Rio Nuevo and Nor-Gen Sign Agreement to Develop Arena Site

“Today is an historic day for Rio Nuevo.” With those words Chairman Fletcher McCusker described the January 27, 2015 meeting of the Rio Nuevo Board. During the meeting, the Board worked through a lengthy agenda by taking action to begin Phase II of the Tucson Convention Center renovation, to simplify and enhance the District’s relationship with the Fox Theatre and, perhaps, most importantly, to complete the process of finalizing an agreement with Allan Norville’s Nor-Generations, LLC in which Nor-Gen agreed to acquire and develop the 8.5 acres adjacent to the freeway commonly referred to as the Arena Site.

Nor-Gen won the “right to negotiate” with the District in August of 2014, based upon a proposal in which it offered to buy the land for $5.6 million dollars and develop a multi-faceted project that included a hotel, parking facilities, a visual arts complex, residential and retail space on the Arena Site, which is adjacent to the parcel upon which Nor-Gen will construct as an exhibition hall as the permanent home for the gem show. As indicated by post-August comments from the District Board, coming to a final agreement with Nor-Gen had become arduous. As a result of yesterday’s meeting, however, the parties finalized, executed and released the final Purchase and Sale Agreement.

By the terms of the agreement, Nor-Gen has a limited amount of time to assess the property and determine whether it wants to proceed with the purchase and development. If it does, the sale will close quickly and Nor-Gen will have six months to submit a development plan to the City of Tucson. Once the City approves the Nor-Gen’s plan, the Greyhound Terminal will have a year to be relocated and then the construction timeline calendar begins. Nor-Gen will have 42 months after the Greyhound Terminal is moved to invest a minimum of $10,000,000 in hard construction costs on the Arena Site or pay the agreed upon liquidated damages of $2.5 million.

After the execution of the agreement, Chairman McCusker proclaimed that “we are grateful to Allan and his team for working through all of the issues in the agreement.” McCusker went on to say that “given the legacy of failed Rio Nuevo projects, we succeeded in attaching meaningful conditions to assure the taxpaying community that this gateway parcel actually gets developed.”

In further action, the Board asked District attorneys to complete the Fox loan agreement by providing the District with additional governance oversight on major matters coming before the Fox board, such as additional debt, or changing the mission or hiring and firing of the CEO. “Now that the Board has facilitated the removal of the Historic Trust, we want to make sure the Fox Foundation thrives so that its financial obligation to the Rio Nuevo District can be satisfied,” commented Treasurer Chris Sheafe.

The Board also unanimously approved retaining Swaim and Associates as architects for the TCC Phase II project. Swaim was the architect for the TCC Arena remodel and had offered to continue in that capacity. Once a scope of work has been agreed upon, the Board will consider soliciting bids for Phase II.