Archive for June, 2009

Wake Up Tucson and Tucson Electric Power teamed up to promote TEP’s new Bright Solutions.  The new program which launches today encourages Tucsonans to put forward thier ‘bright solutions’ to save energy. View videos from Mayor Walkup, Bishop Kicanas, Congresswoman Gabby Giffords and other local political, entertainment and business leaders - HERE.

The hits just keep on coming over in California. We’ve blogged about it many times before. California is in a mess and working hard to drive out high net worth individuals and businesses of all sizes. Hope those fleeing California are taking a look at Arizona.

From Real Clear Politics, Carol Platt Liebau California’s sales and gas taxes are the highest in the country - and it has the highest vehicle license fees and the second-highest top-bracket income tax, too. Its corporate tax rates are the highest of all Western states, and for the fourth year in a row, a survey of 543 CEO’s found that California’s toxic combination of high taxes and intrusive regulations made it the worst place in the nation to do business. In fact, at the real root of California’s fiscal misery is the profligacy of arrogant, big-spending, left-wing legislators, who have treated taxpayers as if they exist only to support the government.

In fact, at the real root of California’s fiscal misery is the profligacy of arrogant, big-spending, left-wing legislators, who have treated taxpayers as if they exist only to support the government. Their attitude was exemplified in a recent statement from state assemblywoman Noreen Evans (D-Santa Rosa), chairman of the state Budget Conference Committee, repudiating the governor’s call for the state to “live within its means”:

Well, there is this mantra out there - “live within our means” - and while that sounds really nice . . . and it sounds really responsible, it’s meaningless. Our means are completely within our control . . . We have just given away huge corporate subsidies in February; we have given away other tax reductions over many, many years; we’ve created tax loopholes; in good times, we routinely give away taxes, and then in lean times we never replace those tax deductions or close those loopholes. . . . So “live within our means” doesn’t mean anything. The fact is, we have a state with a population that have [sic] needs that we have a moral obligation to provide.

They don’t call it the Green Room for nothin’

June 29th, 2009 by downtown

The DTDC/Rialto saga has taken another bizarre turn, as the developers of Downtown Tucson Development Company-Don Martin and Scott Stiteler-have demanded the payment of back rent for a small building on Broadway behind the Rialto Theatre used as a “green room” by visiting performers.  The amount of back rent that DTDC is demanding approaches $40,000.

Don Martin told the Arizona Daily Star’s Rob O’Dell last week, just days after the City Council voted to delay approval of the Development Agreement with DTDC, and DTDC said that it was pulling out of further negotiations, that he figured the deal he and his partner have offered the Rialto-$15 per square foot-is generous because it is only 75% of “fair market value” of $20/sq.ft. 

For a professional opinion on Martin’s estimate of fair market value, O’Dell sought the input of “Mr. Downtown”-Buzz Isaacson, who has put more downtown property under lease than anyone else in the last 25 years.  Now a first vice-president at CB Richard Ellis, Isaacson is quoted in last Tuesday’s article by O’Dell, saying that there is much variability in downtown retail rents. 

Isaacson said that antiquated retail space downtown can rent for as little as $8 or $9 a square foot, while lease rates for newer and more functional space can be $23-$25 per square foot.  Think Café Poca Cosa-type space on the upscale end.   Think “Downtown Wigs” on Broadway on the other end. 

Which end of the downtown retail spectrum do YOU think the Green Room is closer to, in terms of real market conditions-$8/sq.ft., or $23-$25/sq.ft.?

While the impact of the DTDC deal on the operations and sustainability of the Rialto Theatre has grabbed the headlines, other aspects of the deal deserve even more scrutiny and suggest important policy questions:

• Is offering free land to be developed at an unspecified time in the future the best way to incentivize current development?
• Is the value-for-value tradeoff realistic?  Is the City getting equal value to what it is giving away?  Is it important that the City get equal value?
• What assurance is there that DTDC will actually develop the properties it is being given-rather than sit on them indefinitely or flip them for a profit?
• Is there legal recourse for the City to take back the land it gives to the developers if they don’t perform in a reasonable period of time?   The last thing we need is a repeat of the Thrifty Block debacle. 

Late-Breaking Development!

In a Sunday afternoon email to his fellow Downtown Tucson Partnership Board members, attorney Michael Crawford, the president of the Rialto Theatre Foundation, asked that the DTP consider approving a resolution requesting the City of Tucson/Rio Nuevo to “attempt to purchase the 4,000 square feet the Theatre needs to perform its essential functions and if those discussions do not result in the purchase of the property or if during those discussions the owners of that property take action against the Theatre that threaten its existence, then the City should move for immediate condemnation of the property.”

This request will undoubtedly put the Partnership’s leadership group-Steve Lynn, Larry Hecker, and Glenn Lyons-in the awkward position of having to decide whether or not to honor Crawford’s request to ask the DTP board to either support the City’s intervention on behalf of the Rialto, a Rio Nuevo asset, or hold out hope that a development agreement with DTDC that might involve a resolution with the Rialto can still be salvaged.  The decision hits closer to home for DTP than just choosing between Doug Biggers, Michael Crawford, and the Rialto on the one hand, and Don Martin and Scott Stiteler on the other, however.

In effect, the decision to agendize this issue would force DTP to either support the Rialto’s position, or support the position of Council Member Nina Trasoff, which is essentially that the development agreement with DTDC as presented two weeks ago is fair and should have been approved.  Trasoff said subsequently that the Rialto Foundation was being “selfish” with its demands of DTDC. 

The awkwardness for DTP goes beyond not wishing to antagonize an elected official.  Trasoff is a non-voting member of the DTP Board of Directors and was one of the founders of the organization in 2007, and has close ties with incoming Board President Larry Hecker. 

My guess is that DTP CEO Glenn Lyons will be asked to broker some kind of deal.

Come on guys - enough is enough.  How to ruin you political career 101. A great top 10 list….

Antenori and Farley were on Arizona Illustrated back in March (at 9:29) talking about the State Budget. Farley relayed a story about his young daughter coming home one day from school sad over a favorite teacher that had been let go due to budget layoffs. Antenori responded that state cuts to education to date have been minuscule and the real reason for TUSD’s layoffs were caused by 1600 less students choosing charter schools or moving away.  The drama was in full swing from the Farley camp.

It appears that Farley’s up to it the high drama again. This time Scarpinato took a swipe at him.

Better than the big summer blockbuster.

Dry eyes in the House…

Looks like the city of Tucson’s 2% increase in utility taxes is causing hardships in other government entities.  It has reported that the cost to Pima County is $600k plus. The article below shows the TUSD hit is $650k plus (directly from the same budget that teachers get paid from). 

We haven’t found direct data on the cost to the UofA, Pima College, Federal Government and the State of Arizona facilities but you can imagine it’s not chump change.

Where does Pima County, TUSD the UofA and the State of Arizona get their revenues to pay for the increased utility taxes imposed by the City of Tucson?

From RobO’Dell at the Arizona Daily Star

The Tucson Unified School District will have to pay an extra $655,000 a year in higher water bills, garbage bills and with the 2 percent utility tax on electric bills and gas bills. Those increases do not include the 2 percent extra it will pay on all its landline phones and cell phones, which hasn’t yet been calculated.

The added utility costs come at a time when school districts are struggling to balance their own budgets after the Legislature cut $133 million from K-12 school funding earlier this year, and the state budget for the next fiscal year, which has not been approved by the governor, would take another $220 million from public education statewide.

Bonnie Betz, chief financial officer for Tucson Unified School District, said the extra costs to the district will affect district operations.

“We’ve planned for the increases,” she said. “But every time we have an increase in utility cost we have to take it out of the organization somewhere.”

Still, Betz sympathized with the position the city finds itself in. “It’s a bad time. We’re all having trouble,” she said.

Someone with a video production experience put up a post on AZ Starnet that’s worth a read. The story is on the City of Tucson’s $820,000 journey into movie business. Apparently based on stock footage, video production market rates both locally and from national firms and video editing techniques we could have got the same 15 minute film from local access Channel 12 for just under a grand.

Nothing really surprises me anymore about Tucson’s leadership.

229. Comment by Don M. (saffronbindy) — June 17,2009 @ 4:37PM
Ratings:   -1 +10
Loose ends…
The more I look at this video clip the madder I get. It is horrible. I’ll get into more technical details just later.
I’m most PO’d that the city spends taxpayer money for the Tucson Film Office every year to bring films here. We OWN them. Why not use them? Same for Tucson 12. Nobody watches them, but they do produce very pretty video and win awards for it. We pay for every cent of them. We OWN them. Same for whoever shoots the videos for the Desert Museum. Some of those are nothing short of spectacular. Why not find out who that is? Strangely, someone told me it was really Tucson 12 who shoots the Desert Museum videos, which doesn’t surprise me.
Next, the cost. I spent some time today calling around. Produced locally a 15 minute promotional video runs between $30,000 and $50,000. From the national companies it runs between $200,000 and $300,000. Not $820,000. We got took, big time.
Then there is the $70,000 “oversight fee.” I mentioned this to one of the national companies and the person just laughed and said I was being “milked.” If you contract a video with any money behind it the video company gives you a full-time person to oversee your project. You and your employees have to do nothing. Even the smaller local companies will do this, but they will be part-time. Then there is the time deal. I asked all how long it would be before I got my video. Five years? Three? Two? Our video project has taken five. They all work on about the same schedule. Forty-five to 60 days for the first edit to be delivered, and about 90 days for the final product.
Now the technical part. Being born and raised in Tucson I was annoyed that so much of the video (most of it, actually) was shot in Cochise and Santa Cruz counties. As I looked at the video it hit me. This was stock footage spliced together. I knew this because of the edits, and the fact that some of the cactus pictures had types of cactus we don’t have within 200 miles of here, and the cow herding picture had black cows in it. We don’t have black ones. Ours are brown.
This is the technical part. Splicing stock footage together is hard. Takes a good video company to do it. You can see this yourself. When a scene shifts, from one clip to another, the video editor makes sure the colors in the first few seconds of the clip just shifted to more or less match the colors in the clip just shifted away from. This makes the transition easy on the eye. This video for Tucson is almost a tutorial in how not to do do scene shifts. One scene shifts from a man on horseback which is 85% pure white to another shot at night which is 90% pure black. Your eye cannot adjust that fast, and you will miss the first part of the second scene. Sloppy editing. Go to a new-release Hollywood movie and look at nothing other than the scene-shift colors. They will be perfect. They are perfect because they now use software to manage colors across scene shifts. If it shifts abruptly, it’s because the director wants you to notice it.
I started looking for where the stock video might have come from. I found some of it. The black cows live in Colorado. You can buy your own video of the black cows. Same cows, same cowboy, same meadow, same mountains in the background. But is will cost you $500 to license it.
We’ve been ripped off. For only $100,000 I would have been willing to put together a video just as good as the one the city bought. I would buy stock footage and download it. Stuff it into my movie maker software which can write broadcast-quality output, and deliver it. I would never leave my house.

We’ve covered the California - Texas differences (HERE, HERE, HERE, HERE and HERE) on this blog quit a bit.  As California continues to raise taxes, regulate industries and put in roadblocks to business, Texas took a right turn in the early 2000’s. Texas did did crazy things like tort reform, reduced regulatory requirements and upgraded their tax system.  As California loses business Texas is adding them.

The Wall Street Journal ran an opinion peice today about trial lawyers attempt to push back on tort reform gains. After spending $9 million and introducing 900 bills into this years legislature the lawyers haven’t been too successful.

The best line in the article is:

Speaking of the economy, it’s notable that Texas created more new jobs last year than the other 49 states combined. Texas’s low tax burden is one reason. But also important is a fairer legal environment in which companies are less likely than they were a generation ago to face jackpot justice.

A few months back Rep. Antenori at the request of the Green Valley Chamber of Commerce, took aim at the MTCVB for lack of love going down Green Valley way. Antenori worked up a bill to allow funds to be diverted to the GV Chamber. The bill was stopped and appears a deal was struck.

(From Green Valley News - Follow below link)

Pressure helps bring tourism dollars to GV

By Daniel Newhauser, Green Valley News

Published: Tuesday, June 9, 2009 7:17 PM MDT
Green Valley will see an influx of money to help spur tourism thanks to months of negotiations and pressure from a bill that would have changed the way hotel bed-tax money is doled out.
In an agreement with the Green Valley Sahuarita Chamber of Commerce, the Metropolitan Tucson Convention and Visitors Bureau, which receives 3 percent of county bed taxes from hotels in unincorporated areas, will use a percentage of tax money that comes from Green Valley hotels to promote tourism in the community, said Jim DiGiacomo, chamber president.

“It’s a milestone for the chamber and this area,” he said. “It’ll bring more people here and, in turn, it helps businesses.”

Rep. Frank Antenori, who represents Southern Arizona and Green Valley, mediated the discussions between the two organizations in his Phoenix office. He said the contract stipulates that the visitors bureau will calculate the total bed-tax revenue collected in Green Valley and give one-third of it in the form of a grant to the chamber to use to promote tourism.

“We sat down, hammered it out, and came up with a deal,” Antenori said. “Now, (Green Valley is) going to be able to pull the resources of all the hotels and resorts in the area and get a good marketing effort together.”

DiGiacomo said the money will be used to pay upkeep for the chamber office as well as produce and distribute pamphlets showcasing tourist attractions and beef up online promotions.

The agreement also gives the chamber representation on the visitors bureau’s marketing committee and a chance to be on the board of directors, he added.

The change will take effect July 1 and last for three years after which both parties have the option to renegotiate.

Jonathan Walker, the Tucson visitors bureau’s president and CEO, said Green Valley should see more tourist spending as a result of the efforts.

“We’re going to figure out how to work hand-in-hand to better market Green Valley as a tourist destination,” Walker said. “We’re trying to do something positive for the Green Valley area.”

He added that the bureau has similar agreements with other Arizona communities.

The change comes on the heels of a now-dead state bill that, if passed, would have change the way bed-tax money is divided.

Currently, Pima County levies a 6 percent tax on hotels and motels in unincorporated areas such as Green Valley; the tax netted $8.7 million in fiscal year 2007-08. Half of that, per state law, is designated for the county’s “recognized tourism promotion agency.” The only such agency in Pima County is the Metropolitan Tucson Convention and Visitors Bureau, whose Web site — www.visittucson.org — describes it as “the chief marketing agency for Tucson and Southern Arizona.”

With four major hotels and a number of bed-and-breakfasts, Green Valley pays a significant amount of money into the bureau’s funding stream but doesn’t get its fair share back, said Randy Graf, chair of the chamber’s governmental affairs team.

“We felt that most of that was being concentrated in Tucson itself. We didn’t feel like enough of it was coming here,” he said. “The word ‘metropolitan’ in there sort of indicates that they are working for the greater Tucson area.”

So chamber officials proposed to Antenori HB 2487, which would have allowed more than one recognized tourism promotion entity to receive part of the distribution from the county. That would give the Green Valley Sahuarita Chamber of Commerce, or any number of agencies from unincorporated areas, the opportunity to get a piece of the county funds.

Instead of seeing the bill through the Legislature, however, chamber officials met with visitors bureau officials several times since March to negotiate a way to share existing funds, Graf said.

“Bills like this can get people’s attention, bring stakeholders to the table,” he said. “If they can get together, negotiate, then the bill is no longer necessary.”

After the deal was struck, Antenori said, he killed the bill.

“The bill had its desired effect, which was to basically level the disparity in how the bed tax was done,” Antenori said. “I think everybody wins. In the long run, I think it’s going to pay off big time for Southern Arizona.”

And he added that the agreement could serve as a precedent for other unincorporated communities: If they organize chambers of commerce and a solid marketing plan, they could appeal for a chance to get funding, too.

“That’s a fair way to do it,” he said. “I don’t see what’s wrong with that.”

dnewhauser@gvnews.com