Archive for October, 2010
New audit critical of Tucson’s Rio Nuevo district
By Rob O’Dell Arizona Daily Star Arizona Daily Star
Tucson’s Rio Nuevo downtown redevelopment district was beset by mismanagement, a lack of internal financial controls and oversight that led to a majority of its projects to remain unfinished despite spending $230 million, a much-anticipated audit says.
While the audit conducted by private auditor Crowe Horwath for the Auditor General of Los Angeles is not the smoking gun some had expected, the 76-page report confirms that much of the money has been spent on planning or projects that stalled, money went to projects that while not illegal were not in the spirit of Rio Nuevo’s mission and that the city’s financial record keeping was disorganized, making tracking the spending nearly-impossible.
The audit’s findings mirror those made in Star investigations of Rio Nuevo over the past three years.
The audit is expected to be released to the Rio Nuevo Board, the city, and public either later today or next week, said Rio Nuevo Chairwoman Jodi Bain. The Rio Nuevo Board submitted their final comments on the audit to the Auditor General late this week.
Here’s the link to the Auditor General’s site: http://www.azauditor.gov/
The entire redevelopment mess is a case of:
1. Elected officials that have no idea what they are doing. The Gaylord Resorts people left town (and built in Mesa) for a number of reasons including a provision that required only union labor to operate the hotel, sort of makes you wonder what else is coming out of the woodwork.
2. An original 4 person puppet Rio Nuevo board put in place to rubber stamp.
3. Too many cooks in the kitchen. We’ve now had our 3rd City manager in charge of Rio Nuevo. Each has their own vision.
4. A weak mayor political system that puts tremendous power in council peoples hands. There are 3 council members that have claim to Rio Nuevo and each wanted their piece of the pie. Meanwhile we have a number of dirt lots, plans on top of plans that never got done. Drive west of the freeway and you’ll see how politicians can squander an opportunity.
5. We missed the real estate boom because our process to build (development services and neighborhood input) is so bad it takes forever to get anything done.
6. A business community that is very fractured and weak and can’t come to agreement on anything.
7. A couple election cycles with hotly contested races, including the election of Steve K where an R won in a city with 3 to 1 D’s.
8. An economic downturn that slowed the TIF dollars considerably. Walmart to the rescue!
9. Our largest tourism attraction is the Gem and Mineral show. It brings in $100m per year. The mayor is now saying the gem show will pull out if we don’t build the hotel. Tucson has and will continue to be on their trade show circuit. They like the funky tents and hodge podge of the way Tucson is laid out for them.
10. Our MTCVB has little accountability. Giving them a shiny new hotel should scares the crap out of you. The TCC staff is just shy of inept. The Hilton talked about building their hotel and managing the Tucson Convention center. City Council blocked their plan because it would mean laying off TCC employees. We lost $3m last year on the convention center. Makes you want to give the job of selling this thing to this team doesn’t it.
11. Overbuilt, utlra-competitive convention market. Phoenix is offering 45% off convention bookings thru 2014. Markets around the country have built convention facilities only to find that the size of the market is shrinking as more convention space is coming on line. Classic supply demand issues. With Phoenix investing $650m in their convention center and building a 1000 room convention hotel facility how are we ever going to compete? If a convention is comparing Tucson to Phoenix they’ll look at cost, size, availability, air transportation, attraction’s downtown (restaurants, sport venues, museums etc). We loose on all accounts.
12. Powerful neighborhood associations that allow a couple of crazy ideas like; entire floors dedicated to low income housing, use of a new buildings pools and laundry facilities and requests for community herb gardens as a condition to blessing a development. Those developers that are unlucky enough to have not high tailed out of town are wishing they had, or looking for a politician to donate to.
13. Crazy development agreement terms like giving a $300,000 to a youth facility 5 blocks away from your development as a condition of zoning approval scares sophisticated developers away.
14. Hook ups to a selected few while others are drug through the maze of bureaucracy. Going $15m over budget on an underpass to accommodate a preferred developer or free rent, rent extensions and law breaking gifts to preferred, politically connected people at the expense of others without political clout.
15. Cheap land on the outskirts of our community. Why would someone pay $300,000 for a two bedroom condo when you can pay the same for a three bedroom home with a pool. Quaint, cute, artsy and urban are great but when the decision comes, residents can get so much more for their money away from the city core. Downtown’s died for a reason. Downtown are working when their is expensive land that is locked in, typically near water. Downtown’s work when their is night life and private sector jobs. We have neither.
It’s over, move on and get back to the basics. Set the table for the private sector and focus on reopening the community pools, trimming the weeds in the median and protecting your citizens.
What started as a Hail Mary pass in the last game of a win less season ended last night in a 7-0 vote to stop plans for a tax payer funded $200 million hotel. No one worked harder that Mayor Bob to build a hotel which critics all the while were calling this 535 room hotel;
- too expensive,
- not fitting to our market and
- too politically charged for our current city financial condition.
With the hotel vote last night the Mayor was dealt a political blow that he may not recover from. Rio Nuevo has been a financial and political embarrassment for the City of Tucson and there has been one man at the watch the entire, Mayor Bob. We’ll see if he’s smart enough to realize that the jig is up and it’s time to ride off into the sunset.
The best quote from the O’Dell article from today’s paper:
Only Mayor Bob Walkup proposed something other than rejecting the hotel. He tried to delay terminating the hotel project to give the negotiation process more time, and then he tried to get the council to vote on a Plan B for what to do next, which it rejected. Walkup eventually voted with the rest of the council against the project.
Other losers include, Fred Ronstadt, Tucson’s former councilman, Michael Guyman new government liason for TREO (Tucson’s economic development group), Brent Davis, former Tucson Councilman and Larry Hecker, local politically connected attorney who is 3 and 0 on getting hotel projects done. All three of these people were paid out of the $17 million in feasibility study money by the hotel developer, Garfield Traub. Had the hotel been built Traub would have received a percentage of the $190m construction cost for developing the project.
Congrats to councilman Kozachik for being the canary in the coal mine on the hotel for the past year and a half. Elections have consequences.
Pueblo Politics: Court overturns Arizona’s proof of citizenship requirement for voter registration
Rhonda Bodfield, Arizona Daily Star Posted: Tuesday, October 26, 2010 11:07 am |
The Ninth Circuit Court of Appeals has overturned Arizona’s requirement that people show proof of citizenship to register to vote.
The split decision by a three-judge panel determined that the requirement to show proof of citizenship — passed by voters in 2004 — is not consistent with the National Voter Registration Act.
Associate Justice Sandra Day O’Connor, temporarily sitting by designation, and Circuit Judge Sandra Ikuta, with chief judge Alex Kozinski dissenting, said Prop. 200 creates an additional hurdle, while the national act is intended to reduce “state-imposed obstacles” to registration.
The majority noted that Congress was well aware of the problem of voter fraud when it passed the voter act, and built in sufficient protections, including applying perjury penalties to applicants who lie about their eligibilty.
The court determined Arizona’s polling place photo identification requirement, however, is a minimal burden and does not violate the Equal Protection Clause in the 14th Amendment.
Attorney General Terry Goddard’s office is still reviewing the decision and was unavailable for comment.
Secretary of State Ken Bennett said he does not anticipate that the ruling will make any difference in voting next week, since it wasn’t in place when registration closed Oct. 4.
Bennett said the state plans to appeal the ruling, adding he disagrees the documentation sets up a barrier for registration. “I think it’s an outrage and a slap in the face of Arizonans who are concerned about the integrity of elections,” he said.
I wonder how welcome Sandra Day O’Connor will be in the state now?
TREO hires MPA’s executive director
“Effective Nov. 15, Metropolitan Pima Alliance Executive Director Michael Guymon is leaving to become Vice-President for Regional Development for Tucson Regional Economic Opportunities (TREO).
Guymon has been MPA’s executive director since Sept. 2008, having served as the organization’s first Governmental Relations Director. His career experience includes both the public and private sectors as former Chief-of-Staff to Tucson City Council Member Fred Ronstadt and political consultant to a number of downtown area development projects.
The MPA Board of Directors will be responsible for hiring a new executive director.”
While TREO has lots of different issues(taking credit for work they didn’t do, for one of them), their biggest problem is being content selling a broken region. Yes, I know that the City and County still give them a big hunk of taxpayer dough. Yes, I know that Mayor McCheese and Sharon Bronson sit on their board. TREO’s lack of courage in telling these folks that they have an “ugly baby” is part of the reason that Tucson is slowly becoming an economic Katrina. When Raytheon picked Alabama over Tucson, TREO didn’t even bother to tell their board member, former Raytheon engineer and head cheerleader in chief, Mayor Bob.
The geniuses at TREO got together and said: “Let’s hire a Governmental Relations Director!”. It’s a good idea, but needs to have an independent guy/gal, with some guts to tell the truth on how to fix Tucson/Pima County for business. Especially small business.
1) The man who is a paid consultant for Garfield Traub to help shove the Downtown Hotel down the taxpayer’s throat.
From the Arizona Daily Star (Rob O’Dell, March 30th 2010)
“Among those expected to have some say in whether the hotel will be built:
The former City Council aide was a paid lobbyist for the company when it was trying to win the hotel bid and after it was selected.
He later became executive director at the Metropolitan Pima Alliance, whose members include businesses, developers and governments. The organization, which calls itself, “your voice for reasonable and responsible development,” is expected to make a recommendation on whether the hotel should be built.
Guymon said he disclosed his relationship with Garfield Traub before he took the job and says his contract is basically completed, although he said he will still earn a bonus if the hotel is approved.”
2) The man who sits on Museum of Contempory Arts board, which magically received a $1/year rent at the Fire Station #1 on Church street.
“The purpose of the press conference was to expose a sweetheart deal between the City Council and the Museum of Contemporary Art (MOCA), in which MOCA was given a five-year lease of the old Fire Station One for only $1-a-year. This is a facility worth millions of dollars and will require yearly maintenance costs in the six figures and more than $80,000 in upgrades.”
(check the previous post on the deal: http://tucsongrowup.com/2009/10/)
No doubt Guyman’s insider connections at the City of Tucson will help ensure funding and relationships remain in tact. Over at the County, Guyman doesn’t have the juice. He’s not from the Grijalva or Eckstrom camps so it’s going to be tough. In Oro Valley and Marana, if they are smart, they’ll tell the Tucson centric TREO to hang out on the sideline and bring out the water bottles during the time outs.
Great move TREO, kudos to your organization on remaining the ineffective organization that you’ve evolved into. Give Joe Snell a raise while you’re at it.
On the propositions (my choices in BLUE)
Prop. 106: Would keep federal health-care reform from applying to Arizonans. NO – I’m a yes, this is a far reaching mandate coming out of Washington DC. Obamacare has too many pay offs to pharmaceuticals and hospitals. It doesn’t ‘bend the cost curve’ and the far reaching implications are paralyzing our private sector. Send a message to DC that the voters of Arizona don’t like what’s being forced upon them.
Prop. 107: Would amend the state Constitution to gut any affirmative-action programs, with likely harmful effects on government and school programs. NO - I’m a yes, it’s time we put affirmative action behind us.
Prop. 109: Would amend the state Constitution to include the right to hunt and fish, and give the Legislature control of wildlife management. NO – I’m a yes, tourism dollars and sound management of our natural resources will benefit from this prop. Environmental agendas have hijacked this City, County and parts of the State.
Prop 110: Would amend the Constitution to require that state trust lands be sold or exchanged in a way that protects military installations from potential incompatible uses nearby. YES – Agree
Prop 111: Would create a lieutenant governor position instead of secretary of state. We support the idea, but this proposition has troubling language that causes problems for independents and third-party candidates. NO – I’m a yes, Rose Mofford and Jan Brewer rose to the Governorship through the Sec of State. Let’s run a ticket and know up front what our plan b is. This Accidental Governor stuff isn’t working.
Prop. 112: Would change the petition deadline to give election officials more time to validate signatures before election deadlines. YES – Agree
Prop 113: Would amend the state Constitution to require workers seeking union representation to hold an election, even if federal laws were changed to simply allow workers to sign a card to indicate their support for unionization. YES - Agree
Prop. 203: Would allow people with specific conditions, such as cancer, who have a doctor’s prescription, to legally buy and use specific amounts of marijuana for medicinal purposes. YES – make your own decision on this one.
Prop. 301: Would sweep money from a voter-protected conservation fund, the Growing Smarter program, and allow lawmakers to use the money toward balancing the state budget. YES – Agree
Prop. 302: Would eliminate voter-approved protection for tobacco-tax revenue now dedicated to early childhood education and similar programs. This would allow the Legislature to divert the money to other uses. NO - I’m a yes.
Prop. 400: Would increase the sales tax within Tucson city limits by a half-cent per dollar; the revenue would go to fund police and fire protection, parks and transportation. YES – I’m a NO. This City government hasn’t demonstrated any trust with the tax dollars so far, why on earth would we give them more?
Prop. 401: Would change the Tucson City Charter to give the city manager hiring and firing power over his immediate deputies; would make the mayor’s powers equal to those of City Council members; would increase mayor and council salaries and would eliminate alternating terms, so the entire council and mayor would be elected at once. YES - Agree, we have to start trying something. I preferred a strong mayor because the City Manager form of government can create super manager similar to Pima County. I’m not nuts about the raise but you get what you pay for. Ward only was a mistake, without ward expansion. More options to deal with bureaucrats is important. They run the show.
“Politicians of all stripes like to celebrate “small business” while running for office, but the reality is that they often strangle entrepreneurs once they get in power. Read the Institute for Justice study and you’ll better understand why the business of America is no longer business. It’s bureaucracy.
When most people think of occupations requiring fingerprints and police reports, corner bookshop owners don’t spring to mind. Try telling that to Los Angeles, where many used booksellers are required by law to get a police permit and take a thumbprint from every 40-something trying to offload his collection of French poetry.
That’s one scene from a study to be released this week by the Institute for Justice, which has collected dozens of examples of regulations choking economic growth by taxing and over-licensing small businesses. In a survey of eight major cities, the study found that entrepreneurs routinely face obstacles of bureaucracy and red tape that deter them from otherwise promising opportunities.
The City of Angels, which had a 13.7% unemployment rate in September, has licensing mandates for every profession under its permanent sun. Anyone wishing to make a living by hanging wallpaper, building fences or trimming trees must first get a by-your-leave from the city in the form of a “specialty contractor” license and a background check that can take years. The same goes for L.A.’s aspiring fashionistas (garment manufacturer license), Washington D.C.’s sightseeing guides (tour guide license), and Miami flower vendors.
In many cases, the regulations were promoted by existing business owners who want barriers to new competition. In Washington, D.C., an interior designers guild succeeded in lobbying the city to require that all new designers take a 13-hour test and get a special license merely to reorganize your living room. In Newark, New Jersey, would-be barber shop owners must prove they’ve spent three years working in someone else’s hair cuttery before they can start their own. Even then, the city’s laws bar them from serving customers on Sunday and restrict working hours on other days of the week.
In addition to the economic cost of such inanity, the regulations take a personal toll on many aspiring small business owners, often immigrants who thought America was still a land of opportunity. Consider the case of Muhammed Nasir Khan, who lost most of his family’s savings thanks to Milwaukee’s messy regulations and the whim of a local alderman.
According to the Institute for Justice, Mr. Khan, who once headed Pakistan’s antiterrorist operations, sought political asylum in the U.S. in 1995. By working in restaurants and selling the jewelry in his wife’s wedding dowry, he and his family saved enough money to open a hot dog stand in a fixer-upper building on a promising corner of downtown. But after hundreds of hours getting everything ready, his shop was closed by the city on its first day of business.
Despite following all the rules, his food license was retracted at the request of Alderman Robert Bauman, who suggested he would rather see a place “with a little class” in the location, instead of Mr. Khan’s restaurant. Reopening Judy’s Red Hots, he argued, would somehow encourage crime and disorder and stall the redevelopment of the community. The real crime is how easily an entrepreneur’s dream was destroyed by the caprice of a politician and the regulations that empower him.
Politicians of all stripes like to celebrate “small business” while running for office, but the reality is that they often strangle entrepreneurs once they get in power. Read the Institute for Justice study and you’ll better understand why the business of America is no longer business. It’s bureaucracy.
Don’t believe us? Remember the “Small Business Prolomation” the week before Tucson City Council elections?
Oct. 29–The case of a downtown businessman who is being displaced to make way for a hip new restaurant has become the latest symbol in an election fight painting the current City Council incumbents as anti-business.
The saga, which left Councilwoman Nina Trasoff saying she can’t be held responsible for a conflict between two private businessmen, began Monday when Metropolis salon owner Emery Nicoletti discovered the space he’s leased for 13 years will have to make way for An Congress, by former Sakura owner Kwang C. An.
Nicoletti, who said he was shocked when he found out about the impending eviction from a reporter that morning, confronted Trasoff, An and property owner Scott Stiteler at what was supposed to be a media briefing to unveil the new plans for the block.
Nicoletti sent a letter Wednesday to the mayor and council, protesting that he had sunk thousands into the 400-square-foot, two-story salon at his own expense and recently closed an East Side location to consolidate into his downtown location. He said he had been told he would get a three-year lease and now isn’t sure he can get another location ready on time, since the eatery construction is expected to start in March.
He said he should be rewarded for sticking it out, even as construction clogged the streets and shut down highway exits.
“Others are rewarded with free rent,” he wrote to the council, in a reference to cut-rate deals some arts groups and business owners have received to jump-start revitalization efforts. “I am awarded with walking papers.”
“It only took a camera crew and a tasteless press conference to dash my hopes and dreams,” he wrote in closing. “Thanks.”
Ever since, Trasoff’s opponents have used the opportunity to mock the council’s proclamation a day later that the city will become more business-friendly.
“Nina Trasoff showed up like a cheerleader with pompoms to make a big deal about Mr. An coming downtown,” said national Republican committeeman Bruce Ash. He conceded that An is a big fish for downtown. “The problem is she talks a lot about being business-friendly, but this case just shows that the way they’ve operated has been anything but business-friendly.”
Critics say if Trasoff had encouraged the move, she should have smoothed the way by letting other business owners know they’d be affected and helping to mitigate those impacts.
How’s that hope and change working out for you? If you are a business owner or work in the private sector in Southern Arizona, you are about as rare as a Talus Snail or a Hexalectris revoluta orchid, both supposedly found at the Rosemont Copper mine site in the Santa Rita Mountains.
In addition, Mr./Ms. Private Sector Masochist, you are in the middle of the Great Recession.
Not since the Great Depression have we seen such tough times. Unemployment is the second highest we have seen since after Ronald Reagan took office as president and worked to correct the course of the country. Reagan saw 10.8 percent unemployment and we are hovering at near 10 percent. At a town hall in September, President Obama offered this about the recession: “The challenge is that the hole was so deep that a lot of people out there are still hurting.” Ask any kindergartner what you do when you are in a deep hole and they’ll tell you — stop digging!
In this election, there are opportunities at the local, state and national level for you to stop digging.
School board races often are overlooked but the conditions of our schools are touted as critical to attracting new businesses. Arizona’s second largest school district, Tucson Unified School District, has a half-billion dollar budget and two seats open on the school board. Raul Grijalva was on the TUSD school board in the early 1970s and went on to the county Board of Supervisors and then Congress. This year he’s in a fight of his life to hold on to that congressional seat due in large part to his call for a boycott of the working people in his district.
Another Grijalva, his daughter Adelita Grijalva, is up for re-election to the TUSD board promising more of the same. More failed attempts to pass bonds and tax overrides, more chatter around ethnic studies while dropout rates rise.
Meanwhile, the City of Tucson is asking you for another half-cent “temporary” sales tax in Proposition 400.
Would you rather have money in your cash registers or at City Hall? Right, we’re sure they’ll steward taxpayers dollars with more accountability and transparency this time around, too. We just concluded our “Rio Nuevo Reality Tour” last week. The tour made us feel even worse for city taxpayers. They were not only robbed, but tied up and punched in the face. The people who did that don’t deserve one more dime.
Arizona holds the dubious distinction of one of the most conservative states in the country. This year’s Republican-controlled Legislature and executive branch brought us SB 1070, gun freedoms and the ability to enjoy sparklers on the Fourth of July, or any other day for that matter, after Dec. 1.
The merits of these advancements can be argued. This next Legislature will more than likely have Republican super-majorities. We encourage you to vote for candidates that will get Arizonans back to work. Businesses are escaping California but they’re heading right past Arizona for Texas, which is experiencing more job growth than all of the other 49 states combined.
We encourage the Arizona Chamber of Commerce and Industry and business leaders to support legislators who pass policies to capture some of that job growth. Ideas such as a 10-year reprieve from state capital gains taxes and elimination of the personal property tax that continually taxes manufacturing businesses for their machinery. We’d like to see tort reform, equalization of the personal versus business property tax rates, and a change to the annexation laws around the state. That’s a lot to ask for, but if you don’t ask, you don’t get.
At the federal level, the pain you are feeling right now is directly related to uncertainty coming out of Washington, D.C. Obama inherited a mess created by the Bush/Cheney White House and bloated Republican Congress that fought for tax cuts but spent wildly. The Democrats lurched the country too far to the left too quickly. The merits of the Troubled Asset Relief Program and stimulus money can be debated. The regulatory controls on the financial markets and Obamacare are directly to blame for the continuation of the misery you’re feeling.
Ask your fellow business owner or your local physician of these programs’ effects and neither can answer the question. When there is uncertainty, investment stops and everyone waits for stability. Perceived or real, the mixed messages are keeping the private sector on the sidelines. Check the votes of our two existing representatives in Congress the next time you wonder why this recession is still going on.
Get ready for a paradigm shift after Nov. 2.
Locally, leaders in the City of Tucson will be forced to make some tough decisions.
At the state level, Arizona will continue being tough on immigration or work to divest ourselves from the growth boom-and-bust cycles.
In Washington, another party will take control of one or both houses.
Research, then remember to vote and mail in your early ballot or head to the polls Nov. 2. This election is about the biggest you’ll see for business since 1980.
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