44 East Broadway
The Rio Nuevo Board on Tuesday took the actions necessary to finalize a $34 million mixed-use project at 44 E. Broadway and celebrated the Arizona Legislature’s 10-year extension of its work.
At its regular monthly meeting, the Board authorized completion of the 44 E. Broadway project being developed by Ron Schwabe and Marcel Dabdoub. The total capital investment is estimated to be $34.3 million, including construction and acquisition costs.
The Board agreed last year to provide incremental sales tax incentives to the developers. The project includes renovation of 26,120 square feet of office and retail space in the existing building and 79,477 square feet of office and retail space in two new buildings to be constructed on an adjacent and a nearby vacant parking lot.
The first story of the existing building will be partially redeveloped into 896 square feet of retail space. An additional 5,339 square feet of retail space is under construction and will be completed in late 2018.
The new buildings will be constructed in 2019 and completed in 2020 and will include 18,325 square feet of street-level retail space with structured parking on the second, third and fourth levels and 61,152 square feet of Class A office space on the upper floors.
Rio Nuevo Extension
Board Chairman Fletcher McCusker expressed gratitude to Rep. Mark Finchem, R-Tucson, who introduced the bill that extended Rio Nuevo from 2025 to 2035; to Rio Nuevo’s legislative liaison Jonathan Paton; and to Gov. Doug Ducey, who signed the legislation earlier this month.
“What it provides for this community is it gives us a chance to finish our work,” which will include additional improvements to the Tucson Convention Center, McCusker said.
He estimated that Rio Nuevo would receive an additional $150 million in sales tax revenue returned by the state over the additional 10 years. With Rio Nuevo’s demonstrated ability to attract private partners and to leverage its investment with private dollars, “we could be stewards of something like $1 billion,” he said.
Adam Weinstein, president and CEO of The Gadsden Co., thanked the Board for its crucial investment in the Mercado Annex, 1.5 acres south of the Mercado San Augustin where restaurants and retail shops occupy modified shipping containers and events can be held in a 500-seat outdoor space with a stage.
The complex is 100 percent occupied and the calendar for the outdoor event space is filling up, Weinstein said. A public block party celebrating the complex’s opening on May 4, 5 and 6 will feature resident artist group Flam Chen and popular musical groups, he said.
Landscaping is going in now, and on-site water harvesting and an extensive below-ground irrigation system will result in a “nice, high-quality, desert-oriented complex,” Weinstein said.
The Rio Nuevo Board invested $3.9 million in the project, including $1.2 million to buy out the City of Tucson’s stake, while Gadsden invested more than $8 million.
“It really is going to be a gem for the community,” Rio Nuevo Board member Jannie Cox said.
In other action at its regular monthly meeting, the Board:
- Agreed to extend its sales tax incentive rebate program with the TCC for two more years. The Board previously entered into two annual agreements with SMG, the Pennsylvania general partnership that manages the TCC, to rebate a portion of the incremental sales taxes generated by TCC customers that satisfy certain taxable sales revenue thresholds for a single event. TCC General Manager Glenn Grabski told the Board that the rebates have helped the TCC attract large events to the venue.
- Agreed to extend certain development agreement contingences with Caliber Hospitality, which is developing a 125-bed hotel on the southeast corner of the TCC, until July 8. Zoning of the project has been approved, Caliber has retained an architect and the project is moving forward.