AG Confirms Rio Nuevo Is Exempt from the Gift Clause

Senator Robert Worsley, Vice Chairman of the Senate Finance Committee, recently asked the Arizona Attorney General for an opinion on whether or not the Rio Nuevo Multi-Purpose Facilities District is exempt from the State’s gift clause. Previously the District’s attorney and the Pima County Superior Court had concluded that the District was exempt. Now Attorney General Mark Brnovich has agreed with those conclusions by opining that Rio Nuevo is exempt from Article 9, Section 7 of the Arizona constitution (commonly referred to as the “Gift Clause”).

This section of the state constitution prohibits most state governmental entities from subsidizing private entities. In February of 2011, the Rio Nuevo District was sued by two taxpayers claiming that the considerations given by the District to a private developer for the Thrifty Block in downtown Tucson violated the Gift Clause. The District disagreed and the Pima County Superior Court found that the District was indeed exempt from the Gift Clause. The Arizona Attorney General’s opinion now confirms that exemption.

“This gives us some flexibility in how we partner with private developers and organizations that are building within the District boundaries” said Fletcher McCusker, Chairman of Rio Nuevo. “Our standards, however, remain the same; we will only invest in projects that produce a return on a Rio Nuevo investment.

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