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Rodgers v. Huckelberry

Court of Appeals of Arizona, Second Division

December 14, 2017

Richard Rodgers, Shelby Manguson-Hawkins, and David Preston, Plaintiffs/Appellees,
v.
Charles H. Huckelberry, in his official capacity as County Administrator of Pima County; Sharon Bronson, Ray Carroll, Richard Elias, Allyson Miller, and Ramón Valadez, in their official capacities as members of the Pima County Board of Supervisors; and Pima County, a political subdivision of the State of Arizona, Defendants/Appellants.

         Appeal from the Superior Court in Pima County No. C20161761 The Honorable Catherine Woods, Judge

          Scharf-Norton Center for Constitutional Litigation at the Goldwater Institute, Phoenix By James Manley and Veronica Thorson Counsel for Plaintiffs/Appellees

          Barbara LaWall, Pima County Attorney By Regina L. Nassen and Andrew L. Flagg, Deputy County Attorneys, Tucson Counsel for Defendants/Appellants

          Chief Judge Eckerstrom authored the opinion of the Court, in which Presiding Judge Vásquez and Judge Eppich concurred.

          OPINION

          ECKERSTROM, Chief Judge

         ¶1 Pima County Administrator Charles Huckelberry, Pima County, and the members of the Pima County Board of Supervisors (collectively, "the County") appeal from the trial court's grant of summary judgment directing them to cancel the county's lease-purchase agreement with World View Enterprises for failure to comply with competitive bidding procedures. See A.R.S. § 11-256(B)-(D). The sole issue before this court is whether § 11-256 requires a county board of supervisors to comply with the competitive bidding process when it leases property pursuant to its economic development authority under A.R.S. § 11-254.04. For the following reasons, we determine competitive bidding is not required. Accordingly, we reverse the judgment of the trial court and remand with instructions to enter summary judgment in favor of the County.

         Factual and Procedural Background

         ¶2 The facts are not in dispute. In January 2016, the County entered a twenty-year lease-purchase agreement ("the Agreement"), in which the County would construct a 135, 000 square-foot facility on twelve acres of county-owned land to accommodate World View's near-space-exploration operations. The County also agreed to construct a publicly available launch pad on an adjacent parcel that World View agreed to operate and maintain. World View promised to employ specific numbers of employees at defined benchmarks and at certain salary levels. In entering the Agreement, the County did not follow the competitive bidding process, normally required when a county leases property. See § 11-256(B)-(D). Instead, the County relied on its economic development authority to directly negotiate and contract with World View. See § 11-254.04.

         ¶3 In April 2016, three Pima County resident-taxpayers, Richard Rogers, Shelby Manguson-Hawkins, and David Preston (collectively, "Taxpayers"), initiated this action, seeking declaratory and injunctive relief. Taxpayers complained the Agreement was invalid for failure to follow the competitive bidding process and sought to enjoin the County from enforcing or performing under the Agreement.[1] On that issue, the parties filed motions for partial summary judgment. The trial court concluded §§ 11-254.04 and 11-256 could be harmonized "without rendering any provision of either statute meaningless" and determined that "when the legislature authorized counties to enter leases . . . for purposes of economic development, " it intended the competitive bidding process to apply. The court entered judgment in favor of Taxpayers pursuant to Rule 54(b), Ariz. R. Civ. P. The County timely appealed and we have jurisdiction. A.R.S. §§ 12-120.21(A)(1), 12-2101(A)(1).

         Statutory Construction

         ¶4 The sole issue before this court is whether § 11-256 requires the County to employ competitive bidding when it leases property pursuant to its economic development authority under § 11-254.04. We review both summary judgment and statutory construction de novo. Delgado v. Manor Care of Tucson AZ, LLC, 242 Ariz. 309, ¶ 10 (2017). "We interpret statutes to give effect to the legislature's intent. When a statute is clear and unambiguous, we apply its plain language and need not engage in any other means of statutory interpretation." Kent K. v. Bobby M., 210 Ariz. 279, ¶ 14 (2005).

         ¶5 A county board of supervisors only possesses those powers "expressly conferred or expressly implied by statute." Davis v. Hidden, 124 Ariz. 546, 548 (App. 1979). Section 11-254.04 specifically authorizes boards to "appropriate and spend public monies for and in connection with economic development activities." It defines these activities as "any project, assistance, [or] undertaking . . . including acquisition, improvement, leasing or conveyance of real or personal property." § 11-254.04(C). The statute requires that the board "f [i]nd and determine[]" the activity "will assist in the creation or retention of jobs or will otherwise improve or enhance the economic welfare of the inhabitants of the county." Id. In practical terms, the statute's plain language - authorizing spending in the context of lease transactions- grants counties the power to lease county-owned property at less than market value, inasmuch as a discounted lease is equivalent to spending public monies by subsidizing a portion of a tenant's rent.[2]See Subsidy, Black's Law Dictionary (10th ed. 2014) ("below-market prices" a form of government spending).

         ¶6 By its own terms, § 11-254.04 contains no competitive bidding requirement. To the contrary, competitive bidding directly opposes its language and the purpose conveyed thereby: to empower counties to negotiate directly with specific lessees and create deals favorable to those entities. That a county may spend monies upon determining the lease "will assist in the creation or retention of jobs, " necessarily contemplates that a board may do so by offering a favorable lease to a particular employer. § 11-254.04(C). To require competitive bidding in such a circumstance would only frustrate that purpose by driving up the price and thereby nullifying the very power the statute grants: the power to spend monies for economic development.

         ¶7 Likewise, although a board might pursue generalized job creation, ยง 11-254.04 grants the same board the power to "assist in the creation . . . of jobs" by directly negotiating with private employers "on any project" to incentivize them to locate within the county by offering a below-market lease. Again, competitive bidding would substantially frustrate the board's ability to provide such assistance by introducing the risk that another bidder ...


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