Rio Nuevo board approves plan to settle all differences with city
Proposal would end all audits, litigation and property disputes
by Darren DaRonco
Arizona Daily Star
February 5, 2013
The legal tussle that has engulfed the Rio Nuevo District and city of Tucson the past two years may be coming to an end. On a 5-1 vote, the Rio Nuevo board approved its most recent offer to the city to resolve all litigation, property disputes and other issues between the two entities. The board first publicly released what it thought was a final offer back in October. But the city rejected it the next day. Rio Nuevo Chairman Fletcher McCusker said he believed the new terms would be enough to get City Council backing. "I am hopeful the city will agree to this," McCusker said. "So this board can get back to work" on developing downtown Tucson.
Some of the provisions in the offer include:
• An end to audits. The agreement "settles and resolves all past disputes, known and unknown, between the parties" including the audits. It stipulates that both sides participate in good faith during future audits mandated by law.
• A funding statement on the Tucson Convention Center. Rio Nuevo will allocate no less than $6 million to renovate the TCC.
• An end to litigation. The agreement would end two lawsuits the district has against the city, totaling more than $70 million in claims.
• A statement on hotel development. Once Rio Nuevo expends money on a mutually agreed-upon hotel project, the city must recognize that will satisfy state statute allowing Rio Nuevo to spend money on projects other than a hotel.
• An agreement on the Depot Garage. The city gets ownership of the garage and agrees to pay Rio Nuevo $16 million over 37 years.
• An agreement on the 351 S. Brickyard property. The city will retain ownership.
Rio Nuevo Board Member Alberto Moore cast the lone no vote. Moore said while he thought it was the best deal possible given the circumstances, the city's track record of duplicity and possible malfeasance over the years made it impossible for him to approve the deal with a clear conscience. "My decision on settlement ... is solely a statement and indictment against the city and not a rejection of the settlement," Moore said. "I do have concerns about some of the terms of the settlement today. Not because the terms are unacceptable, but because the city's past performance gives me little confidence it will act in good faith and in the public's best interest."
**FEB. 7 UPDATE:
City, Rio Nuevo promise to make nice is official
by Darren DaRonco
Arizona Daily Star
February 7, 2013
The City of Tucson and Rio Nuevo District officially buried the hatchet this morning. Mayor Jonathan Rothschild and City Manager Richard Miranda signed the final settlement agreement, ending about two years of bickering between the two entities. “Today has been a long time coming. But today, the council and board put past disputes behind us and move forward,” Rothschild said during a news conference. Under the terms of the agreement:
• Rio Nuevo will allocate $6 million for improvements at the Tucson Convention Center.
• The city will retain the Depot Garage and compensate Rio Nuevo about $16 million over the next 37 years.
• Rio Nuevo will reimburse the City approximately $2 million for invoices related to various 2008 bond projects
• The city will recognize any money Rio Nuevo contributes to the TCC and a hotel project as a notice to proceed. This will satisfy a state statute that limits the type of projects Rio Nuevo can fund. Once a hotel and convention center are funded, Rio Nuevo can begin spending on other projects with City approval.
• Rio Nuevo will spend $750,000 for downtown streetscape improvements.
• Rio Nuevo will invest $1.1 million in the Mission Gardens project.
• An end to the two lawsuits totaling about $70 million.
• City and Rio Nuevo agree to cooperate fully with the statutory audits. The next audit must be performed this year.
Neither side received everything it wanted, Rothschild said, but that’s a good thing. “In my experience as an attorney, I can say that’s . . . a good sign that reason has prevailed,” he said. Even though the two sides have put their disagreements behind them, Rothschild acknowledged history isn’t easily erased. “I don’t think you can forget about it, but you got to look at it on different levels,” Rothschild said. “I cannot put back together a shattered glass. But I can start to work going forward.”
And to move forward, Rothschild said it’s imperative the city and Rio Nuevo cooperate to “responsibly put this taxpayer money to work in the way that the voter’s asked.” There is still a pending investigation by the state Attorney General’s Office. Rothschild said the agreement doesn’t indemnify anybody if the state probe uncovers malfeasance. The City Council approved a final execution of this agreement in December during a closed session. The Rio Nuevo Board approved it on Monday. The cessation of hostilities is a welcome relief, Rio Nuevo chair Fletcher McCusker said. “It’s fair,” McCusker said. “And more importantly, it allows us to move forward.” With the history of Rio Nuevo and the enmity it fostered among residents, McCusker said the board will diligently work to regain the public’s trust.
“It’s not lost on me that Rio Nuevo is two four-letter words,” McCusker said. “But in going forward transparency, I think, is the issue . . . All of our bank accounts are now on the web. Anybody can now follow what we are doing dollar by dollar. Any project will have it’s own site on the web where you can actually see the commitments that are made and (where) the funds flow. That’s been part of the challenge historically: who was making decisions and where did the money go. We can resolve that collectively going forward.” While it’s unlikely Rio Nuevo will ever see $200 million again, McCusker said Rio Nuevo is experiencing a healthy revenue stream to go along with its $15 million. He said the goal now is to partner with dynamic entrepreneurs who want to transform the downtown Tucson into something greater. McCusker expects the community will begin to warm to the District once they begin seeing tangible improvements.
Last edited by kaneui; Feb 7, 2013 at 9:40 PM.
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