PHOENIX (CN) — The Goldwater Institute claims the Phoenix suburb of Peoria is unconstitutionally giving away $2.5 million in tax money to benefit a private Christian university, and giving it three years of virtual veto power over bringing in any competing colleges.
Peoria, pop. 160,000, pledged to give up to $1.875 million to Huntington University without any benefit to residents, such as lower tuition or admission preference, the Goldwater Institute says in its Oct. 12 lawsuit in Maricopa County Court. It promised another $738,000 to Arrowhead Equities, a real estate investment firm that will develop property to lease to Huntington.
On top of that, the complaint states: "the Huntington Agreement gives Huntington a right to review any universities the City pursues and recruits to locate in Peoria through the end of year three of the Huntington Agreement, and the City promises to refrain from engaging with, and/or financially supporting, any other universities that would compete with Huntington."
The Goldwater Institute, named for the late Arizona senator, was established in 1988 to promote Goldwater's conservative and libertarian beliefs. It added a litigation department in 2007, which primarily sues governmental entities.
Huntington University, in northeast Indiana, is affiliated with the Church of the United Brethren in Christ. It has enrollment of 1,273 students and yearly tuition and fees of $25,400, according to U.S. News and World Report. Room and board costs another $8,456. Its mission statement says: "Huntington University is a private, four-year, Christ-centered institution committed to developing the 'whole person' by assisting students to understand all areas of human knowledge from the perspective of a Christian worldview."
Suing on behalf of three Peoria residents, the Institute says the gift clause of the Arizona Constitution prohibits cities from gifting tax money without a "public purpose."
The Peoria City Council in July 2015 authorized the city manager to approve an agreement with Huntington University to develop a branch in Peoria.
Under the agreement, Peoria will pay Huntington "up to $1.875 million for completing each of three performance thresholds." The thresholds are enrolling 100 students in a Digital Media Arts program, accepting 100 students for the 2016-2017 school year, and enrolling 150 students for the 2018-2019 academic year.
But the gifts of money "are not tethered to any of the three performance thresholds," and the college "is already behind on upholding its end of the bargain," according to the lawsuit.
"Peoria is paying a business simply to do what it would do anyway. The taxpayers get nothing in return for their money," Goldwater Institute attorney Christina Sandefur said in a statement.
"Just as it would be wrong for the government to give taxpayer money to Starbucks to serve coffee, or to McDonald's to sell hamburgers, it's wrong — and illegal — to give money to Huntington to open a campus and offer classes."
In May, the City Council unanimously approved an amendment to the agreement, giving the college 90 more days to meet its first threshold, and an additional semester each to meet its second and third thresholds. Classes at Huntington's Arizona Center for Digital Media Arts began in August.
The Institute seeks declaratory judgment that the agreement is unconstitutional, and an injunction to stop it.
Peoria hasn't yet seen the complaint, acccording to acting City Attorney Steve Burg.
"Once we receive a copy of the complaint, we will review it," Burg said in a statement. "At that point we intend to defend fully the legality of the agreements that are being challenged."
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