Governor Ducey Approves Extension of Rio Nuevo

Govenor Ducey Approves Extension of Rio Nuevo to 2035

April 5, 2018

House Bill 2456, the 10-year extension of Rio Nuevo, was signed into law by Governor Doug Ducey on April 5, 2018.

The bill was sponsored by Rep. Mark Finchem, R-Tucson, and overhwlemingly supported by the Arizona House of Representatives and the Arizona Senate. It extends Rio Nuevo’s life from 2025-2035.

“Governor Ducey has had strong ties to Southern Arizona and continues to be a driving force in our economic development initiatives,” said Fletcher McCusker, Chairman of Rio Nuevo.

“We are very grateful to Governor Ducey for his leadership and commitment to Southern Arizona and ensuring there is accountability, while providing the economic development tools to support small businesses and continue to grow downtown and the local economy. Representative Finchem was instrumental in building a bipartisan super majority in both legislative chambers and has helped provide the means to help Tucson’s downtown become one of the best revitalization stories in the country.”

Rio Nuevo has invested $32.5 million of Rio Nuevo Multipurpose Facilities District sales tax revenue returned by the state to launch 20 projects valued at nearly $366 million.

Rio Nuevo Board Tallies Economic Impact, Advances Three Projects- March 22, 2018

The Rio Nuevo Board on Tuesday reviewed the investments it has made downtown, the private funds it has attracted and the progress of its projects.

Board Chairman Fletcher McCusker said that the success Rio Nuevo has had advancing its proposed 10-year extension in the Arizona Legislature is due to “our willingness to show people our work.”

House Bill 2456, which extends Rio Nuevo from 2025 to 2035, has been approved by the Arizona House and by the Senate Commerce and Public Safety Committee and is on its way to a full Senate vote.

“The reason we’ve been so successful in Phoenix is we’ve shown the economics of every single project,” McCusker said.

Rio Nuevo has invested $32.5 million of Rio Nuevo Multipurpose Facilities District sales tax revenue returned by the state to launch 20 projects valued at nearly $366 million.

The estimated sales tax generated from construction of all Rio Nuevo-assisted projects is $29 million.

“We’ve had people criticize us for wasteful spending,” McCusker said. “This is just the opposite.”

The summary of investments will be posted on the Rio Nuevo website, http://rionuevo.org.

The Board also heard updates and took action, as needed, on three projects moving forward:

  • Sunshine Mile: The Board voted unanimously to allocate up to an additional $75,000 for consultant services from Project for Public Spaces and for architectural services to develop plans for remnant properties affected by the Broadway widening that the City of Tucson is expected to deed to Rio Nuevo. The Board also authorized counsel to draft and disseminate a Request for Qualifications for the architectural services.
    The Regional Transportation Authority is expected to approve an intergovernmental agreement with Rio Nuevo and the City next week. As soon as it is signed, Rio Nuevo will begin working with local merchants and local developers on 39 unique properties north of Broadway. The properties will then be leased, returned to the tax rolls and ultimately sold with the proceeds going to the RTA.
  • 75 E. Broadway: The Board was told that a development agreement with JE Dunn Construction would be executed this week. That starts a 120-day period during which Rio Nuevo will obtain the necessary pre-construction clearances and surveys for the site and develop a ground lease with Pima County and a sublease with JE Dunn. Meanwhile, JE Dunn will assess its ability to proceed with construction of a building up to 20 stories tall at Broadway and 6th Avenue with 250,000 square feet of office space, 40,000 square feet of retail space and parking for 500-600 cars.
  • Toole & 7th Avenue Restaurant Project: The Board voted unanimously to authorize its counsel and executive officers to finalize a lease/purchase agreement that enables development of a new restaurant and beverage establishment at 35 E. Toole in the Warehouse District without a commitment of cash from Rio Nuevo.
The creation of the Rio Nuevo Multipurpose Facilities District was approved by Tucson voters in 1999, along with an appointed Board, to invest state tax dollars in public and public/private projects to create a vibrant Tucson core. For every dollar the Board invests, the community reaps $10 of construction activity with projects like the AC Hotel Tucson by Marriott, the Arena, Greyhound, the Mercado Annex, City Park, the Marist project and Caterpillar. For more information, visit http://rionuevo.org.

summary

Rio Nuevo and the Sunshine Mile- Trend Report

Rio Nuevo Board Advances Plan to Assist Businesses Affected by Broadway Widening- February 28, 2018

The Rio Nuevo Board voted unanimously Tuesday to move forward with three important projects:

  • Assistance to businesses affected by the Broadway widening.
  • The proposed construction of one of downtown’s tallest buildings on the parking lot northwest of Broadway and 6th Avenue
  • Remediation of a landfill at the base of “A” Mountain near the future Caterpillar Tucson Mining Center.

At its regular monthly meeting, the Board agreed to direct its executive officers and counsel to execute an intergovernmental agreement (IGA) with the City of Tucson and the Regional Transportation Authority that would allow Rio Nuevo to assist businesses affected by the Broadway widening between Country Club Road and Euclid Avenue.

Board Chairman Fletcher McCusker said the City of Tucson is using RTA funds to acquire 40 properties that will lose parking, right of way or other critical space as a result of the voter-approved Broadway widening RTA project. The IGA authorizes the City to convey title of surplus properties to Rio Nuevo, which will then work with developers and existing or prospective tenants to rebuild and/or repurpose the properties. The properties will then be leased, returned to the tax rolls and ultimately sold with the proceeds going to the RTA.

The Board also authorized its executive officers to approve a development agreement with JE Dunn Construction for a 20-story building with 250,000 square feet of office space, 40,000 square feet of retail space and parking for 500-600 cars at Broadway and 6th Avenue.

Pima County, which owns the lot, agreed in September 2016 to lease or sell it to the project developer. JE Dunn responded to a Rio Nuevo Request for Proposals issued in September 2017 and was the highest rated respondent.

The development agreement with JE Dunn would establish a 120-day period during which Rio Nuevo would obtain the necessary pre-construction clearances and surveys for the site and JE Dunn would assess its ability to proceed with construction of the building.

Todd Freed, vice president of construction for JE Dunn Construction, assured the Board that JE Dunn “very much can, very much wants to” construct the building and is “excited” about this opportunity in Tucson.

The Board also unanimously agreed to continue conversations with the Tohono O’odham Tribal Council about the remediation and possible development of a 27-acre landfill at the foot of “A” Mountain that is believed to be of historical and cultural significance.

McCusker delivered a progress report on other Rio Nuevo projects as the meeting got underway.

  • Sundt Construction is expected to begin masonry and steel construction for the Caterpillar Tucson Mining Center this week. The bike path along the Santa Cruz River east of the center site is also expected to reopen this week.
  • City Park, a Bourn Companies dining/entertainment/office project at 40 E. Congress St., is expected to open in June. Hexagon Mining has added 10,000 square feet to the space it will use for 200 employees and its North American headquarters. The first floor food hall is 100 percent leased, McCusker said.
  • The AC Hotel by Marriott at 151 E. Broadway was 100 percent booked when McCusker visited recently.
  • The 125-bed hotel planned by Caliber Hospitality in the east parking lot of the recently remodeled Tucson Convention Center (TCC) has obtained its zoning permit.
  • The TCC was booked for 330 of the past year’s 365 days. More than 523,000 people attended events there, generating an economic impact of $15 million per year. The Tucson Roadrunners hockey team, which plays at the TCC, is ranked second in the American Hockey League.
The creation of the Rio Nuevo Multipurpose Facilities District was approved by Tucson voters in 1999, along with an appointed Board, to invest state tax dollars in public and public/private projects to create a vibrant Tucson core. For every dollar the Board invests, the community reaps $10 of construction activity with projects like the AC Hotel Tucson by Marriott, the Arena, Greyhound, the Mercado Annex, City Park, the Marist project and Caterpillar. For more information, visit http://rionuevo.org.

Rio Nuevo Board Advances Proposal for One of Downtown’s Tallest Buildings- January 24, 2018

The Rio Nuevo Board voted unanimously Tuesday to direct its executive officers and counsel to negotiate and bring back to the board a final development agreement for what could be one of downtown’s tallest buildings.

Todd Freed, vice president of construction for JE Dunn Construction, told the Board at its regular monthly meeting that the potentially 300-foot-tall building that JE Dunn proposes to build on the parking lot at Broadway and 6th Avenue could contain 250,000 square feet of office space, 40,000 square feet of retail space and parking for 500-600 cars.

It will be the first Class A building downtown since the Tucson Electric Power building across Broadway from the parking lot, Freed said.

The project is expected to cost $110 million and will generate 1,250 new jobs and $2.2 million annually in sales tax, he said.

“We always hoped there’d be someone like you out there,” Rio Nuevo Chairman Fletcher McCusker told Freed.

McCusker called the proposal “an extraordinary plan” but explained that the Rio Nuevo Board was using a government procurement process to develop the parking lot and that unless and until a final agreement is executed the deal will not be done. The Board issued a request for proposals last year, and the JE Dunn proposal was ranked highest. The Board will work with JE Dunn, Pima County and the City of Tucson to craft a final development agreement. Until then, however, McCusker said “we are announcing a proposal,” not a project.

JE Dunn was founded in Kansas City, Mo., in 1924 and has done business in Tucson for many years, Freed said, including work with Tucson Medical Center and the University of Arizona.

The Board also approved the last phase of Sundt Construction’s construction of Caterpillar’s Tucson Mining Center and payment to Sundt of $8.5 million. The center is expected to open in the first quarter of 2019. McCusker congratulated Sundt for carrying out the project “under budget and on time.”

McCusker announced at the meeting that a bill has been introduced in the Arizona House to extend beyond 2025 the term during which the Rio Nuevo District receives state sales tax funds for the purpose of downtown and district development. He said House Bill 2456 would be assigned to a House committee, and he encouraged those in attendance at the meeting to contact their legislators and encourage their support of the bill.

The creation of the Rio Nuevo Multipurpose Facilities District was approved by Tucson voters in 1999, along with an appointed Board, to invest state tax dollars in public and public/private projects to create a vibrant Tucson core. For every dollar the Board invests, the community reaps $10 of construction activity with projects like the AC Hotel Tucson by Marriott, the Arena, Greyhound, the Mercado Annex, City Park, the Marist project and Caterpillar. For more information, visit http://rionuevo.org.

Broadway & 6th Ave Proposal

A Year of Success

Caterpillar on Schedule, on Budget; Rio Nuevo Board Reflects on 2017 Accomplishments- December 14, 2017

The Rio Nuevo Board reflected on projects launched and accomplished in 2017 at its December meeting.

Projects underway and accomplishments summarized by Board Chairman Fletcher McCusker at the meeting Tuesday included:

  • AC Marriott Hotel (“It’s open and doing well,” McCusker said.)
  • The Moxy Hotel
  • The Mercado Annex (expected to open in January)
  • Cathedral Square
  • Scott Avenue Streetscape improvements, including new café sidewalk seating
  • Brings (Owls Nest)
  • Arizona Hotel (Hilton)

McCusker also reported that the Tucson City Council has approved the zoning for the Tucson Convention Center Hotel, a 130-bed boutique hotel to be built adjacent to the exhibition hall, funded entirely by private sector dollars.

“Any direction you look downtown you will see a Rio Nuevo at Work sign,” McCusker said.

McCusker noted that the December Trend Report featured a front-page story on Rio Nuevo’s best year ever.

He also acknowledged that the Board hopes to award the 75 East Broadway project to a developer in January, perhaps the biggest project ever undertaken in downtown Tucson.

“Our partnership model is working,” he said. “We are still showing ten times leverage” – that is, 10 private dollars invested for every one dollar of Rio Nuevo’s sales tax revenue invested.

Phil Swaim, project manager for the Caterpillar Tucson Mining Center project, reported that the site preparation is complete and that the foundation, plumbing and electrical work is in progress. Caterpillar’s move-in date is still planned for March 2019. The Board asked that the Caterpillar camera on site go live at www.rionuevo.org so that the public can watch the progress.

Rio Nuevo Board Advances Caterpillar’s Tucson Mining Center, Supports New Restaurant on Toole Avenue- November 3, 2017

The Rio Nuevo Board this week unanimously agreed to a sale/leaseback incentive program in order to assist developers in activating property at 35 East Toole, in the Warehouse District, as a new restaurant and beverage establishment.

The new concept will be anchored and managed by Zach Fenton, the founder of the extremely successful Reilly Craft Pizza restaurant. Rio Nuevo will not advance any cash to the developers.

The Board also unanimously approved $19 million to initiate construction of Caterpillar’s Tucson Mining Center building. Sundt Construction advised the Board that the site work is done and the project is on time and on budget, targeting a March 2019 completion.

This contract is the third of four that will total approximately $43 million, all of which is being financed with private sector dollars, not state funds.

In related action, the Board authorized the City of Tucson to utilize the Rio Nuevo Multipurpose Facilities District’s existing agreement with Sundt to remediate the landfill on City-owned parcels adjacent to the southern and western boundaries of the Caterpillar Tucson Mining Center. This approach will maximize the remediation benefit that can be accomplished with the public funds authorized by the Tucson City Council in August.

The Board further approved the Intergovernmental Agreement among the City, the Regional Transportation Authority and Rio Nuevo that will allow the District to take possession of the surplus properties acquired by the City as part of the Broadway widening project. The Board plans to partner with private developers to reactivate properties along Broadway as retail.

The District’s independent auditors presented the Board with an unqualified audit for fiscal 2017 and acknowledged that the District’s transparency and web posting of expenses makes Rio Nuevo an easy organization to audit because every check written is posted to the website.

Finally, the Board unanimously continued the current slate of officers for another two-year term:  Fletcher McCusker, Chairman; Mark Irvin, Secretary; and Chris Sheafe, Treasurer.

The creation of the Rio Nuevo Multipurpose Facilities District was approved by Tucson voters in 1999, along with an appointed Board, to invest state tax dollars in public and public/private projects to create a vibrant Tucson core. For every dollar the Board invests, the community reaps $10 of construction activity with projects like the AC Hotel Tucson by Marriott, the Arena, Greyhound, the Mercado Annex, City Park, the Marist project and Caterpillar. For more information, visit http://rionuevo.org.

Rio Nuevo Board Authorizes $43M in Financing for Caterpillar’s Tucson Mining Center- September 27, 2017

The Rio Nuevo Board this week unanimously approved a motion to authorize its executive officers to finalize and execute the $43 million loan package issued by Rio Nuevo to finance the construction of Caterpillar’s Tucson Mining Center.

The entire $43 million plus interest will be passed on to Caterpillar by the terms of a multi-year lease. At its regular board meeting Tuesday, the Board approved the next phase of construction for the Tucson Mining Center totaling approximately $7.4 million dollars for the foundation work to begin November 1, 2017. Sundt Construction reported that the project is on time and on budget.
The Board also:

  • Approved the final terms of an agreement with Flores Concepts to reinvigorate three downtown properties.
  • Authorized the hiring of a project manager for improvements to Ochoa Street as part of the Cathedral Square project.
The creation of the Rio Nuevo Multipurpose Facilities District was approved by Tucson voters in 1999, along with an appointed Board, to invest state tax dollars in public and public/private projects to create a vibrant Tucson core. For every dollar the Board invests, the community reaps $10 of construction activity with projects like the AC Hotel Tucson by Marriott, the Arena, Greyhound, the Mercado Annex, City Park, the Marist project and Caterpillar. For more information, visit http://rionuevo.org.

Wig-O-Rama

Rio Nuevo Advances Three Downtown Hotel Projects, including Hotel Arizona- August 24, 2017

The Rio Nuevo Board this week approved a plan to facilitate the reopening of the Hotel Arizona while also advancing two other hotel projects: The Moxy at the Depot Plaza and The Caliber Hotel at the Tucson Convention Center.

The Board’s incentives are very similar for each project and include the Rio Nuevo Multipurpose Facilities District’s portion of a state sales-tax rebate program for each property.

The Board’s actions occurred at its regular monthly meeting on Tuesday and could add as many as 560 hotel beds downtown, with 430 beds adjacent to the Tucson Convention Center, home of the Tucson Roadrunners ice hockey team.

“The effort to get the Hotel Arizona reopened has been a major focus of the Rio Nuevo Board for more than six years,” said Board Secretary Mark Irvin. “This 300-plus-room hotel, with 30,000 square feet of meeting and convention space, is adjacent to the Tucson Convention Center – the Rio Nuevo District’s primary component – and is a key to its success.”

According to the proposal by Hotel Arizona’s owner HSL Properties, HSL and its investors will invest $20 million to renovate the hotel, which has been closed since 2012. HSL anticipates reopening the project as a Hilton-branded hotel by January 2019, in time for the Tucson Gem Show.

Rio Nuevo will acquire title to the property and lease it back to HSL for 25 years.

Board member Edmund Marquez called the action “a big deal.”

“I think we are the largest city with a convention center and no hotel,” he said. “This is a defining moment for Tucson and downtown.”

In other action, the Board approved intergovernmental agreements with the City to efficiently utilize public funds by remediating landfill from City owned parcels adjacent to the Caterpillar project and by extending Avenida del Convento at City expense all while utilizing the already mobilized skills of Sundt Construction.

The creation of the Rio Nuevo Multipurpose Facilities District was approved by Tucson voters in 1999, along with an appointed Board, to invest state tax dollars in public and public/private projects to create a vibrant Tucson core. For every dollar the Board invests, the community reaps $10 of construction activity with projects like the AC Hotel Tucson by Marriott, the Arena, Greyhound, the Mercado Annex, City Park, the Marist project and Caterpillar. For more information, visit http://rionuevo.org.

Hotel Arizona1

Cat2

Caterpillar

Caterpillar Inc. and Rio Nuevo Release Plans for Tucson Mining Center- August 9, 2017

Caterpillar Inc. and Rio Nuevo today released design renderings of Caterpillar’s new 150,000 square‐foot Tucson Mining Center to be located in the Mercado District in downtown Tucson. The
Tucson Mining Center, being built by the Rio Nuevo Multipurpose Facilities District, will be occupied by about 600 company engineers, product development, and support positions working on the next generation of mining equipment, vehicles, and technology. It is scheduled to open in the first quarter of 2019.

SmithGroupJJR of Phoenix in collaboration with WSM Architects of Tucson designed the three‐level building to blend into the desert environment and to represent the Native American history of the land, identified as Tucson’s Origins. Representatives from Rio Nuevo, SmithGroupJJR + WSM, and Sundt Construction have been meeting regularly with neighbors and historians to create a site plan and design that will become one of the Southwest’s most recognized buildings.

The building site is northeast of A Mountain and Mission Garden, and is bounded on the north by Cushing Street, on the east by the Santa Cruz River and The Loop shared‐use path, and on the west by an extension of Avenida del Convento Street still to be built. The modern structure will be visible to motorists on Interstate 10 and Congress Street.

“Caterpillar is excited to take this next step, and we appreciate the strong partnership and support we’ve received from all members of the team. This will be a site that will make us all proud, fitting well into the community and helping show the world some of what Tucson has to offer. When finished, it will be a cutting edge and modern office space where our team will collaborate, design, and innovate solutions that drive customer success around the world.” —Jean Savage, Caterpillar Vice President for Surface Mining & Technology

“Rio Nuevo is honored to be part of the Caterpillar family and will forever be grateful to the company, not only for coming to Tucson, but for selecting this historic site. SmithGroupJJR + WSM
have done an extraordinary job designing a world class building.” —Fletcher McCusker, Chairman of the Rio Nuevo Board

“I want to congratulate Caterpillar on working so well with the city and its new neighbors. I’m excited by this building design and how well it fits with the neighborhood and I very much look
forward to the groundbreaking.” —Mayor Jonathan Rothschild, City of Tucson

“I’m happy to welcome Caterpillar to Tucson’s westside, an area rich in history and culture. This project will bring significant investment to the west end of downtown, and serve as a catalyst for
more smart and sustainable development that benefits our community.” —Vice Mayor Regina Romero, City of Tucson

“Caterpillar is truly a forward‐thinking company with an amazing culture. It has been the privilege of SmithGroupJJR + WSM to collaborate with and create a design solution that will support and
enhance their business strategy. We thank Rio Nuevo for the opportunity to deliver an architecture that is appropriate for Caterpillar’s future work environment, while respecting this important and historic Tucson Site.” —SmithGroupJJR + WSM Design Team

Rio Nuevo Approves Partnership with Flores Family Business to Facilitate Control of Three Downtown Properties- July 26, 2017

The Rio Nuevo Board this week unanimously approved investing as much as $250,000 with Ray Flores of Flores Concepts, which plans to assume control of one shuttered nightclub and one operating club, along with an adjacent vacant building.

The Board convened its regular monthly meeting on Tuesday to discuss a potential agreement with Flores Concepts, the financing for the construction of Caterpillar’s Tucson Mining Center, and other business.

The Flores family, the force behind El Charro Café, Charro Steak, Sir Veza, and the Stillwell House, has negotiated an agreement to buy out the lease interest of the H2O Discotec at 61 E. Congress St., Zen Rock nightclub at 121 E. Congress, and the former Betty Gay building at 125 E. Congress. Flores Concepts intends to renovate, rebrand and reopen all three establishments.

H2O and Zen Rock were part of the first wave of food and beverage establishments on Congress in 2010 and helped establish downtown as a destination. Other more popular venues have opened, and H2O and Zen Rock have not evolved. H2O is closed.

The Board authorized the Rio Nuevo Multipurpose Facilities District’s executive officers to negotiate and finalize a loan of up to $250,000 to Flores, the repayment of which would bear interest and be secured by a pledge of assets and a guaranty. Flores estimated that new sales tax generated by the Flores businesses could be as much as $260,000 annually, which could provide as much as a 100 percent annual return on the Rio Nuevo investment. In addition to making its own $250,000 initial investment, Flores Concepts will fund all the tenant improvement capital and working capital to revive the three properties.

In other business, District attorneys presented the schedule for the $43 million lease revenue bonds designed to fund the Caterpillar Mining Center project.

The Board also authorized a Request for Proposal to be issued in conjunction with the development of Pima County’s parking lot at 77 E. Broadway, between Scott Avenue and 6th Avenue and north of the Tucson Electric Power headquarters. The District will seek competitive proposals offering to develop a high-rise, mixed-use project that would include retail, parking and Class A office space. The District has an option to lease or buy the property from Pima County and, consistent with the District’s current public/private partnership investments, will look for a private sector partner to develop the project.

The RFP release will be posted on the Rio Nuevo website, http://rionuevo.org.

The Board also unanimously authorized the submission of a new Planned Area Development for the area around the Tucson Convention Center in order to accommodate a new 125-bed convention center hotel proposed by Caliber Hospitality.

The creation of the Rio Nuevo Multipurpose Facilities District was approved by Tucson voters in 1999, along with an appointed Board, to invest state tax dollars in public and public/private projects to create a vibrant Tucson core. For every dollar the Board invests, the community reaps $10 of construction activity with projects like the AC Hotel Tucson by Marriott, the Arena, Greyhound, the Mercado Annex, City Park, the Marist project and Caterpillar. For more information, visit http://rionuevo.org

The Rio Nuevo Board would like to welcome you to the Official Web Site for the Rio Nuevo downtown redevelopment and revitalization district.

© 2018 RNMFD. All rights reserved.