Archive for January 4th, 2009

4th January
2009
written by JHiggins

Tourism is down nation wide. Qudos to the Metro Tucson Convention and Visitors Bureau for thinking outside the box.  Check out the MTCVB annual report – HERE.  From the MTCV newsletter;

Bold New Programs Target Meeting Business
The MTCVB has launched a bold program to draw group meetings and conventions to Tucson. We are offering up to $20,000 credit to groups booking meetings in Tucson in 2009.  In December, we began an electronic and direct-mail campaign offering groups $1,000 – $10,000 credit per meeting for their master accounts, dependent upon the number of peak room nights booked. We will provide half the appropriate credit, and participating meeting hotels/resorts will pay the other half in the form of master account credit. Groups booking consecutive multi-year events (2009 and 2010) will receive incentive funding for both meetings. Meetings booked in 2009 for 2010 dates will receive 50 percent of the outlined incentive credit.

A separate but complementary incentive program rewards Tucsonans who provide the MTCVB with qualified leads that result in booked meetings. Every individual who submits a qualified lead referral will receive a $100 gift certificate to Tucson Originals restaurants and be entered into a drawing for prizes, including a $1,000 shopping spree at La Encantada, a $500 spa day at Miraval Tucson Resort, a $5,000 radio advertising schedule at a Citadel Broadcasting Radio Station with a custom marketing consultation, and a set of roundtrip airline tickets.

The goal of these programs is to stimulate meeting business for Tucson hotels and resorts and to aid meeting professionals with budgetary concerns. For more information, contact Graeme Hughes, MTCVB Director of Convention Sales, at 770-2174.

4th January
2009
written by Arizona Kid

Planning and Growth

Fifty-seven years ago, the city of San Jose hired a new city manager, A. P. “Dutch” Hamann, who previously had been a middle manager for General Motors. Hamann had a vision for San Jose and he carried it out with gusto. 

Sprawling San Jose.

Hamann had grown up in Orange County and felt there was something wrong with an urban area that did not have an identifiable central city. He could see that the area that would eventually be known as Silicon Valley was growing, and he set out to make San Jose, which calls itself the oldest city in California, the most important city in the region.

 He succeeded in spades. Over the next two decades, San Jose grew by an average of 8 percent per year, from 95,000 people to nearly 450,000 people.

His tools were aggressive annexation (mostly supported by the landowners being annexed) and maintenance of a business-friendly environment. To achieve and maintain San Jose’s dominance over other cities in the valley, Hamann would spot where development was about to take place and annex land in and around that development. Some people called this “strip annexations” because he would annex small strips of territory to prevent other cities from annexing that and adjacent land.

As it turned out, he was too successful. By the late 1960s, an anti-growth mentality had grown in California. Critics said San Jose was guilty not of unplanned growth but “mis-planned growth.” (This and other quotes are from a 1971 book called “San Jose: Sprawling City” published by the Stanford Environmental Law Society.) They complained about the irregular boundaries that had resulted from strip annexations. And they charged that existing residents were being forced to pay high taxes to subsidize growth.

There is little evidence that this last charge is true. For the most part, the city sat back and let builders pay for the roads, water, and sewer lines. They sometimes even paid for schools and parks. The areas annexed often brought in huge property and sales tax revenues. In the long run, these areas easily paid their way. Hamann argued that annexations kept taxes low, and he was probably correct – after all, one of his goals was to keep San Jose tax rates low so as to attract more employers.

“They say San Jose is going to become another Los Angeles,” Hamann said in response to his critics. “Believe me, I’m going to do everything in my power to make that come true.” Of course, Hamann and his critics had different views of what “Los Angeles” was. He considered it an economic powerhouse. They considered it (quite wrongly) the epitome of sprawl.

One of the criticism was that development decisions were “simply turned over to the private sector.” This would resonate with lots people today. Before 1960 or so, however, it would be a very peculiar statement. After all, why should people be allowed to do what they want with their own land. I am pretty sure that Santa Clara County did not have zoning at that time. So until San Jose annexed their land, they were free to do what they wanted with it. Since most of the annexations were voluntary, Hamann must have agreed with the landowners that they could do what they wanted with their land.

All this changed in 1969, when no-growth advocates took over the city council. Hamann resigned rather than try to work with people with whom he so strongly disagreed. He was killed in a plane crash a few years later.

He might feel vindicated to see San Jose today. Thanks to no-growth policies, housing is unaffordable, tax rates are high, jobs are fleeing, and the region is becoming more and more like Los Angeles – a dense, congested, unaffordable urban area – every day.

What brings this up is a story in yesterday’s Oregonian. Several years ago, Portland planners finally added some areas to the region’s urban-growth boundary. But this hasn’t relieved the housing crunch because no one can build in those areas until planners are done planning them

Future sprawl, Oregon. (Not quite North Bethany, but close.)
Flickr photo by Audrey’s Dad.

One of those areas, North Bethany, is 800 acres of greenfields. Planners wonder how they are going to finance the $300 million in infrastructure costs required to support development of the area. Their solution? Declare the greenfields “blighted” so they can create an urban-renewal district. All property taxes collected on new development will go to subsidize the development. Meanwhile, everyone else in the region will have to pay higher taxes (or accept lower services) to cover the costs of operating schools, fire, police, and other services in North Bethany.

In what way is this “planned” growth better than Hamann’s “mis-planned” growth?

  • Under Hamann’s system, developers paid most of the capital costs and property owners paid the operating costs out of their taxes. Under the planned system, property owners pay the capital costs out of their taxes and everyone else has to subsidize the operating costs for new developments.
  • Under Hamann’s system, developers developed when the market was ready for development, which kept housing and other costs affordable. Under the planned system, development is delayed for years while planners fiddle with their plans, which makes housing unaffordable.
  • Under Hamann’s system, population densities hovered around 3,000 people per square mile and, as of 1970, abou 20 percent of the Santa Clara County was developed. If the densities had remained the same, this would have increased to about 30 percent today. But the planned system prevented expansion, so densities have greatly increased.

In other words, planning saved about 10 percent of the county from develoment – land that is mostly marginal or submarginal farmland. The costs of saving that land include high housing prices and higher taxes, and greater sensitivity to economic recessions. Isn’t planning wonderful?

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4th January
2009
written by Downtown Dudette

Another pointed article  from Emerine on the City of Tucson’s issuance of bonds for Rio Nuevo.  The bonds were issued in such a hurry that they overpaid, they were required to have too much in reserves and the tax payers of Arizona will suffer. Come on AZ Star and Tucson Citizen, look into the cost of the bond and how much of a premium we paid. Were is it that the media isn’t looking into the fact that because we waited over a year to issue the bonds the additional cost over the term of the bond could reach into the millions.

Tucson’s leaders can’t lead when they’re in self-denial

By Steve Emerine, Inside Tucson Business
Published on Friday, January 02, 2009

What if you borrowed a big sum to expand your business and then learned the people who promised the money for you to repay the loan were talking about keeping their cash instead?

Would you tell reporters that although you haven’t talked with your money sources, you doubt they will pull the plug because you’ll be able to convince them not to?

Would you call the report “speculation and rumor” and say commenting on it would be premature?

Would you dismiss the information, saying you won’t “invest energy worrying about something until there’s something to actually worry about?”

I hope not.

But that’s exactly what Tucson Mayor Bob Walkup, City Manager Mike Hein and City Councilwoman Nina Trasoff (respectively) told the Arizona Daily Star upon learning Republican legislative leaders may yank state financing they approved in 1999 and 2006 for the Rio Nuevo downtown redevelopment project.

Tucson just incurred an $80 million debt by selling bonds to finance a part of Rio Nuevo. If legislators cut off the state funding Tucson planned to use to retire the bonds, the city and its taxpayers must either pay them off themselves or try to convince a court to order the state to do it.

Two Tucson Republicans, Senator-elect Jonathan Paton and Representative-elect Frank Antenori, confirmed last week that Maricopa County GOP legislators are indeed considering taking back the tax-increment financing authority now earmarked for Rio Nuevo.

Antenori said he’s inclined to vote with them.

The obvious question is why Republican Mayor Walkup, the six Democratic council members, Hein and other city officials didn’t meet in November or December with majority Republicans and minority Democrats to head off the threat to Tucson’s downtown plans.

The Star’s responses from Walkup, Hein and Trasoff indicate they’re in a state of denial.

City officials used similar excuses a year ago when the Colorado Rockies, who lease Hi Corbett Field and other parts of the city’s Reid Park for spring training, said they would leave if their landlord didn’t make improvements promised for nearly a decade, plus some other necessary upgrades.

Tucson officials said they didn’t have money to improve their own field, so someone else would have to pay for it.

When backers of Tucson’s annual Mariachi Conference asked council members to cut the rent for using the Tucson Convention Center, officials declined.

Fortunately, Cox Communications stepped up with a large donation to keep the conference going.

City officials regularly hear sponsors of Tucson’s various February gem shows complain about available hotel and exhibition facilities.

As Las Vegas is completing a multi-million-dollar gem skyscraper with state-of-the-art display spaces near several new hotels, Tucson continues to stall erection of a convention hotel and arena, plus rehabilitation of its convention center.

Yet local officials voiced surprise that Las Vegas was making pitches for some or all of our gem shows. One official admitted not taking the reports seriously because none of our shows have left.

Not yet, anyway.

Instead of discussing more new building requirements and higher impact and water-connection fees in a city where almost no one is building anything, Tucson officials should be talking with legislators throughout the state about the need to leave Rio Nuevo financing alone.

Walkup, the city’s titular head and only elected Republican, should lead this effort.

Instead, the mayor has been so absent from any crisis discussions that fellow party members criticize him privately.

Republican National Committeeman Bruce Ash does it publicly on his radio commentaries and in other interviews.

Above all, city officials need to actually do something.

One of them did last month. Five-term Democratic Councilman Steve Leal announced he won’t run for re-election this fall.  

 Contact Steve Emerine or e-mail comments for publication to editor@azbiz.com. Emerine, a Tucson resident since 1960, has run Steve Emerine Strategic Public Relations since 1994. He is a former local newspaper reporter, editor and columnist and served as Pima County Assessor from 1973 to 1980. He is a regular Monday guest on the John C. Scott radio talk show, which airs from 7 a.m. to 8 a.m. and from noon to 1 p.m. weekdays on The Voice KVOI 690-AM. This column appears weekly in Inside Tucson Business.

4th January
2009
written by Downtown Dudette

I came across this the other day while researching Rio Nuevo. I’m republishing (or re-blogging) it in it’s entirety. Hopefully it will give our readers a sense  of history around the original vision of Rio Nuevo.  In looking back perhaps we can see how we got to where we are.  Our original City Manager, Louis Gutierrez’s vision of restoring Tucson’s culture and heritage are still holding true. Withalmost $90m spent what do we have to show for the investment?  We are doing pretty well with the museums, a rebuilt presidio, a rebuilt Fox Theater but not much economic engines that merited the 10 years of TIF financing.

PUBLISHED ON OCTOBER 28, 1999:

Yes On Prop 400

Take A Leap Of Faith On Rio Nuevo.

Yes On Prop 400
Yes On Prop 400
Yes On Prop 400

THE WEEDY ACRES of Rio Nuevo South are among this community’s most valuable treasures.

They sure don’t look it right now. In the last hundred years, a series of destructive enterprises from a brickyard to a gym to a supermarket to a landfill and a bus barn have sorely distressed fields that for three millennia were this region’s Fertile Crescent. The land curving around the foot of A Mountain nourished archaic period peoples as early as 2000 B.C. Hohokams lived here from about 700 to 1200 A.D., Spanish missionaries and Pima Indians arrived in the late 18th century, followed in the 19th century by Mexicans, Apaches, Anglos and Chinese, all of them attracted by the once-flowing waters of the Santa Cruz.

Voters now have a chance to make up for years of abuse of this world-class archaeological site.

Proposition 400, on the ballot November 2, would divert sales tax money to seed a long list of projects on both sides of the river. Plans include a museum complex and housing at the northern end of the Rio Nuevo tract and an outdoor multicultural and family park and restoration of native cottonwoods at the southern end. Over on the east side of the river, a Sonoran Sea Aquarium and a visitors’ center would go in, and a series of public improvements meant to attract a privately financed hotel and an IMAX theatre. Some money would go toward existing downtown museums too, the Tucson Museum of Art, the Children’s Museum and El Centro Cultural, and to the Fox Theatre rehabilitation. New bridges and a shuttle would connect the two riverbanks.

At the top of the list — and the best reason to vote for Proposition 400 — is the restoration of Rio Nuevo’s historic riches.

Prop 400 would divert about $9.5 million to Mission San Agustín del Tucson Cultural Park, and another $2.1 million for archaeological work on the whole tract. The long-planned outdoor park would re-create the Spanish-era San Agustín visita, or mission outpost, including its famed Convento, mission gardens and chapel, along with the 19th century Warner’s Mill and Carrillo house. The much-older Indian sites, including a honeycomb of 2,500-year-old pit houses, would be interpreted in some yet-to-be-determined way. Across the river, at Church and Washington streets, the Presidio, the Spanish fort that was the military corollary to the religious mission, would be re-created.

The Presidioand the river land both are key to what Tucson is now and how it came to be, and Tucsonans for years have talked about bringing them back to life. Yet never before has there been any money to pay for restoration. Now there is.

Prop 400 allows the city a one-time-only chance to hang onto some state tax money, during a 10-year-period, to help pay for the Rio Nuevo projects. Called Tax Increment Financing (TIF), the plan would allow the city to keep about $60 million in state sales tax dollars, money that ordinarily would go back up the road to Phoenix. As written by the state legislators, this gift to the city requires a match-up of Tucson dollars, to be gleaned from city sales taxes and about $1 million a year from the general fund over the 10 years. Thus the public funds freed up by the measure amount to about $120 million. The city could take out bonds against this future expected income to get started on construction; the estimates are that $80 million would go directly to the Rio Nuevo projects, about $40 million to debt service.

But the Prop 400 money alone is not enough to pay for it all. It’s seed money that would help generate grants and private donations. The non-profit museums, including the aquarium, a new Arizona Historical Society Museum, a Flandrau Planetarium metamorphosed into the broader Universe of Discovery, and a National Museum of the American West, would have to raise their own cash in a 2-to-1 or 3-to-1 match before they’d be eligible for the TIF construction money. Thus, though a positive vote would unleash $120 million in public money, the whole public-private project likely would release some $320 million into the downtown.

That’s a lot of cash, and a lot of projects. The sheer size of the thing has some critics worrying about a repeat of urban renewal, the disastrous 1960s juggernaut that leveled the city’s historic heart. This is different. Urban renewal deliberately erased the city’s oldest neighborhood, a Mexican-American barrio, and replaced it with a bland, all-American cluster of half-baked modernist buildings. The point of Rio Nuevo is to honor Tucson’s birthplace, its history and cultures. And there simply aren’t any residents to evict or houses to level on the empty tract; the only thing being pitched out is the bus barn, whose bouncing buses are by any measure a bad use of hallowed ground.

Plus, neighborhoods in Tucson have more power than they did in those long-ago days, as Menlo Park’s fierce — and effective — opposition to the earlier Daystar proposal for Rio Nuevo demonstrated. We can expect extreme vigilance of the unfolding projects not only from the neighbors, but from the smart professionals, including archaeologists, historians and hydrologists, on the Tucson Origins Task Force. The main mayoral hopefuls, Democrat Molly McKasson and Republican Bob Walkup, have likewise pledged to keep a watchful eye on Rio Nuevo. The development authority that will permit the projects one by one is headed up by architect CorkyPoster, who’s shown fidelity to Tucson’s history in such projects as the Stone Avenue Temple and the Dunbar/Springs School restoration, and Ruben Suarez, who has the virtue of being both a Menlo Park resident and a former city budget director. These two, and others on the board, will serve at the whim of City Council, allowing another level of checks and balances.

The current plan calls for a reasonable number of gift shops and eateries in the museum complex, and a Native American market in the multicultural park. Those are fine. But let it be known now and forever that Daystar, with its 768,000 square feet of stores and multi-screen cinemas, was a wildly inappropriate scheme, an insulting monument to consumerism that would have been the worst possible neighbor to the historic sites. Not to mention that it would have about killed the Congress Street retail district. A few politicians and business types are still grousing about the loss of Daystar, but it was so far off the mark that it’s inconceivable anybody who cares about Tucson could have supported it. Some things in life are not about getting and spending, and Tucson’s outstanding archaeological site is one of them. The mayor, City Council and city manager were absolutely right to reject Daystar, as well as a proposed Colonial Tucson theme park. Why build a fake one when you’ve got real historic Tucson right next door?

If City Manager Luis Gutierrez had to draw a crazy-quilt funding map to avoid putting the Daystar mega-mall at Rio Nuevo, then so be it. It’s fine by us if some portion of the future sales taxes from El Con and Park Place malls trickles back downtown. Far better to preserve the Old Pueblo’s heritage than to invest it on sprawl on the city’s edges.

And besides, maybe, just maybe, real things, like an archaeological park and quality museums, will finally bring the tourists and their dollars downtown. It’s easy to dismiss heritage tourism as just the latest buzz term in the travel trade but Tucson’s experience shows that it makes economic sense. A new study commissioned by the Tucson Pima Arts Council says that the city’s museums and cultural groups generated $245 million in economic activity in Tucson last year; it estimated that the new Rio Nuevo museums could contribute an additional $76.8 million annually.. Two of the most popular Tucson attractions right now, the Arizona-Sonora Desert Museum and Mission San Xavier del Bac, are authentic places that speak to the region’s ecology and history. Mission San Agustín delTucson Cultural Park, with its 3,000-year timeline of human habitation on a single, fertile spot and its splendid archaeological resources, could easily rival those two. It could be one of the best things that happened to Tucson in a long, long time. Maybe not as great as those first ears of corn planted along the river in 1200 B.C., but darn close.

4th January
2009
written by JHiggins

A story came out today about a major $200 million investment in the port of San Luis – HERE. You’ve read in this blog that perhaps the one bright spot in our regions economic development future is  creating an inland port. Long beach is over run, deep sea ports are being planned in Guaymas Mexico and Tucson is smack dab in the middle of what is being called the Cana-Mex logistics pipeline.

Other communities are jocking for their share. The pipeline could through mid Texas, New Mexico or head out of Yuma and bypass Tucson all together. If we can pull together a plan, roll out the welcome mat and let the world know we are serious we could enjoy warehouse jobs, light manufacturing facilities and thousands of mid level paying jobs that are much needed in our region.

For this opportunity to materialize we’ll need to court the railroads, relieve traffic on the I-10 (which may include an I-10 bypass through environmentally sensitive areas). We’ll need to fast track the building process for companies looking to set up light manufacturing. In short we’ll have to show the world that we are ready for the chance to change our future. I for one don’t want to be looking back in 10 years and see the opportunity passing us by….literally.

About San Luis HERE

From the Yuma Sun;
With more than $200 million being invested in infrastructure improvements to the area, San Luis is beginning to shine with its potential as a logistical hub for the region, said Andrea Bereznak, border area project manager for the Greater Yuma Economic Development Corp.
Those investments include construction of the new commercial San Luis 2 port of entry and area service highway, both of which are expected to be completed by next fall. Other projects include an Arizona Department of Transportation facility at the new port; the Gary Magrino Industrial Park, to be developed next to the new port; planned improvements to the existing San Luis 1 port of entry; and expansion of the city’s existing industrial park.
“Congestion at the ports is such a huge issue,” Bereznak said. “But there are only two new ports being built in the U.S. One is in Donna, Texas, and the other is San Luis 2, so there is a lot of excitement from companies doing international business.”
That includes U.S. companies that have been having goods assembled in Asia because of cheaper labor there, she said. With the rising cost of shipping the goods back to the United States, “it’s making more sense to do the assembly work in Mexico,” where the savings in transportation more than make up for the higher cost of labor there than in Asia.
That will bring more jobs to both sides of the border, Bereznak said — jobs that are badly needed in San Luis, with its high unemployment rate. Yuma County had a seasonally adjusted unemployment rate of 19.8 percent in November 2008, the Arizona Department of Commerce reported, compared with 13.4 percent in November 2007.
Another project with the potential to affect the San Luis area is the planned development of a port at Punta Colonet, Sonora, and a railroad to carry goods from the Mexican seaport to the United States, Bereznak said.
“That project could have an impact on the area, but it’s unknown how much,” she said. “It will depend on what route the rail takes.”
Bereznak also had praise for the “pro-business, pro-community attitude” of the San Luis City Council, calling it positive for the city’s future.
“It’s exciting to work there, with the confluence of elements that support growth and development.”
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