ABOR’s tax shielding status.”
A Real Legal Question’
The authority of ABOR to abate taxes on commercial developments through these deals is  questionable, says Sean McCarthy, a senior research analyst with the Arizona Tax Research Association.
“We’re in strong agreement with the AG that there is a real legal question as to whether the universities have the authority to abate taxes in this matter,” said McCarthy.
“We look forward to a quick resolution to this matter in the courts,” McCarthy said.

 

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