Rio Nuevo may lose funding on July 1
By Daniel Scarpinato
ARIZONA DAILY STAR
Tucson, Arizona | Published: 02.12.2009  

PHOENIX — Funding for Tucson’s Rio Nuevo Downtown redevelopment project could be gone by July 1.
Skeptical members of the Senate Finance Committee said they didn’t get the answers they wanted from Rio Nuevo’s project director at a hearing Wednesday.
Some said not only did Rio Nuevo Director Greg Shelko fail to outline how the city has spent $60 million in state money, but they said the project seems to have drifted from its original purpose.
As the state faces a $2.4 billion shortfall next year, several committee members said they are interested in possibly cutting off the state dollars to avoid deeper cuts to K-12 education and state agencies when the new fiscal year begins July 1. An estimated $600 million in state money would flow to Rio Nuevo over the 22-year life of the project.
“When you come down here, you better have your ‘A’ game, because we are doing a lot of things we don’t want to do,” said Sen. Jim Waring, R-Phoenix, the committee chairman. “I just think we had to pull teeth to get answers.
“I thought that presentation hurt them a little bit today — I really do,” Waring added.
Some members said they’d like to see the funding cut off next year to help balance the state budget, especially after renewed concerns about a lack of accountability.
Shelko said pulling the state dollars would spell disaster for Rio Nuevo.
“If they want to sink Tucson, I suppose that’s a choice,” Shelko said. “Where would we have the ability to do these kinds of things? We wouldn’t.”
In his testimony, Shelko painted a bright picture of Downtown and argued that it just needs more time, pointing to projects in other cities that have taken 30 years to succeed.
“Downtown is not going to grow in five years; it’s not going to grow overnight,” Shelko said. “It’s going to take a long time.”
But senators were not impressed by the city’s list of Downtown accomplishments, which included a planned city-court complex and a Burger King. And Shelko had trouble citing specific dollar figures the committee requested.
“What we’ve done is allowed this entity to take state dollars at their will, and of course the people of Tucson are going to vote for it because it’s not their money,” said Sen. Ken Cheuvront, D-Phoenix.
The committee took no action, but city officials could find themselves in a position of having to better defend Rio Nuevo. The GOP committee members, in a position to negotiate the budget, are likely to discuss their impressions with colleagues in a Republican caucus meeting today.
“My concern with Rio Nuevo has been that’s it’s very difficult to get a straight answer on anything,” said Sen. Barbara Leff, R-Paradise Valley. “If the city of Tucson wants to use its own sales-tax revenue and put it into Downtown projects, they should be able to do that, but I think the state general fund money should be returned.”
Rio Nuevo is funded through a tax incentive financing district that redirects state sales tax dollars to Tucson for use in the district. Originally approved by voters in 1999, lawmakers extended it in 2006.
But the project and its organizers have faced criticism over the years for what’s been perceived as a lack of progress.
A Star investigation last October, referenced by several committee members, found that of the $63 million in taxpayer dollars spent over the past 10 years, much of the money has gone to plan projects that stalled, including studies, consultants and public relations.
Shelko questioned the “motives” of the Star for running that story and said the city has made all its expenses public, even though it stalled releasing documents to the Star for months.
At times sarcastic, lawmakers grilled Shelko on projects that never developed. In particular, they questioned studying the construction of a Rainbow Bridge over Interstate 10 that would house the University of Arizona science center.
“So, you were going to build a building that was a bridge that sat on top of the freeway?” said Sen. Ron Gould, R-Lake Havasu.
“It was a very unique concept,” Shelko responded. “Unfortunately it costs somewhere well over $300 million and it was an infeasible project.”
Laughing, Waring asked: “So, Mr. Shelko, just to be clear, you spent $9 million and have built nothing? It’s a yes or no.”
“Right,” Shelko replied. In actuality, $13 million was spent studying the science center.
Glenn Lyons, CEO of the Downtown Tucson Partnership, testified he was pleased legislators extended the district in 2006 and that continuing it is important to private-sector growth.
“I’m pleased you’re pleased,” Warring said. “You may be the only one in the state.”
Shelko said after the meeting that the mistake the city made was in “managing the public’s expectations.” And he said he was “proud” of progress so far.
“We’d all like a do-over on some things,” he said. “I don’t think, in a general sense, that the city has mismanaged Rio Nuevo.”
Contact reporter Daniel Scarpinato at 307-4339 or dscarpinato@azstarnet.com.
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