AG Says Arizona State University Sweetened Hotel Deal by $28M; School Says It's No Gift
Arizona Attorney General Mark Brnovich launched yet another salvo against the Arizona Board of Regents and Arizona State University late Wednesday night with an amended civil complaint claiming that ASU violated the Arizona Constitution's ban on gifts by promising $28 million up front to Omni Hotels as part of a lucrative deal to build a four-star hotel and conference center on prime university land in Tempe.
The new complaint adds fresh accusations of wrongdoing to a lawsuit that the AG's office filed in January, which said ASU and the board of regents had broken state law by improperly allowing Omni to shield itself from $21 million in property taxes that otherwise would have gone to support community colleges and K-12 schools.
Brnovich alleges that the deal effectively amounts to the sale of the 1.6 acres at the southeast corner of University Drive and Mill Avenue for an amount far below fair market value. ASU agreed to pay as much as $19.5 million toward the cost of the center's construction, and to build a $30 million, 1,200-space parking lot, with 275 spaces set aside for Omni as an "incentive." These 275 spaces are valued at $8.5 million.
Omni will lease the land from ASU at a "pre-paid rent" of $85 per square foot," or approximately $5.9 million, with an added $1.09 million per year in "additional rent" to ASU for the duration of the 60-year lease. Omni will retain the option to purchase the hotel and convention center, as well as the land its on land and any improvements, for a token $10.
Read more: https://www.phoenixnewtimes.com/news/brnovich-claims-asu-sweetened-omni-deal-with-28m-gift-11264416
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