Posts Tagged ‘Rio Nuevo’

Garfield Traub Proposal Not In Tucson’s Best Interest

In another apparent attempt to show the Legislature in Phoenix that there is some positive movement in Rio Nuevo, the Tucson City Council has voted to approve the development agreement presented by Garfield Traub.  The Counsel has a history of taking precipitous steps which unnecessarily cost taxpayers money. The bond sale last year that took an extra $18 million in interest debt from citizens’ pocketbooks is a prime example. Now they have voted to guarantee a $240 million debt without a final guaranteed maximum price (GMP) or a funding model that will be in effect once that GMP has been determined. Fiscal prudence, especially while wrestling with a significant budget shortfall, would indicate the wisdom in deferring this decision until Garfield Traub was in a position to better identify the true cost of the project, identify a specific funding model and allow the City to assess whether gambling on the proposal with taxpayer guaranteed debt made sense.

In April 2007 the City Council received completed studies and endorsed a redevelopment plan as a new energy for a new place. Greg Shelko (downtown development director) described the committment. “The mayor and council have bought into building these buildings (the arena, hotel and TCC expansion). The issue now is not revisiting the projects, but how to finance them.” (May 2008)

That plan involved a process that included prestigious consultants, local business input and neighborhood involvement.  It clearly laid out a concrete vision and method to achieve the “Big Three” – hotel, arena and convention center.   Years (and millions of taxpayer dollars) later that plan has been pushed aside in favor of a new idea.   No new energy and no new place.

What makes this vote even more curious is that it is taken while there is a “shovel ready” project sitting, ready to go, that would put the taxpayers at no financial risk. That is the remodeling of the Hotel Arizona.  It is anticipated that that project would be profitable to the City nearly immediately, would not force the City to guarantee long term debt on behalf of the taxpayers, would provide remodeled rooms under a major hotel name brand at approximately 1/2 the room rate the Garfield Traub project is requiring, and would have those rooms remodeled in time for next spring’s Gem & Mineral show.

The Garfield Traub proposal admits to the need for “additional revenues” in order to make their own projected debt service (the comfort of a 1 1/2x debt service level of support). Those additional revenues will come from a 6% transient tax and a 2% surcharge on guests at the Sheraton. That money would otherwise be available to the City to fund core priorities such as public safety, road maintenance and transit needs. In a time of tight fiscal constraints, giving away general fund money on a real estate deal that is based on uncertain final costs is unsound financial management. This proposal may make sense in the future but with current market conditions it is doomed to failure.

Unlike the plan presented three years ago, the Council is now relying on quick, one-shot successes. To revitalize downtown the leadership of Tucson needs the entire downtown region needs to be viewed in a holistic plan going forward. We sit atop ancient water and sewer lines. We have no plan upon which to base the eventual capacity requirements. We have no plan upon which to determine where and to what extent we will need power, telephone service, fiber optic, water, sewer – where will there exist aesthetic water elements that will call upon more capacity, where will we build the wide, well-lit walkways with drought resistant foliage to provide shade and to support artisans, and families who will visit such a well thought out entertainment district? Will we install the modern street car tracks on top of our present infrastructure and later be required to tear out those tracks in order to upgrade the systems now in place?

If presented with such an holistic plan, the Legislature in Phoenix would see that the City is finally moving forward with a plan, phased appropriately, has taken the mid-stream step of remodeling a moderately sized hotel to anchor further business development in the downtown area, and on that basis provide sales tax revenue to fund the cultural elements of Rio Nuevo going forward.

It is not too late to rebuild downtown Tucson.  Now more than ever Tucson needs Leadership.  The Council vote to embrace a risky, poorly-financed hotel deal is a step in the wrong direction.

Steve Kozachik, Ward 6 City Council candidate.

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Don’t Rock the Leaking Boat

By Donovan Durband

Two days after State Representative Frank Antenori warned the Rio Nuevo District Board not to rock Rio Nuevo’s boat by obligating Rio Nuevo or its TIF revenue stream to any contracts or projects prior to the Legislature’s passage of the State budget—which would include an amendment pertaining to the disposition of Rio Nuevo—an article in the Arizona Daily Star demonstrated the precariousness of Rio Nuevo’s position in the State Legislature.

The Star article told of a proposal in the House Appropriations Committee to redraw the TIF district’s boundaries to exclude the area containing its two cash cows—Park Place Mall and El Con “Mall”.  The proposal was roundly criticized by Southern Arizona legislators from both parties and from both houses of the Legislature.

Rep. Antenori vowed that the proposal was an error that would be fixed with an amendment to be offered by Senator Jonathan Paton of Tucson.  It would need to be fixed if there is any chance to capture substantial revenues to repay the bonds that Rio Nuevo has already sold or to build the infrastructure that is needed in Downtown or, more remotely, to build the museums and cultural facilities that were part of the 1999 Rio Nuevo ballot measure, the Master Plan adopted in 2001, and a Funding Allocation Guide approved by Mayor and Council in May 2007.

The Appropriations Committee scare amply demonstrates the wisdom of following Antenori’s advice to sit tight, be quiet, and do nothing that would provoke the rest of the Legislature—whose extreme disappointment with Rio Nuevo is now well-documented—into killing the whole thing.  Antenori, Paton, and Tucson-area members of both parties in the Legislature are trying to fend off those from other parts of the state that would just sacrifice the TIF (except for the future revenues needed to repay the December 2008 bonds) to the State’s ginormous budget deficit.

I was involved in the effort to secure the extension of the TIF in 2006, and I saw first-hand what a hard sell it was.  The district boundaries were a sore point then, and they continue to be today.  The Legislature did not trust Tucson city government to make the project happen then, and trusts it even less today.  Justified or not, that’s the way it is.

After the TIF extension was signed into law, I proposed that the TIF be prioritized to leverage private commercial investment through expenditures on infrastructure, so that we could grow our TIF in downtown, creating much more funding than just what the malls produce, so that we could build ALL of the projects that were in the master plan. 

Our Tucson Downtown Alliance board approved the proposal unanimously, and it was met by nods of agreement among the business community, other organizations, and members of the newspapers’ editorial boards.  The idea was not to pit one project against another, but do them in such a sequence as to make it possible to do all of the projects eventually.

While some good things are definitely happening in Downtown, and have been for years, very little of the progress to-date is directly attributable to wise investments of the TIF itself, so it is not surprising that the State would be questioning the efficacy of this investment in State sales tax dollars.  Millions have been spent teeing up projects on the West Side that were halted by the city manager in 2008.  Only the renovation of the Fox and Rialto Theatres, the construction of the TCC box office, the Presidio Heritage Park, Avenida del Convento, and a roundabout outside the TIF district boundaries on Grande Avenue are completed TIF-funded projects.  Soon the Depot Plaza garage will join that list.  See for yourself at http://www.tucsonaz.gov/rionuevo/.

I hope that by the time this magazine is printed, the Legislature has passed a budget with a Rio Nuevo amendment that leaves the TIF funding stream fully intact through its sunset date in 2025.  Almost certainly, though, for that to have happened, the Legislature didn’t get spooked again by news of Tucson leaders trying to redirect control of the project or to redirect funding to anything but a convention complex.  We have to stop denying that there have been problems, take our medicine, and hope for the best.

And, equally certain is the likelihood that the amendment required the creation of a new oversight board for the TIF that answers not to the City of Tucson, but to the State of Arizona.  Hopefully, this board will be made up entirely of Tucsonans who will demand transparency and accountability, who understand how to invest the funding strategically, and who want the best for Downtown.

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I’m cruising through the May 8th edition of the Dandy Dime (what else should I be doing on Mothers Day?) and I run across an ad, on page two, that caught my eye. In big bold red letters reads the following:

$5000 Reward to the first person who supplies us with data leading to the arrest and conviction of persons improperly involved with Rio Nuevo monies. For security arrangements contact:

Woodrow
P.O. Box 360
Tucson, AZ 85740

Any ideas? 

Woodrow, would you mind sending over some of the stories you get? Talk about some great blog fodder!

We’ve heard Rio Nuevo was mismanaged, poorly handled and way off track but corrupt? Say it aint so.

Just in time for election season.

I have been informed that the Rio Nuevo Multipurpose Facilities District Board has taken action today to investigate out sourced project and financial management options and begin a period of transition to propose a fully independently managed district, separate from the City of Tucson.  In former City Manager’s Hein’s  FY10 budget, he had eliminated the position of Downtown Development Director from the budget anticipating changes in Rio Nuevo Management.  Based on the Board’s desires and our difficult financial times, I will also be proposing the elimination of the Downtown Director position effective June 30, 2009.

Greg Shelko has served admirably among difficult times in the Downtown Revitalization process.  He has been a consummate professional in trying to deliver the projects as directed by the Mayor and Council.  We hope that we are able to build upon the successes he helped create as we move forward in transition on project delivery.  I cannot stress enough how important the Downtown Redevelopment project is to the community and to the State of Arizona and thank Greg for his contributions to that end.

If you have any questions, feel free to contact me at 520-791 4204.

Thank you,

Mike (Letcher – not the other one)

I got to tell you I’m a huge fan of O’Dell. He has this council’s number down. Their congenial, vote as a group – go along to get along – policy is completely bringing the City of Tucson to a halt.

The city manger is on pins and needles and more worried about self preservation than leading the ship. His cover your A#$s! approach to this years budget has brought the city to a stand still. Hein won’t release a budget until the council gives direction and the council isn’t knowledgeable enough or doesn’t have the guts to propose the needed cuts.  It’s an election year for two power hungry incumbents so watch the sparks fly over the next couple weeks.

We covered Glassman’s impact fee smack down HERE. Tax increases HERE and HERE. Layoffs are off the table HERE. Problems with Rio Nuevo HERE HERE HERE Here, here, here, here….you get the picture.

Do you think there’s a pattern developing in Tucson local government?

From Walter C – AZ Star. 
The City budget is full of emotional, nice-to-do things that could be cut to balance the budget quickly without layoffs. But with the leftist, politically correct bunch on council, don’t look for any logical solutions. Mike Hein’s only goals in this are to keep his job, while crippling the City government to prepare it for a takeover by Chuckelberry and the County goons. Nobody in this game is looking for anything more than advancing their personal goals and agendas (including reelection).

Little action on proposals

The council and Hein have done an intricate dance with the budget over the past year.

Hein urged changes the council either rejected or took no action on — or, in a few cases, implemented.

While rejecting Hein’s proposals, council members offered few alternatives, and haven’t passed any of their own ideas.

Last June, council members complained Hein was over-stepping his authority and they needed to be more involved. But at an October budget-strategy session, in the face of an increasing deficit, they demurred and told Hein to figure out where to make cuts.

In most cases, the council and Hein have backed away from dramatic action.

A timeline

January 2008:Hein created a list of outside-agency funding he believed could be cut. Mayor Bob Walkup stressed belt- tightening in his State of the City speech.

February 2008:Hein announced a hiring freeze, travel restrictions and deferring maintenance and acquisitions to help bridge what was then a $12 million shortfall for the budget year, which ended June 30.

March/April 2008:Hein suspended the city’s sustainability plan of pre-programmed spending increases for road paving, police officers and firefighters, and parks.

June 2008:The council approved this year’s budget, but slammed Hein over a proposal to increase bus fares to raise $1 million. The council soon moved to fire Hein, but then he was retained unanimously weeks later.

August 2008: The city announced it needed to use $12 million to balance the previous year’s budget, lowering the city’s reserves from $44 million to under $32 million.

September 2008:Hein proposed combining Community and Neighborhood services departments to save $380,000. The council agreed.

October 2008:Plunging sales-tax receipts prompted the city’s budget deficit to explode to $51 million. The city said for the first time it might cut or suspend services. The council voted to cut funding for outside agencies by 10 percent, but told Hein to come back in December with a plan for more cuts.

November 2008: The city began to quietly cut swimming pools and recreation centers, the TICET shuttle, graffiti abatement, and the Community Food Bank. It laid off some part-time and seasonal workers.

December 2008: Hein announced another $31 million in cuts were needed. The council signed off on cutting police and fire academies, some Sun Tran bus service, and Parks and Recreation classes.

January 2009: The council said it preferred raising fees and taxes or spending down the city’s rainy-day fund to making massive budget cuts.

February 2009: Hein unveiled budget cuts and potential tax increases for next fiscal year, which starts July 1.

Cuts included taking $4 million from outside agencies, saving $2 million by combining the Planning and Development Services departments, cutting $4 million in transit, and hitting employees with furloughs, higher benefit contributions and no more sick-leave buybacks to save a total of $10 million.

He also offered a menu of tax increases, from which he hoped the council would implement $5 million worth.

The council agreed it would back most of Hein’s proposed cuts at that time, but, on Tuesday, council members said they need to think about it further.

Still scrapping Despite earlier statements they would back many of Hein’s cuts, council members criticized Hein over his budget again last week.

Councilwoman Regina Romero demanded more public hearings on the budget, including longer ones to allow more people to speak.

Uhlich was much harsher, saying the council needs to vote on many of Hein’s proposals, rather than continuing to let them linger in the public mind until they become de facto cuts with no council input.

For example, the merger of the Planning and Development Services departments is already under way, and employees have been given layoff notices. The council has discussed the plan, but it has not taken action.

In an interview, Uhlich said she has been “very aggressive to have the budget come in front of us. . . . Decisions have to be made sooner rather than later.”

Councilman Rodney Glassman said in an interview that he has been talking for some time about his priorities of police, fire, parks and roads.

But he said the council has not been able to come to any consensus, and he can’t make decisions alone.

“The longer we wait, the more difficult our financial situation will be,” he said. “It takes four votes to align my priorities with the budget.”

Hein said he welcomes policy direction because he doesn’t want to submit a budget to the council that is dead on arrival. But he told the council that submitting his own budget is “a duty under the (city) charter that I’m willing to fulfill.”

He is scheduled to submit the budget on April 21.

I gotta hand it to Inside Tucson Business for doing a little investigative reporting and jumping on the Rio Nuevo bandwagon. Keep it up guys the “safety zone – cloth reporting”  is yesterday’s business model. Just ask Kimble at the Citizen.

It was a short but sweet story about how Reno is revitalizing their downtown centered around…..wait for it…… SPORTS STADIUM and ENTERTAINMENT! Why didn’t we think of that?

They even gots a web site – HERE.  Click HERE to see the photos.  If we only had that one to do over again.

From looking at the background their downtown actually looks worse than ours. Looks like they have a great first start. I wonder if they spent $80 million in consultants to get this far?

Authors on this blog have called from Mike Hein’s head. After 3 years on the job the drum beats are sounding.  With one open seat and two freshman incumbents up for re-election it’s going to be an interesting 9 months. During an election year the word ‘scapegoat’ comes to mind. 

Being the City Manager with this, Overwhelming underdogs of a council must make you want to hide under the covers each morning.

The City Manager definitely has a role in each and every one of the decisions that have lead us to the complete mess we are in today. He’s culpable and part of the problem for sure. Hein is the one making $240k+ while the 7 people that collectively tell him what to do make $180k combined! He’s playing a high stakes game but the game board, rules and even the numbers on the dice change from day to day. 

Finanical Down Turn

The city is falling on hard times financially and the pressure is on.  A manager needs to make quick adjustments to get us through the mess. As long as those adjustments don’t affect artists, free rent arrangements to non profits, funding for working poor, Job Path, graffiti classes, Kidco, Department of a(Organize The )Neighborhoods Resources, public access TV,  bus fares, or cuts to any of the 5000 plus employees that are protected by a strong union he’s got full latitude to do what’s right for the community.

What can he cut? Police, road maintenance, garbage services and emergency response staff and equipment.  You know, all the fluffy stuff a city wastes their budget on. 

So if you can’t cut expense you gotta raise money. You raise money in a crazy thing called taxes.  Here’s some of the BUSINESS specific ‘revenue enhancements’ implemented and or being concidered;
Ad Tax
Rental Tax
Impact Fee (ok by not repealing it its still at tax)
Tax to keep your development plan relevant for multiple years
Utility Tax
Water meter hook up tax
Sign Permit Tax
Building Permit Tax
Business Licence Tax
Secondary Property Tax
Increased Landfill Prices
Increased Commercial Waste Fees
Increased Roll Off Fees

The ‘revenue enhancements’ affecting the RESIDENTS of our city;
Increased Utility Tax
Water Fees Increase up to 10% (on top of 8% last year)
Proposed garbage fee increase

Read our previous post HERE

So if you’re the city manger under this council you are officially between a rock and a hard place.  Hein is dealing with so many council sacred cows and pet projects it’s tough to know where to turn.  Hein can’t cut or raise revenues to certain populations. Hein is forced to focus increases on the one special interest not represented on this current council, the business community. 

How does government pay for all the staff, programs, arts groups, low income housing? Oh yeah collecting sales tax from businesses that are brave enough to open in the city of Tucson. Get the picture?

There Are Short Comings….

I agree on management of Rio Nuevo. It’s been botched before Hein came aboard and until the legislature demands new people overseeing the entire project it will be messed up long after he leaves.  Shelko and Barr, aren’t cutting it. Installing Hecker, Lyons and allowing Trasoff’s chief of staff’s wife into management/ oversight positions is highly questionable. Emails from personal accounts to cover tracks…..not good.

MTCVB and TREO need to pull their weight and function in the light of day. Development Services needs a complete cultural shift. 

Hein pissed off council staff and learned how much power they actually had.  Remember THIS near axing from last year?

Where is his plan? All I’m seeing is reaction to the follies that go on around him. How about a 5 year plan? A vison on where we are going?

What’s the deal with the botched search for a new police chief? Do we blame that on Hein?

Why Is Hein Worth Keeping?

What I like about Hein is his early shake up of the Tucson city bureaucracy.  In a climate where you can’t fire  people all you can do is shift them around. By moving around department heads and entrenched fiefdoms Hein took control of the staff. It sets him up to either put the right people in place  and let them do their job or micromanage every aspect of every department he’s responsible for.

He thinks outside the box and isn’t afraid to take a different approach to a problem. 

If he does go what can we expect from the next victim.  Hopefully a potential candidate for the job reads the papers and our blog to get a sense of what they are in for. Tucson could be a career killer.
 

Jim Nintzel from the Tucson Weekly finally took a jab at the Democratic City Council for their handling of Rio Nuevo.  Fast forward to 2.19 minutes for the for history in the making.

Nintzel Changes Tune On Arizona Illustrated

The Star ran a story today about a series of emails that went back and forth between City Manager Mike Hein, Councilwoman Nina Trasoff, Mayor Walkup’s aid, Andrew Greenhill and former City Manager and current representative of the UofA Joel Valdez and two Rio Nuevo beaurocrats; Shelko and Barr.

The jist of the story is an attempt by all or most of the parties involved to spin the crazy spending going on with Rio Nuevo funding.  It’s bad, smells of incompetency at best and cover up on the City’s side at worst.

Walkup denied knowing anything about e-mails his chief of staff wrote, although he received some of the e-mails in the chain.

The mayor said the point is the city has not agreed to foot more of the bill for the science center, adding the e-mails were “preliminary” and “just conversation.”

“I don’t know anything about e-mails,” Walkup said. “E-mails do float back and forth. … An e-mail is an e-mail.”

Anyone want to explain to me why the Star didn’t address the fact that elected officials, representatives of the mayor and our city manger used personal emails to communicate on such a sensitive subject? 

If you answerd  they were concerned that through the Freedom Of Information Act that all public emails systems are open to the public you would be correct.  Hey guys, if your going to avoid the public don’t copy recipients that are using public email addresses.

Real bright folks. I sure hope someone has a tape recorder rolling somewhere.

Read em and weap or read em on the way out of office  – HERE.

Ms. Trasoff

Ms. Trasoff has announced she wants to selectively revise the Tucson Land Use Code.

Bully for her.

But it is time to COMPLETELY revamp the antiquated Tucson Land Use Code and not perform some selected minor elective surgery.  Ms Trasoff you are wrong – again!

A total revamp of the code is what is needed to create a brighter future in Tucson.  But revamping the code will be a dangerous task for her to accomplish and the reason Trasoff and Company do not wish to pursue this endeavor is because their neighborhood special interest group allies do not want this to happen. 

These are the same folks who help elect Trasoff and her Democrat crew along with BIG LABOR.  That is why she has been so unwilling to make any substantive changes to happen and only reluctantly suggests some tinkering with the code.

Is it in Tucson’s best interests to continue to elect council members who are beholden to special interest radical neighborhood groups and BIG LABOR who lead our City Council around the nose on issues which are so important to ALL Tucson?

Rio Nuevo was to be Ms. Trasoff’s jumping off point to run for mayor of Tucson. 

She had hoped for success with the project and so did each of us who also wanted there to be a vibrant downtown.  That is why local community leaders and myself worked so hard and sacrificed our personal reputations at the Arizona Legislature to expand the TIF only to be embarrassed by her and the council.

Trasoff, the rest of the council and her supporters squandered the most positive business cycle in half a century flopping around like a fish from one failed concept after another.

Further, Ms. Trasoff sanctioned selling $80,000,000+ of bonds at the worst possible time in an effort to threaten the Legislature against cutting off the TIF expansion. 

When the bonds were sold Trasoff said this was one the greatest developments for Rio Nuevo.  Trasoff says she “owns” Rio Nuevo.  If she does then let her sink with this stinker.

This week Ms. Trasoff will announce she plans to seek re election.  Her bid MUST be rejected.  She is an amateur who is in charge of millions of our dollars and while she would believe our tax dollars have been well spent she and her friends are delusional.