No BMX in Gilbert

The Gilbert Town Council has decided, for now, to not bring a BMX track and corporate headquarters to the San Tan neighborhoods of Gilbert, as reported by Parker Leavitt in his article titled "Gilbert Rejects BMX Park - For Now."  To read the entire article, click  HERE.

"Gilbert officials will not commit to building a $20 million BMX headquarters, Olympic training facility and public bike park at this time and will instead focus on other parks needs in south Gilbert.

"Amid concern from residents over traffic, noise and the project's price tag, Gilbert Mayor John Lewis said, 'The decision is not no, it's just not right now.'"

The town would fund construction of the facility and be reimbursed for the $3 million USA BMX corporate headquarters while receiving additional lease payments and tax revenue over a 30-year development term.

Officials touted the project's potential to help fill Gilbert hotel rooms and make the town, traditionally viewed as a bedroom community, more of a tourist destination.

Several items are missing from Parker's reporting, including some very serious issues brought up by many residents, including Mike Webb.  

Location, Location, Location.

The proposed BMX track and stadium are wholly incongruous with the character of the San Tan area's open space, farm fields, beautiful family homes, and peaceful atmosphere.  The BMX track would bring traffic, congestion, and noise to this area. 

In contrast to the Gilbert neighborhood proposed for the BMX track, it's important to note that the Black Canyon BMX facility in Phoenix that was visited by Mayor Lewis and Mike Webb is far from any residential neighborhood, as you can see in the following photo.      

$17 Million Taxpayer Subsidy

The Town had planned to fully subsidize this private enterprise with $17 million in taxpayer funds.  Residents stated that subsidizing a private business with taxpayer money is an inappropriate expenditure of public funds.  In fact, some stated that the Town's plan is unconstitutional.  In Turken v. Gordon, 223 Ariz. 342 (2010) (the CityNorth case), the Arizona Supreme Court expressly disapproved of this type of "gift" that the Town is prepared to convey to a private enterprise. 

Specifically, the Supreme Court noted that "When a public entity purchases something from a private entity, the most objective and reliable way to determine whether the private party has received a forbidden subsidy is to compare the public expenditure to what the government receives under the contract.  When government payment is grossly disproportionate to what is received in return, the payment violates the Gift Clause."  Based on what was presented by the Town at the April 8, 2014 meeting, the Town's proposed expenditure to a private business is "grossly disproportionate" to what the Town will receive in return.

Moreover, the Supreme Court explained that "indirect benefits, such as projected sales tax revenue" are not to be considered when evaluating the consideration that the Town will receive from the private business in return for the Town's expenditure (contrary to what the Town's consultant from Elliott Pollack attempted to assert following the public meeting).  Rather, the Court unequivocally stated that "although anticipated indirect benefits may well be relevant in evaluating whether spending serves a public purpose . . . such benefits are not consideration under contract law," and are not to be considered as the private entity's consideration for the Town's expenditure.  The Court concluded that "analysis of adequacy of consideration for Gift Clause purposes focuses instead on the objective fair market value of what the private party has promised to provide in return for the public entity's payment." 

"Indirect Benefits" Violates Arizona Constitution

The Town's expected "return" for its minimum $17 million investment consisted primarily of alleged "indirect benefits" such as assumed sales tax revenue and the purported prestige (or legacy) from hosting this facility.  Thus, as clearly explained by the Supreme Court in Turken, the Town's proposed gift to BMX USA violates the Arizona constitution, and if the Town were to proceed with its proposal, it will be inviting protracted litigation, which will cost the Town's residents even more in legal fees and costs.  

Private Corporate Headquarters build on land zoned for Parks?

Finally, it was the understanding from the meeting that the area under consideration near Greenfield and Germann roads is zoned for parks/public facility.  How is it that a private business's corporate headquarters can be housed in an area zoned for parks?  Is there an intention to amend the zoning of that area?

See Also:

Talkin' Turken:  Arizona's Economic Development Opportunities after CityNorth    

Supreme Court Resolves Key Issue in CityNorth Controversy: Indirect benefits do not constitute consideration for purposes of the Gift Clause, Arizona high court rules

Is Gilbert Really Serious about BMX? 

Gilbert Rejects BMX Park -- For Now

BMX USA Very Surprised by Town's Decision to Hold Off on Complex