The Goldwater Institute filed a lawsuit against the City of Phoenix seeking to block a proposed sale of downtown city-owned land to Pennrose, LLC. The lawsuit alleges the deal violates the Arizona Constitution’s Gift Clause and a state law governing municipal housing requirements.
The complaint, filed May 26 in Maricopa County Superior Court, challenges the city’s proposed sale of public land located at 1016 North 2nd Street for approximately $1.5 million. The lawsuit alleges the sale price is less than one-third of the property’s fair market value and would benefit a private developer in violation of Article 9, Section 7 of the Arizona Constitution.
According to the complaint, Pennrose proposed what the lawsuit describes as “a blend of LGBTQ+ affirming affordable housing and a tuition-free preschool for under-resourced children,” with the preschool component to be offered by Bezos Academy. The Bezos Academy is a nonprofit organization founded by Jeff Bezos, founder of Amazon.com and owner of The Washington Post.
Court filings describe the property as consisting of three parcels totaling approximately 0.4 acres, or about 17,500 square feet. Goldwater attorneys allege the property was appraised at the direction of the city at approximately $4,812,500 in June 2023.
The Arizona Constitution requires government entities to receive a direct and proportionate return when they sell public assets. But Phoenix leaders are attempting to give Pennrose, LLC a massive discount on prime downtown real estate, agreeing to sell property worth at least…
— Goldwater Institute (@GoldwaterInst) June 1, 2026
The complaint states the city issued a Request for Proposals (RFP) in November 2023 seeking proposals for the purchase and development of the property. According to the lawsuit, the RFP set the minimum purchase price at $4,812,500, the property’s appraised value, while allowing proposers to offer a combination of cash payment and other purported public benefits to meet or exceed that amount.
Pennrose submitted a proposal in January 2024 to acquire and develop the property, according to the complaint. Goldwater attorneys allege the developer proposed purchasing the land for approximately $1.5 million and acknowledged, according to the complaint, that the proposed purchase price represented more than a $3.3 million discount below the RFP’s minimum purchase price.
City records show the Phoenix City Council approved Ordinance S-51809 on April 9, 2025, authorizing the sale and redevelopment agreement for the property, and later adopted Ordinance S-52672 on March 4, 2026, approving an amendment to the development agreement with Pennrose modifying the purchase price.
In a statement released June 1, Tony Napolitano, Senior Attorney at the Goldwater Institute, wrote, “Pennrose claims that the development will create public benefits worth more than the massive subsidy. But there’s a major problem: no valuable public benefit is identified, much less required, in the final agreement. In fact, the developer suggests the city should consider Pennrose’s own private gains from the project as public benefits. That theory turns the Arizona Constitution on its head.”
The lawsuit argues the proposed transaction would provide a subsidy to a private developer without the city receiving direct and proportionate consideration in return, as required under the Arizona Constitution’s Gift Clause.
Goldwater also alleges Phoenix imposed an unlawful inclusionary housing requirement on the sale and development of the property. The complaint argues the city violated A.R.S. § 9-461.16, which restricts municipalities from requiring residential units to be designated for sale or lease to particular classes of residents as a condition of development approval.
Napolitano explained, “Pennrose initially proposed building a mixed-use development on the site, which would include low-income housing and a tuition-free preschool provided by a nonprofit. While the inclusion of a private nonprofit would not remedy the Gift Clause deficiency, it’s not even relevant because it was not included in the final terms of the deal.”
“That leaves the sole remaining alleged public benefit Pennrose claims: the residual value of the housing project once the agreement expires,” he continued. “However, the city retains no ownership interest in the property, and taxpayers will never receive any of their money back from the developer. Those assets remain with the private special interest—exactly what the Gift Clause was designed to prevent.”
The lawsuit asks the court to declare that the proposed sale violates the Gift Clause, block the city from completing the transaction or conveying the property, declare the inclusionary housing requirement unlawful, and enjoin the city from enforcing such a requirement as a condition of development approval.
“Simply put, Arizona law does not give way just because city officials find a particular project desirable.
“Public property belongs to the public. When government officials transfer millions of dollars in public value to a private developer, the Arizona Constitution requires a genuine public purpose and a proportionate exchange—not deep discounts justified by speculative or illusory benefits that taxpayers will never see.”
AZ Free News did not locate a public response from the City of Phoenix regarding the lawsuit prior to publication.
Editor’s Note: Following publication, a representative for Bezos Academy contacted AZ Free News and said that Bezos Academy does not plan to open a location at the proposed Pennrose development in Phoenix.
Gov. Katie Hobbs’ overruled housing moratorium could leave taxpayers on the hook for more than $1 billion in compensation to builders.
The housing moratorium was a result of the Arizona Department of Water Resources’ (ADWR) indefinite suspension of developer certificates throughout the Valley based on new groundwater regulations imposed under Hobbs in 2024.
For decades, state law required developers to prove 100 years of assured water supply for their developments. Once Hobbs took office, ADWR imposed new regulations that expanded developers’ duty to prove assured water supply beyond their development into the surrounding water management area.
The Home Builders Association of Central Arizona (HBACA) sued ADWR over the regulations last January, represented by the Goldwater Institute. Last month, the Maricopa County Superior Court sided with HBACA and struck down the moratorium. Judge Scott Blaney found that ADWR violated Arizona law on the extent of its powers and on agency rulemaking.
ADWR plans to appeal the ruling.
A former ADWR director and one of the leading policymakers behind the legacy rule on assured water supply (the 1980 Groundwater Management Act) spoke out against the superior court ruling.
Kathleen Ferris, now an Arizona State University (ASU) senior research fellow with the Kyl Center for Water Policy, told KJZZ last month that ADWR was justified in its rulemaking because it had discovered that Phoenix-area groundwater was more interconnected than understood previously.
Whether that court ruling will stand on appeal or no, taxpayers will likely be on the hook for hundreds of millions — perhaps over a billion — in builder compensation claims filed under the Private Property Rights Protection Act, enacted under Proposition 207.
Prop 207 entitles property owners to just compensation for any land use laws’ impact on the use, division, sale, or possession of their property that reduces its fair market value.
One such Prop 207 claim is already underway.
Last September, developers Buckeye Tartesso and Buckeye Tartesso II filed a claim demanding over $320 million in compensation for lost value due to the ADWR rule. That figure, however, reflected only a low estimate which the developers felt they could accept as a settlement.
“[This figure] incorporates a number of conservative assumptions, and the [developers] expect that actual, proven damages would be significantly higher,” read the demand letter. “This demand is an offer of settlement, in the nature of a compromise, and the [developers] reserve the right to seek additional or different damages if litigation is necessary.”
ADWR prevented the developers from obtaining a certificate of assured water source for the Tartesso development in the city of Buckeye, which spanned over 12,800 acres. As a consequence, they were prohibited from subdividing or selling lots on that property.
The Goldwater Institute filed the claim on behalf of the developers.
Should all builders file similar claims, taxpayers could be on the hook for over $1 billion in compensation payments at a time when the state is already struggling with budget woes.
Gov. Hobbs inherited a budget surplus of over $2.5 billion from her predecessor, Republican governor Doug Ducey. After two years in office, the budget plunged to a $1.4 billion deficit: a near-180 on the state’s fiscal health.
The latest figures reflect a slightly better status, though still nowhere near in the black: a deficit of over $300 million, according to Rep. David Schweikert (R-AZ-06).
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The Goldwater Institute has called on Arizona’s largest school district to immediately repeal a policy that prohibits “personal attacks” on school board members, staff, students, or members of the public during public comment periods, arguing the rule unconstitutionally silences criticism while allowing praise.
In a formal letter sent to Mesa Public Schools Governing Board President Courtney Davis, the Goldwater Institute contends the policy constitutes blatant viewpoint discrimination in violation of the First Amendment and the Arizona Constitution.
The Mesa Public Schools Governing Board adopted this policy in July 2024, banning any “personal attacks” during the public comment portion of board meetings. According to the Goldwater Institute, the rule effectively permits speakers to praise or thank board members, administrators, and teachers by name, but forbids any negative, critical, or challenging comments directed at the same individual—no matter how factual or civil the critique may be.
“This prohibition punishes a specific viewpoint insofar as it prohibits ‘attacks,’” the letter states. “It is not, then, the speaking about Board members, staff, students, or members of the public in general that the Governing Board is preventing, but only speech about those groups from a certain viewpoint. That is unconstitutional.”
Adam Shelton, an attorney for the Goldwater Institute, who wrote the letter, told The Center Square, “The Supreme Court has consistently held that viewpoint discrimination is almost always unconstitutional.”
The Goldwater Institute became involved after concerned Mesa parents contacted the organization, requesting a review of the policy. Shelton noted that the board reads the restriction aloud before every public comment session.
“The policy has chilled the speech of some of the parents,” Shelton added. “They’re afraid to speak out and bring problems before the school board. These parents are concerned about being banned or punished for making negative comments about school board officials.”
Public comment periods at school board meetings serve as a vital democratic function, allowing parents and community members to bring forward issues, including complaints about teachers, policies, or administrative decisions. The Goldwater Institute argues that Mesa’s policy undermines this purpose by making it nearly impossible to discuss real problems without naming those responsible.
Federal courts have repeatedly struck down similar policies. In Ison v. Madison Local School District Board of Education, the Sixth Circuit invalidated a rule banning “antagonistic” or “abusive” speech personally directed at board members as impermissible viewpoint discrimination. More recently, in Moms for Liberty – Brevard County, FL v. Brevard Public Schools, the Eleventh Circuit ruled against a prohibition on “abusive” comments, noting that such policies effectively require “happy-talk”—allowing positive comments while suppressing negative or challenging ones.
The Eleventh Circuit emphasized that restricting “personally directed” speech obstructs the core purpose of school board meetings: educating officials and the community about legitimate concerns. The court observed that a parent complaining about a math teacher’s instructional methods would struggle to explain the issue without referencing the teacher.
The Goldwater Institute warned that maintaining the policy exposes the district to potentially costly litigation. Following its victory in the Brevard case, Moms for Liberty secured a settlement requiring the Florida school district to pay nearly $600,000 in attorney fees, costs, and expenses.
In addition to federal constitutional concerns, the letter highlights that the policy likely violates Article II, Section 6 of the Arizona Constitution, which provides even broader protections for free speech than the First Amendment.
The Goldwater Institute has requested that the Mesa Public Schools Governing Board promptly amend its policy by removing the prohibition on “personal attacks.” The organization expressed willingness to work cooperatively with the board to bring the rules into compliance with constitutional standards and noted that all options remain under consideration if the policy is not revised.
No response has been received from the Board President, Courtney Davis, or the governing board as of the time of publication.
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
Arizona’s off-cycle elections draw significantly lower voter turnout than general elections while deciding billions of dollars in public spending, according to a new report from the Goldwater Institute.
The report, titled “Off-Cycle Voting in Arizona: Economic and Democratic Costs?”, was authored by Henry Thomson, an associate professor at Arizona State University. It analyzes municipal and school district elections held outside of regularly scheduled general election cycles.
A 2018 state law sought to require that most Arizona elections, except special and recall contests, be held alongside regularly scheduled general elections. However, the City of Tucson challenged the law, prompting a legal dispute over whether the state can mandate election timing for charter cities. In 2020, the Arizona Supreme Court ruled that charter cities have constitutional authority over local election matters and that state law cannot override those provisions unless the issue is one of statewide concern.
According to the report, voter turnout in recent off-cycle municipal elections in Arizona averaged 26.9%, which the analysis states is more than 44 percentage points lower than turnout in comparable on-cycle elections. The report attributes this difference to the timing of elections held outside traditional November general election dates.
Real-world examples underscore the disparity. In Phoenix, a 2023 bond election authorizing hundreds of millions in spending drew just 22% turnout, compared to 77% turnout in the city’s 2024 general election.
Similar gaps exist across Arizona cities and school districts, where…
The report further states that the composition of the electorate in off-cycle elections differs from that of general elections. It describes off-cycle voters as, on average, older and wealthier, and more likely to have a direct financial interest in government spending decisions.
Thomson writes that these differences in turnout and voter composition may influence policy outcomes. The report states that policies adopted through off-cycle elections may reflect the preferences of a smaller subset of voters rather than the broader electorate.
The report also highlights the scale of fiscal measures decided through off-cycle elections. In November 2023, $4.36 billion in school district spending measures were placed on ballots in Maricopa County, an amount it compares to the county’s annual budget of approximately $4.35 billion.
Examples cited in a Tuesday press release from the Goldwater Institute included a regional transportation plan approved by voters in Pima County in 2026, authorizing approximately $2.67 billion in spending, with less than one-third of registered voters participating, as well as a 2023 Phoenix bond election with a turnout of approximately 22% that authorized hundreds of millions of dollars in spending.
The report argues that the timing of elections is a policy choice made by local governments and may affect participation levels. It states that holding elections outside of general election cycles can result in lower turnout.
“Off-cycle elections convert community decision-making into a procedural rubber stamp, providing a democratic varnish of approval to policies pushed by special interests that benefit from growing local governments and ballooning municipal budgets,” Thomson wrote in the report. “They allow a small, unrepresentative electorate to decide enormous public spending commitments at the local level and should be reformed.”
The report recommends aligning local elections with higher-turnout general election cycles as a potential reform. It states that such changes could increase participation and broaden the electorate involved in local fiscal decisions that impact taxpayers for decades.
Rep. Andy Biggs (R-AZ-05) introduced legislation this week to create stronger rules on court-ordered federal oversight of police.
The proposed bill is a direct response to the ongoing monitorship of the Maricopa County Sheriff’s Office (MCSO), which began well over a decade ago following racial profiling allegations under the administration of former Sheriff Joe Arpaio.
Biggs’ Monitor Accountability Act would further limit federal district courts’ discretion on monitor selection and duration.
The bill as written would limit monitors to five years of service, prohibit courts from reappointing the same monitors under the same court order, prohibit monitors from coming from the same law firm or employer, cap monitor compensation and encourage courts to require pro bono or reduced-cost work, require public comment on proposed monitors prior to court appointment, limit extensions of monitorship to those without substantial and sustained compliance, and require case reassignment to a different judge after six years.
Additionally, the Monitor Accountability Act would apply retroactively to monitorships older than six years. This would ensure Maricopa County — Biggs’ impetus for the bill — secures a new monitor and judge.
The costs associated with the monitorship have neared $350 million according to Biggs and the county, about a tenth of which has gone to the court-appointed monitor and his firm. Proponents of continued monitorship counter that the actual cost of the monitorship amounts closer to $60 million.
Biggs, who is running to unseat Gov. Katie Hobbs this November, released a statement claiming that the MCSO monitorship, among others, has become exploitative.
“The federal monitor’s continued existence in our county and propensity for moving the goalposts from his original charge only serves to exploit taxpayers and undermine the brave work of the men and women who serve our communities — and this is only one of dozens of similar arrangements across the country,” said Biggs. “It’s time for Congress to take back the reins from rogue judges and monitors who have exceeded appropriate bounds.”
Cochise County Sheriff Mark Dannels joined Biggs’ statement with support for the bill as a corrective measure to prevent further exploitation of the monitor system.
“We’ve seen this problem first-hand in Arizona: Maricopa County has been the victim of a rogue monitor for more than 13 years, costing taxpayers hundreds of millions of dollars and shifting resources away from keeping the community safe,” said Dannels.
The Maricopa County Board of Supervisors filed a motion to end the monitorship last December, and in February testified to a House Judiciary Committee hearing on their effort in court. Biggs led that subcommittee hearing.
The board has pleaded for relief from what it claims to be indefinite taxpayer spending to keep up with ever-moving goalposts.
The Goldwater Institute has also requested the court to publicize the invoices associated with MCSO’s monitorship.
“[T]he government should not be allowed to keep such information secret unless there’s good reason, and even then, they’re required to specify what those reasons are,” stated the organization’s vice president of legal affairs, Timothy Sandefur.
The Department of Justice, who initially filed the lawsuit under former President Barack Obama along with the ACLU, signaled support for an end to MCSO’s monitorship.
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