The Arizona Board of Regents on Monday filed motions to dismiss a lawsuit from Attorney General Mark Brnovich that seeks to restrict ASU’s practice of leasing tax-exempt public land to private businesses.
The motions are the latest volleys in a bout between the primary governing body for the state's universities and Brnovich at a time when the University is trying to expand its dealings in commercial development.
Brnovich said in the January lawsuit that ASU’s practice of providing real estate deals and tax breaks to private businesses is “inappropriate” and that such businesses should pay property taxes. Property taxes are used to fund government services like public libraries and schools.
The lawsuit also asserts that the planned Omni Hotel that is to be constructed on University land on Mill Avenue and University Drive should pay property taxes.
The four motions that ABOR filed allege that Brnovich lacks the “statutory authority” to file the lawsuit and that his request for businesses on tax-exempt land to pay taxes is unlawful, among other charges.
ABOR chair Ron Shoopman called the lawsuit "senseless" and criticized Brnovich for suing his own client.
“This lawsuit wastes time and resources at the board and universities, and detracts us from the crucial work we do to serve the students and families of Arizona,” Shoopman said in the statement in which the board filed the motions.
Each of the motions cites a different criticism of the lawsuit, including allegations that the dispute is not for the court to solve and that the suit was filed before “administrative remedies” were exhausted.
The second motion argued that the Arizona Tax Court has set a "clear process" through which a property owner, or in some cases, the offices of the county assessor or the county treasurer can contest a property's classification for tax purposes.
As the property owner for University-leased land, any complaint regarding tax classification for property should have first gone through ABOR and then through the offices of the Maricopa County Assessor and Maricopa County Treasurer, all of which were targeted in Brnovich's lawsuit.
"The AG has attempted to turn that process on its head by suing the very people authorized to bring such an action — before they have acted or even had an opportunity to act," the motion said. "The AG’s decision to not allow the prescribed process to run its course is a mistake that deprives the Tax Court of subject matter jurisdiction and precludes this lawsuit from proceeding further."
But the attorney general’s office maintains that the lawsuit is necessary to protect Arizona taxpayers.
“No one should be surprised by ABOR’s predictable request to dismiss the lawsuit challenging their illegal property development agreement,” Katie Conner, spokesperson for the Arizona attorney general’s office, said in an email. “It appears ABOR would rather have a court toss out the lawsuit on technicalities than have an open and honest discussion about how they are allowing private companies to dodge paying their fair share of taxes."
ASU deferred comment to ABOR in regards to questions about the motions.