The Camp Verde Town Council canceled its longstanding lease with the Camp Verde Area Association to run the Camp Verde Equestrian Center on Dec. 3. On social media, the CVAA stated that the nonprofit leased “the dirt,” and “CVAA [members] do all the work, self-fund it, maintain it [and] we do this for the town for free, in exchange the town gets tax revenue every year.”
While that argument is correct — in part — the town needs to demonstrate to all of Camp Verde’s taxpayers, the state of Arizona, state regulators and any potential litigants who may sue, arguing that the town is violating the Gift Clause of the Arizona State Constitution, that alleged tax revenue really does provide a tangible and document profit to taxpayers.
“Just trust us,” might be sufficient for a lease between two private parties, but that’s simply not sufficient for any government. Nor is it sufficient for Camp Verde taxpayers who may appreciate what a rodeo arena culturally prints to their Western town but have never set foot on the rodeo grounds.
They have every right to wonder why their town government is gifting a private nonprofit with a sweetheart deal on public land and a public facility when another nonprofit or organization could run the same programs and events and demonstrate a clear, tangible, measurable financial benefit for their tax dollars.
The Gift Clause is not a fungible guideline, rather, it is explicitly spelled out in the Arizona State Constitution, in Title 9, Section 7:
Arizona State Constitution, Title 9, Section 7:
Gift or loan of credit; subsidies; stock ownership; joint ownership:
“Neither the state, nor any county, city, town, municipality, or other subdivision of the state shall ever give or loan its credit in the aid of, or make any donation or grant, by subsidy or otherwise, to any individual, association, or corporation, or become a subscriber to, or a shareholder in, any company or corporation, or become a joint owner with any person, company, or corporation, except as to such ownerships as may accrue to the state by operation or provision of law or as authorized by law solely for investment of the monies in the various funds of the state.”
The case law on the Gift Clause is quite extensive [Click the highlighted links to read the case law]:
- In Wistuber v. Paradise Valley Unified School District from 1984, the Arizona Supreme Court held that a government expenditure does not violate the Gift Clause if both [a] the expenditure has a public purpose and [b] the consideration received by the governmental entity “is not so inequitable and unreasonable that it amounts to an abuse of discretion, thus providing a subsidy to the private entity.”
- This was clarified and reaffirmed by the court in Turken v. Gordon in January 2010.
- In February 2010, the court held that indirect benefits, such as projected sales tax revenues, may not be considered in determining the adequacy for Gift Clause purposes of the consideration received by a governmental entity in a transaction with a private party — the only benefits that may be considered are those that flow directly from the contractual provisions and the counterparty. [Opinion at 16, ¶22. The court found that indirect benefits such as potential sales tax revenues cannot be part of the computation of what the government receives. On the contrary, the only consideration that can be considered “focuses instead on the objective fair-market value of what the private party has promised to provide in return for the public entity’s payment.”]
- Locally, on July 10, 2019, the city of Sedona abandoned its previous policy of providing the Sedona Chamber of Commerce with 55% of bed tax revenue to eliminate a potential violation of the gift clause in Arizona’s constitution.
- On Feb. 8, 2021, the Arizona Supreme Court held in Schires v. Carlat that expenditures of public funds by the city of Peoria to induce a private university to establish a branch campus violated Arizona’s Gift Clause.
- On Jan. 16, 2024, Arizona Attorney General Kris Mayes announced that the Arizona Commerce Authority’s CEO Forums violated the Arizona Constitution’s Gift Clause.
It’s very hard for any competent legal counsel to argue that a $1 per year lease offered to a private nonprofit to run a government facility with no proof of financial benefit to that government and its taxpayers is not a gift — unless that nonprofit can then prove with financial documentation that substantial financial revenues are returned to taxpayers and not simply pocketed.
This argument certainly doesn’t allege that the CVAA or its members are profiting personally from the arrangement, but “take our word for it” is legally and constitutionally insufficient — the CVAA must back that up with documentation.
If CVAA refuses or can’t do so, then it certainly looks like a “gift,” which de facto violates the state constitution.
Under the proposed lease deal, which the CVAA rejected, the nonprofit would need to provide information about events, attendance, site improvements, security protocols and financial data. This is pretty bare-bones material that any functional nonprofit can provide in a contract. It’s not clear why the CVAA would be unable to provide these or would refuse to just to defy a contract as a negotiation tactic.
If the CVAA is unable to provide these financial records, then it made it abundantly clear that the CVAA is not mature or competent enough to run a taxpayer-owned government facility. If the CVAA instead just wanted to play chicken, hoping the government would blink and defy state law, then the CVAA overplayed a losing hand — council members had no choice but to cancel the contract. The vote was unanimous — and it had to be given the options.
With the town issuing a Request for Qualifications on Dec. 12 and giving CVAA until March to vacate, no one benefits, but was the only course the CVAA left the town. Perhaps wiser minds at CVAA will triumph and it or a new assemblage of CVAA members will make a bid and provide the required documentation in a new organization going forward, but this CVAA loss was a 100% avoidable self-own.
Request for Qualifications to run the Camp Verde Equestrian Center
“The Town of Camp Verde is seeking Statements of Qualifications (RFQ 25-224) from experienced, highly capable entities to manage, operate, and promote the Camp Verde Equestrian Center. The Town’s goal is to partner with an operator who can elevate the facility as a premier regional equine destination, expand event programming, support local economic development, and maintain a strong, collaborative working relationship with the Town. Deadline for inquiries is Monday, Jan. 29, 2026, at 1:00 PM, Local Arizona Time. Questions and/or inquiries must be emailed to Town Manager Miranda Fisher at Miranda.Fisher@campverde.az.gov. Proposals shall be emailed to Town Manager Miranda Fisher on or before 1 p.m. Thursday, Feb. 5, 2026. For more information, please review the attached proposal document”:
Town-of-Camp-Verde-Equestrian-Center-RFQ
