Scottsdale Princess Partnership v. Maricopa County
230 Ariz. 425
Ariz. Ct. App.2012Background
- Taxpayer appeals Maricopa County’s Class One designation for 2003–2005 while contending the Property qualifies for Class Nine under A.R.S. § 42-12009(A)(1)(b).
- Property includes a 651-room hotel with extensive meeting space on land leased from the City of Scottsdale and some land owned by Taxpayer; lease may revert to City at term end.
- Ground Lease from 1985 provides that improvements will become City property at lease termination.
- Property hosted numerous groups/conventions (Sigma Sigma Sigma National Convention, Dial Corporation National Sales Meeting, Destination Play Station Conference) during the relevant period.
- Tax court conducted a four-day bench trial after denying summary judgment, ultimately affirming Class One; Taxpayer appealed as an error correction matter under A.R.S. § 42-16251(3).
- Issue on appeal centers on whether “convention activities” under § 42-12009(A)(1)(b) can apply to a hotel and whether use is primarily for convention activities.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether property is used primarily for convention activities under § 42-12009(A)(1)(b) | Taxpayer: primary use is convention activities | County: use not primarily for convention activities | No; primary use not established under the statute |
| Whether evidence shows primary use despite definition | Taxpayer: records show two-thirds revenue from group conventions | County: records conflate convention with other group activities | No; records fail to isolate convention use as primary |
| Whether the court properly limited “convention activities” to core convention functions | Taxpayer: broader definitions should apply | County: conventional activities limited to core convention functions | Yes; court’s definition reasonably limited convention activities |
Key Cases Cited
- U-Stor Bell, L.L.C. v. Maricopa County, 204 Ariz. 79 (Ariz. App. 2002) (defines error standards for tax classifications and use designations)
- Hayden Partners Ltd. P’ship v. Maricopa County, 166 Ariz. 121 (App. 1990) (uses objective, functional standard for classification; not motivated by owner’s purpose)
- Pesqueira v. Pima County Assessor, 133 Ariz. 255 (App. 1982) (agricultural vs. commercial use; incidental uses not allowed in classification)
- Kilpatrick v. Superior Court, 105 Ariz. 413 (1969) (plain meaning of words governs unless context shows otherwise)
- United Physicians, Inc. v. Pima County, 206 Ariz. 63 (App. 2003) (economic use and primary use must be determined by objective evidence)