Senior living company real estate partnerships with public universities in Arizona could be prohibited, at least as they currently are set up, if Attorney General Mark Brnovich prevails in a new lawsuit against the Arizona Board of Regents, which oversees the state’s public universities.
In the complaint, filed Thursday in Arizona Tax Court, Brnovich maintains that real estate projects such as Mirabella, a continuing care retirement community being developed on the Tempe campus of Arizona State University in a collaboration with the ASU Foundation and Pacific Retirement Services, are illegal.
In the Mirabella arrangement, the attorney general said in his legal action, the regents, through the university, will lease the land to Pacific Retirement Services, a private company; that company, in turn, will pay the university but gain property tax-exempt status because the state will continue to own the land.
“ABOR’s mission is to run our state public universities, not extend government tax-exempt status to private corporations,” Brnovich said in a statement to McKnight’s Senior Living. “ASU is a public university, not a commercial enterprise or an urban development authority. As attorney general, my job is to be in the corner of hard-working Arizona taxpayers and to make sure everyone plays by the same rules.”
The lawsuit does not affect the Mirabella project or another one, an office and retail complex called Marina Heights, which already are underway, but the complaint mentions them as examples of projects that the attorney general thinks should be prohibited in the future, a spokeswoman for the attorney general’s office said. The lawsuit seeks to clarify ABOR’s rights, she said.
ASU has called the lawsuit “frivolous” and said it is a “huge waste of taxpayer money, time and energy, and it saps the public’s faith in our elected officials,” azcentral.com reported.
In a 2017 opinion piece posted on the website, ASU President Michael Crow said such projects do not take money away from the state because the land used for them never was on the tax rolls. Also, he said, such projects allow the university to generate revenue to make up for state funding cuts.
