City of Phoenix v. Phoenix Civic Auditorium & Convention Ctr. Ass'n., Inc
In City of Phoenix v. Phoenix Civic Auditorium & Convention Ctr. Ass'n., Inc., 99 Ariz. 270, 408 P.2d 818 (1965) the court was asked to declare the constitutionality of the City's proposed agreement with a non-profit entity to construct a civic center and lease it to the City on a long-term basis in return for monthly rental payments.
At the end of the lease period, the City would own the civic center. 99 Ariz. at 274, 408 P.2d at 820.
Significantly, the City did not pledge any specific source of revenue to pay the monthly rentals. Id.
Consequently, the court declared the lease-purchase plan unconstitutional because it obligated the City to pay an amount from its general funds in excess of the local-debt limitation. Id. at 287-88, 408 P.2d at 829-30.