Tucson Development Thread

[Teacher_AZ_84]

Originally Posted by Anqrew

I wonder what is going to be built here?

Longtime Tucson movie-multiplex to close
Century Park 16, the movie theater on the east side of Interstate 10 near West Grant Road, is closing at the beginning of the year.
A group of investors recently purchased the 74,000-square-foot, 16-screen multiplex for about $2.77 million, says an affidavit filed in the Pima County Recorder’s Office.
The property’s future use isn’t yet clear, said Michael Wattis, one of the investors involved in the purchase. He did confirm it will no longer operate as a theater after the holidays.

While this movie theater was very outdated, these investors better do something with this property instead of sitting on it.

[kaneui]

In this Arizona Illustrated interview, Providence Service Corp. CEO Fletcher McCusker again touts the city center's many changes, saying he foresees downtown Tucson becoming a "mini" Austin, TX with its dining and entertainment offerings, citing the success of Second Saturday that now attracts a crowd of over 10,000 each month:


http://ondemand.azpm.org/videoshorts...into-downtown/

[kaneui]

Originally Posted by Teacher_AZ_84

While this movie theater was very outdated, these investors better do something with this property instead of sitting on it.

I'm guessing they're not spending $2.77M to land bank it, but will perhaps convert the structure to a large retail store/outlet, assuming there is sufficient parking, easy freeway access and good visibility.

[kaneui]

With $30k from fundraising and a state grant, the Friends of Tucson's Birthplace non-profit will begin planting the re-created four-acre Mission Gardens west of I-10, using numerous heirloom trees that descended from the original gardens planted along the Santa Cruz River:



Jason Elam, a Desert Survivors nursery employee, checks on irrigation emitters
to make sure that water is getting to these pomegranate trees. Desert Survivors
grows clones of a number of centuries-old fruit trees.
(photo: Benjie Sanders)


Fruit trees re-create Tucson's birthplace
Jesuit missionaries planted orchards at Mission San Agustín

by Tom Beal
Arizona Daily Star
December 6, 2010

The trees came from Spain, Morocco and the Canary Islands, surviving months of sea and overland travel to find homes in the infrequent oases of New Spain. They were planted wherever the presence of water allowed establishment of missions and presidios. They were planted by Jesuit missionaries at Tucson's birthplace along the Santa Cruz River, where seasonal floods and perennial springs had supported agriculture for 4,000 years. Those mission trees disappeared long ago, but their offspring survived as cuttings and transplants - propagated generation by generation in the yards of Tucson homes and in the riparian creases of nearby mountains. They are returning, this time with utility connections and irrigation lines, to the place where Tucson began, as part of the re-created Mission Garden at the foot of Sentinel Peak ("A" Mountain).

Local groups interested in preserving the heirloom trees joined with a community group advocating for the cultural and historical features approved in the 1999 Rio Nuevo vote. They want to restart the moribund plan to re-create the orchards and gardens of Mission San Agustín - a fortified mission and Convento built in the 1770s at a site now bounded by West Congress Street and South Mission Road. An adobe-block wall currently surrounds the 4-acre site where pea gravel covers future planting areas. The wall is in turn surrounded by a chain-link fence that wards off graffiti vandals. The Friends of Tucson's Birthplace, whose ultimate goal is to push for the reconstruction of the entire mission complex promised in the Rio Nuevo vote, raised $15,000 to kick-start the planting of 100 trees, an amount matched by a grant from the Arizona State Forestry division. It's a down payment, said Bill DuPont, chairman of the local group.

The group is now looking for Tucsonans interested in adopting the trees - $200 buys a one-fifth of a share and a plaque on the wall with the buyer's name on it. The heirloom trees were found and gathered in an effort headed by Jesús Manuel García-Yánez of the Arizona-Sonora Desert Museum's Kino Fruit Tree project - named for Father Eusebio Francisco Kino, who founded the Spanish missions in present-day Sonora and Arizona. "The fantasy would be to have the trees put in before the Kino anniversary in March," DuPont said. March 15, 2011, is the 300th anniversary of Kino's death in Magdalena, Sonora, where his bones remain on display in the courtyard of the mission church that he established there.

García was born and raised in Magdalena. The smell, taste and feel of the quince, sweet lime and pomegranate are his sensual heritage. His late father cultivated the trees. His mother, now 86, still makes quince jam. "It's a normal way of life," García said. "You buy a house, you plant some trees - apricots, plums, whatever. You go to any house, and any individual backyard will have a variety of 10 different fruit trees. Tucson used to be like that, especially among Mexican families." García has been working for more than 10 years to help re-create mission orchards, first at Tumacacori National Historical Park south of Tucson, where 60 to 70 quinces, pomegranates and figs now grow on a site identified as the original gardens for that mission, founded by Kino in 1691.

García began collecting trees for the Tucson Origins Mission Garden project seven years ago, bringing them to Desert Survivors Nursery, at 1020 W. Starr Pass Blvd., for cultivation. The meltdown of the Rio Nuevo projects has produced one benefit, said nursery director Jim Verrier. He now has a big enough stock of heritage fruit trees to supply the Mission Garden and to offer them to customers. The trees sit in plastic pots, leaves blasted by the recent frost, labeled with the locations at which they were found. An Oro Blanco fig comes from the former mining camp in the Atascosa Mountains of Santa Cruz County. A Sosa-Carrillo pomegranate comes from the yard of the historic home surrounded by the parking lots of the Tucson Convention Center. García's favorite is one he found in a backyard in the Menlo Park neighborhood. It's a sweet lime, "the biggest, healthiest one in Tucson. It is a sweet, sweet citrus, no acidity whatsoever - as sweet as an orange," García said. "That is my childhood."

Finding the trees has been an exercise in social history. None of them were alive in the time of the missionaries, but they are direct descendants. It's easier to find heritage varieties in remote mission sites, such as Baja California. García worked with naturalist Gary Paul Nabhan on a study that compared mission records with existing groves, finding nine Baja sites they suggested as refuges for the heirloom varieties. They found mission olive trees that five members of the expedition couldn't girdle holding hands. They located a 200- to 300-year-old grapevine. Nabhan said some genetic tracing has been conducted, and the links don't end in Spain or Morocco. They come from Damascus and Baghdad. The quinces are believed to be from the Indian subcontinent. The organizations funding the project don't have money for genetic typing of these trees, but García found families that knew the histories of their trees. The danger of genetic mixing is lessened by the method of propagation. "You lop off a branch and put it in soil," Nabhan said. "In most cases, with figs and pomegranates, they are still genetically identical." "This is living history," he said. "It connects us to our past."

Jonathan Mabry, the city's historic-preservation officer, said the Mission Garden will "connect visitors to Tucson's past and ensure the survival of the heirloom fruit trees and grapevines of our region." "When they are mature enough to take cuttings, these rare historical varieties will be made available to the public, so that they proliferate and become part of our household gardens and community identity again."


For more info.: http://www.tucsonsbirthplace.org/

[acatalanb]

Speaking of having all the street fairs around downtown, I wished downtown would allocate a block of downtown filled with food trailers/trucks. I got this idea after watching the Food Channel about food trailers. There was these group of food trailers in downtown Portland that were initially unwelcomed by the city of Portland until they gave in thus allocating a section of downtown Portland for food trailers. The food trailers would served exotic gourmet meals that are affordable. I remember this Thai food trailer parked across the Pima County Courthouse only around lunch time ... the lady sells $5 meals that is both good and filling ... she moved out because she said it's just too expensive to open shop at that location. I missed that hangout.

[kaneui]

With shoddy construction at the new TCC east entrance, it looks like Garfield Traub will have little chance of getting paid on an outstanding $275k invoice, much less for a million dollar change order that both Rio Nuevo and the city said they never approved. (And Greg Shelko was getting $100/hr. to oversee this project? The city should be grateful the hotel deal with Garfield never panned out.)



new TCC east entrance
(photo: city of Tucson)


City cites slipshod work on TCC entry
Delays final payment; developer also adds nearly $1M in unexpected bills

by Rob O'Dell
Arizona Daily Star
December 7, 2010

Work on the new $4.3 million entrance to the Tucson Convention Center, built to accommodate a downtown convention hotel that now won't be built, is so shoddy that Rio Nuevo is refusing to make final payments. City and Rio Nuevo officials complain a support column is misaligned, and installation of an intricately patterned floor was so slipshod there are expanses of bare, unadorned concrete and in one location rebar showing through.

While the city is disputing the quality of developer Garfield Traub's work, the company is submitting another nearly $1 million in bills for work it insists was authorized, despite no record it was ever officially approved. Garfield Traub officials told city and Rio Nuevo representatives this week the two new bills, totaling $951,000, were change orders for work added to the project, City Finance Manager Stacie Bird said in an e-mail.

Garfield Traub told officials the costs were always in the budget for the TCC east entrance, but payments were deferred until the city and Rio Nuevo approved the $190 million convention hotel, the e-mail said. The Tucson City Council voted to kill the hotel in October, so now the bills are being submitted, Bird's e-mail said. The developer said Hector Martinez, project manager for the city, and Greg Shelko, the hired consultant for the Rio Nuevo Board, knew about the payments, Bird's e-mail said. Rio Nuevo Board Chairwoman Jodi Bain, who also attended the meeting, said Garfield Traub officials "claimed the city knew and approved it." Martinez and Shelko, however, both said they didn't know about the bills, didn't agree to them and had no authority to authorize any such payments.

The city is withholding the final $275,000 worth of payments to Garfield Traub until the disputes over the column and floor are settled. And officials already are balking at the expected $1 million in additional bills. Unless they reach a settlement, Bain said the two sides could end up in litigation, or the Rio Nuevo Board could file a complaint with the attorney general. The Rio Nuevo Board voted this week to give its attorney on the hotel construction, John Sundt, a waiver allowing him to be interviewed by the attorney general or auditor general about confidential matters. Stephen Moffett, president of hospitality for Garfield Traub, said the two sides are in confidential settlement discussion and said he won't talk about the issues.

Shoddy work
The $4.3 million east entrance was supposed to be finished on time for the 2010 gem show, and was hurriedly approved by the former Rio Nuevo Board in September 2009 as a way to show the Tucson Gem and Mineral Showcase that the community was serious about keeping it here. It was also the reason the former Rio Nuevo Board hired Shelko on a $100-an-hour consulting contract. Construction hit a snag, however, after workers discovered a foundation listed in the plans was not there. The entrance was finished in June, but the final bills are on hold because of the dispute over the quality of the work. After the work was done, TCC Director Tommy Obermaier found a column that is so tilted it doesn't meet industry standards.

It's not a safety issue, but it's far enough out of line that Rio Nuevo should be compensated for its diminished value because the work wasn't done properly, Obermaier said. He also questioned why he could see the column was out of line as he walked through the entrance one day, but the developer never mentioned it. "We took major issue with it," Obermaier said. "I find it hard to believe with everyone involved, no one at some point caught it." The second issue was with the aggregate concrete floor that was supposed to be filled with a random mosaic pattern of small rocks and then polished down. In several places there are large sections of the floor that have none of the mosaic rock patterns and are simply sanded concrete that doesn't have the shine of other areas.

Mark Irvin, the Rio Nuevo Board's vice chairman, said no one finds the floors acceptable, especially given that in one place the concrete was sanded down so far that the rebar underneath is visible. City Councilman Steve Kozachik said the fact it "has taken all year to get anybody from Garfield Traub ... to own up to the errors is probably a good indicator as to why we were unable to come to any sensible terms on the hotel-financing deal." He said the TCC entrance was forced through ahead of the 2009 city elections in order to "save the gem show." It's not done to anyone's satisfaction "despite the taxpayers having footed the bill, and the gem show is still one of our anchor tenants," Kozachik said.

New $1 million bill
Garfield Traub has not yet submitted the two change orders worth $951,000 to Rio Nuevo, but said it will soon. Moffett said the district owes the developer money for other work done as well. But both the city and Rio Nuevo took exception to the new bills. Bain pointed to a letter of understanding, signed by Moffett on behalf of Garfield Traub and Rio Nuevo attorney Keri Silvyn, saying Garfield Traub is owed no additional funds unless the bonds are sold to build the hotel. Garfield Traub officials made similar statements at several public meetings, Bain said. "It's a lot of money," Bain said. "All of us were like, huh?"

Shelko said he's never seen the change orders and said he never changed agreements involving fees, adding the construction was guided by two signed contracts. Martinez also said he's never seen the change orders and didn't approve them. In addition, he said change orders would have to be submitted and negotiated before being approved. What's more, Martinez said Garfield Traub officials balked at doing $160,000 worth of additional work that was authorized for the new TCC entrance without a guarantee it would be paid. That makes him question why, if they were unwilling to take the risk on $160,000, they would be simultaneously doing nearly $1 million worth of work without an agreement. "That's not how it works," Martinez said. "You agree to costs upfront."

[kaneui]

Is there actually some light at the end of this long tunnel? The city and Rio Nuevo are finally hammering out a joint IGA, deciding who pays for what and who owns which properties. (By the way, it's only taken nine months.)


Council OKs plan to clear up its ties to Rio Nuevo
Upcoming vote also aims to settle ownership of downtown property

by Rob O'Dell
Arizona Daily Star
December 8, 2010

The Tucson City Council and the new Rio Nuevo Board could be a step closer to settling their differences. The council agreed unanimously Tuesday to vote on two settlements with Rio Nuevo next week. The council and the Rio Nuevo have wrangled for months over two legal agreements - one on how the two entities can work together, and the second on sorting out who owns which assets and property downtown. The council also voted unanimously to cooperate with any audit or other investigation of Rio Nuevo that occurs in the future. The council met in closed session before the vote.

Untangling the complex legal agreements has become a knotty problem for both groups, as Rio Nuevo was effectively a city department for 10 years before control of the district was stripped away by the Legislature, which appointed a new board to take control of the tax-increment financing district after the city spent $230 million downtown with little to show for it. When the Legislature created the new board to run Rio Nuevo, it invalidated the previous "governing" agreements between Rio Nuevo, Tucson and the city of South Tucson, which also approved Rio Nuevo and is a party to the agreements. The new governance agreement will spell out what approvals are needed by Rio Nuevo and the city of Tucson to OK projects and to do business with each other. Although Rio Nuevo is in control of the tax-increment financing, the city needs to match the total spending of Rio Nuevo in either money or projects by 2025.

The more complex agreement is a "global settlement" of who owns what property downtown and which entity owes the other money. City Attorney Mike Rankin said the settlement is very similar to what has been talked about publicly. The deal the city has laid out includes a number of properties that the city would turn over to the district. Included would be west-side land and much of the money generated from the Depot Plaza garage, which Rio Nuevo paid for. In addition, the city said it would forgo $1.7 million that it lent to the district in exchange for Rio Nuevo's paying up on some projects on which it is withholding payment, such as infrastructure work in Barrio Viejo and Barrio San Agustín.

[acatalanb]

Here's a link of Food Trucks in Portland, Oregon , just to give an idea what they served. It's quite popular in the trend setter called California. Competition is good. Food Trucks are roaming democracies. They keep the big money business from monopoly and adds more 'spice' in the food business.

Yep, message sent about this old idea to one of the councilman. Hopefully, this guy, Greg Shelko, doesn't get involve in this ... I want this to succeed.

... like to add, I sure would like to see the comments of the downtown welfare rich if these food trucks get implemented. These same group like to take credit with their east side 'private' investments when the govn't paved the way for their 'success' .

A good LA Times article about Portland Food Carts .

[kaneui]

Ross Rulney has new residential and commercial tenants filling his renovated spaces at the historic Julian-Drew Building and adjacent carriage house, although the 53-unit condo conversion of the Tiburon Apartments (The Flats at Julian-Drew) never quite came together:



Julian-Drew Building renovation render and block site plan
(renders: Rob Paulus)


Julian-Drew/Tiburon properties fill up at Broadway and 5th
by Teya Vitu
Downtown Tucsonan
December 07, 2010

Ross Rulney has put away the “for rent” sign for his Julian-Drew Building, the adjacent carriage house and the 53-unit Tiburon Apartments, all clustered at Broadway and Fifth Avenue. “For the first time ever, I’m fully leased,” Rulney reported. “I don’t know if its anything more than we’re just putting out cool, reasonably priced product.”

A half-dozen people could be seen vigorously pedaling stationary bicycles one weeknight at 5:45 p.m. at O2 Modern Fitness, which has had enough success in its Julian-Drew storefront that owner Susan Frank has expanded into the carriage house at the back with a cross training studio, Rulney since spring has worked inside the carriage house to build four 1,000-square-foot apartments with two bedrooms and two bathrooms in one half of the building. Amity Foundation and O2 fill the other half. Amity’s primary headquarters office is in the Julian-Drew, where Hollis Graphics, Fitworks Cycling Support and Aviar Commercial Space Planning and Design also have space.

Rulney bought Julian-Drew and the carriage house in 2006 and the Tiburon Apartments in 2000. He has wrestled with changing plans and economic climates since buying Julian-Drew until suddenly having full occupancy now. “Maybe TEP and Providence saved me from myself,” said Rulney, whose property is one block west of the UniSource Energy construction site for its new nine-story headquarters. “We did a lot of planning. We were patient. We let the market develop around us. We didn’t rush anything.”

[kaneui]

Originally Posted by acatalanb

Speaking of having all the street fairs around downtown, I wished downtown would allocate a block of downtown filled with food trailers/trucks. I got this idea after watching the Food Channel about food trailers. There was these group of food trailers in downtown Portland that were initially unwelcomed by the city of Portland until they gave in thus allocating a section of downtown Portland for food trailers. The food trailers would served exotic gourmet meals that are affordable. I remember this Thai food trailer parked across the Pima County Courthouse only around lunch time ... the lady sells $5 meals that is both good and filling ... she moved out because she said it's just too expensive to open shop at that location. I missed that hangout.

There are plenty of vacant downtown lots for these food trucks. On the west side are the mostly empty TCC parking lots, the Norville property just south of the federal courthouse, and the big parking lot across from El Charro. On the east end is the empty lot for the proposed city/county courthouse, and more lots east and south of the Rialto Theatre--just to name a few.

[acatalanb]

Originally Posted by kaneui

There are plenty of vacant downtown lots for these food trucks. On the west side are the mostly empty TCC parking lots, the Norville property just south of the federal courthouse, and the big parking lot across from El Charro. On the east end is the empty lot for the proposed city/county courthouse, and more lots east and south of the Rialto Theatre--just to name a few.

Got that right! There's nothing much to lose. If the food truck is a failure, all that's needed is the food truck to not visit the lot or another food truck to take over. You won't have to worry about having an empty building or even spend on construction of a building. Might as well fill those empty lots and create revenue while the city is figuring out what to put there - you know how long that takes.

I think it will be a success considering that Tucson is the culinary capital of Arizona. Not too mention that they are fast food prices but gourmet dishes. Some trucks would tweet where they would park ... this makes it more appealing for customers ... considering one location can have different trucks.

Here's another link about the San Fran Food Truck Scene .

The city can convinced the gourmet or family restaurants that were out of business to just go truckin. It's cheaper to start a food truck as opposed to the standard restaurant. I hope the city would consider this ... you guys help yourself in calling or emailing our mayor or city council about this old ongoing trend of Gourmet Truckin of the Great Recession.

[acatalanb]

Originally Posted by kaneui

Ross Rulney has new residential and commercial tenants filling his renovated spaces at the historic Julian-Drew Building and adjacent carriage house, although the 53-unit condo conversion of the Tiburon Apartments (The Flats at Julian-Drew) never quite came together:



Julian-Drew Building renovation render and block site plan
(renders: Rob Paulus)


Julian-Drew/Tiburon properties fill up at Broadway and 5th
by Teya Vitu
Downtown Tucsonan
December 07, 2010

Ross Rulney has put away the “for rent” sign for his Julian-Drew Building, the adjacent carriage house and the 53-unit Tiburon Apartments, all clustered at Broadway and Fifth Avenue. “For the first time ever, I’m fully leased,” Rulney reported. “I don’t know if its anything more than we’re just putting out cool, reasonably priced product.”

A half-dozen people could be seen vigorously pedaling stationary bicycles one weeknight at 5:45 p.m. at O2 Modern Fitness, which has had enough success in its Julian-Drew storefront that owner Susan Frank has expanded into the carriage house at the back with a cross training studio, Rulney since spring has worked inside the carriage house to build four 1,000-square-foot apartments with two bedrooms and two bathrooms in one half of the building. Amity Foundation and O2 fill the other half. Amity’s primary headquarters office is in the Julian-Drew, where Hollis Graphics, Fitworks Cycling Support and Aviar Commercial Space Planning and Design also have space.

Rulney bought Julian-Drew and the carriage house in 2006 and the Tiburon Apartments in 2000. He has wrestled with changing plans and economic climates since buying Julian-Drew until suddenly having full occupancy now. “Maybe TEP and Providence saved me from myself,” said Rulney, whose property is one block west of the UniSource Energy construction site for its new nine-story headquarters. “We did a lot of planning. We were patient. We let the market develop around us. We didn’t rush anything.”

Every time I pass by this building , the O2 Modern Fitness business has always been filled with customers even last summer. I think most of the customers came from the One Fifth North housing. I predict this business skyrocketing some more in the future.

[acatalanb]

Hey guys, looks like there might me another space for those gourmet trucks. The Arizona Hotel might only have weeks from shutting down, link

[kaneui]

Originally Posted by acatalanb

Hey guys, looks like there might me another space for those gourmet trucks. The Arizona Hotel might only have weeks from shutting down, link

It's probably time for Bert Lopez to either close the doors on his run-down Hotel Arizona or sell it to someone who's willing to upgrade the place to make it an attractive, viable property. (He's projecting only 6% occupancy for December? The guy obviously doesn't give a damn.) So far, the City Council and Rio Nuevo have been cool to all of his far-fetched proposals asking for handouts, and I don't see that changing anytime soon.

Meanwhile, there are a number of other private sector developers/investors who are interested in building new hotels downtown, once they have a realistic timeline for a TCC upgrade/renovation and the completion of the modern streetcar.

[acatalanb]

Originally Posted by kaneui

It's probably time for Bert Lopez to either close the doors on his run-down Hotel Arizona or sell it to someone who's willing to upgrade the place to make it an attractive, viable property. (He's projecting only 6% occupancy for December? The guy obviously doesn't give a damn.) So far, the City Council and Rio Nuevo have been cool to all of his far-fetched proposals asking for handouts, and I don't see that changing anytime soon.

Meanwhile, there are a number of other private sector developers/investors who are interested in building new hotels downtown, once they have a realistic timeline for a TCC upgrade/renovation and the completion of the modern streetcar.

I think Mr. Lopez needs to focus on the apartment business. He should just sell that property. I had lunch a few times in his hotel way back in the 90's. The food was average. The place looks empty all the time. I lived in one of his apartments - Foothills Apt ( Swan/Sunrise ) and it happens to be THE best apartment I ever lived in Tucson due to it's location and safety ( foothills ). I'd recommend living there. The rent is also at fairly market priced. However, he tried to convert that same apartment to a condo somewhere in the 2000's . I'd be curious about the quality of his new luxury apartment(s) in Tucson.

[BrandonJXN]

There really needs to be some sort of residential on Broadway and Fifth. Everytime I would walk under the 4th Ave Underpass, I would envision some sort of residential building with retail on the bottom that would help keep the Hotel Congress/Rialto folk walking about.

Another dream: The Warehouse area has all the potential in the world to be a cool little arts district.

[kaneui]

Originally Posted by ThreeHundred

There really needs to be some sort of residential on Broadway and Fifth. Everytime I would walk under the 4th Ave Underpass, I would envision some sort of residential building with retail on the bottom that would help keep the Hotel Congress/Rialto folk walking about.

Another dream: The Warehouse area has all the potential in the world to be a cool little arts district.

A four-level parking structure is currently under construction at Depot Plaza right next to the 4th Ave. underpass, and a private developer will be adding three floors of apartments on top once the garage is finished, as well as street-level retail.

[acatalanb]

An estimated 300,000 people will be stopping by the 4th Ave. Street Fair for 3 days. Imagine adding a few of those food booths converted to trailers will do at those empty lots downtown. Downtown Portland, Oregon has about 80 food trucks. Tucson CONNECT the FREAKIN DOTS!!

[kaneui]

Tucson is looking to bolster the future of the region's largest employer, Raytheon (12,500 employees), by contributing up to $40M to facilitate the future expansion of the company as well as Tucson International Airport:


Plan aims to assist Raytheon expansion
City, county would have to kick in up to $40M for land, work on roads

by Rob O'Dell
Arizona Daily Star
December 10, 2010

Stung by Raytheon Missile Systems' decision to build a new missile facility in Alabama rather than Tucson, Pima County and Tucson are drafting plans that could put up as much as $40 million to help Raytheon stay and expand in Tucson. Raytheon is the region's largest overall employer and is by far its largest private employer. Most of the $40 million is planned to come from a county bond election that won't occur until at least 2012. The remaining money would be $2 million from several county funds and $8 million that Tucson will receive from an annexation agreement with Raytheon approved in 2009.

Raytheon would need to agree to have the $8 million from the city's annexation be used to buy land surrounding its plant, said Byron Howard, a city special-projects manager. About $8 million of the plan would go toward buying land south of East Hughes Access Road - which is owned by developer Don Diamond along with First Tucson Airport Investors and the Tucson Airport Authority. All the land would serve as a "buffer" from urban encroachment around Raytheon, said Pima County Administrator Chuck Huckelberry. The hope would be that Raytheon would eventually lease or buy the property to expand its facilities there, he said.

But to properly expand into the area, Raytheon would need to have Hughes Access Road shut to the public, which means reworking the road system in the area south of Tucson International Airport, Huckelberry said. Fixing the roads would be the major expense in the plans, which could take two years to finalize. There are two options, although city and county officials said they prefer the more expensive option.

The options:

• Shut down Hughes Access and extend South Alvernon Way to East Old Vail Connection Road and expand and improve Old Vail to carry the Hughes Access traffic. Cost: $16 million.

• Divert South Alvernon Way to the southeast so it will no longer cut across the future location of a third runway for Tucson International that the airport could build 20 to 40 years from now. Alvernon Way would travel to the southeast until it connected to the alignment of South Craycroft Road - where Craycroft would be if it extended that far south. The current alignment of South Alvernon would be closed as would portions of South Swan Road along with Hughes Access. Old Vail would be improved and expanded. Cost: $31 million.

City and county officials prefer the more expensive option because they don't want to improve and extend Alvernon only to close it in the future if the airport adds a third runway. City Councilman Steve Kozachik said the cheaper option is "almost throwing good money after bad." Huckelberry said the first option would be a quick fix, but wouldn't solve problems in the long run. "It's probably the cheapest, but it would ultimately be obsolete," Huckelberry said. "I always believe in doing it right the first time."

Taxpayers need to help facilitate Raytheon's expansion because one of the reasons Tucson lost out to Huntsville, Ala., for Raytheon's new missile facility is that Raytheon didn't have enough room at its south-side site here, Huckelberry said. When it awarded the new facility to Huntsville - which will employ an estimated 300 workers at an annual average wage of $60,000 - in July, Tucson was a finalist. But the company said Tucson was bypassed because of limits to expansion at Raytheon's current missile plant and a lack of development-ready alternative sites. Richard A. Mendez, Raytheon's director of facility management, told the City Council that Raytheon is confined in a box where it is now, which causes problems for the company and limits potential expansion. "Our existing condition is a constant state of risk," he said.

Joe Snell, chief executive officer for Tucson Regional Economic Opportunities (TREO), said the city, the county and the whole region need to think big in order to make sure Raytheon stays and expands in Tucson. He said Raytheon brings billions into the local economy but that "we're treating them like a street vendor." Local governments should think even bigger than the $40 million plans and help attract more defense contracting to Tucson, Snell said. The biggest impediment to Raytheon's expansion, he said, is the region's lack of a large class of high-paying jobs that can help it attract top talent to Tucson. Spouses and even Raytheon's recruits want to see high-paying jobs in the region to ensure there are options if they choose to move to Tucson, he said. "If Raytheon leaves, we're cooked," Snell said. "This is our economic engine."

[kaneui]

Oro Valley's biotech hub at the city's Innovation Park will soon be adding 500 new jobs with an average salary of $75k--nearly double the average wage in metro Tucson:



After announcing in 2009 its plans to more than double its real estate
footprint in Oro Valley, Ariz., over the forthcoming decade, Roche Group
company Ventana Medical Systems in October announced it would invest
approximately $180 million and add up to 500 jobs over the next five years
at the site just north of Tucson.
(photo: Ryan Mihalyi)


Golden Valley
Roche continues to double down in southern Arizona

by Adam Bruns
www.siteselection.com
November 29, 2010

Many the corporate acquisition comes with the promise of continuing investment in the acquired party. All too often that promise ends up unkept or watered down. But such is not the case in the Tucson-area community of Oro Valley, where in October, two years after acquiring tissue diagnostic firm Ventana Medical Systems, Switzerland’s Roche Group announced it would invest at least $180 million over the next five years, creating up to 500 new jobs with an average salary off $75,000. That wage is equal to 175 percent of Pima County’s average wages in spring 2009. The decision concluded a national site analysis that included other locations where Roche already has a presence: Indianapolis, Southern California and Northern New Jersey. According to Joe Snell, president of Tucson Regional Economic Opportunities (TREO), the process unfolded over 11 months. The end result is expected to have an economic impact of $600 million, Snell told the TREO annual luncheon audience in October. Roche plans to build new facilities on part of the approximately 60 acres (24 hectares) it owns at Innovation Park, across the street from its existing operation. The new jobs, spread among science, administration and manufacturing, will bring Ventana’s total Oro Valley payroll to more than 1,400.

Ventana originally was launched in 1985 by former University of Arizona professor and pathologist Thomas Grogan. The firm pioneered an automated method of cell staining for cancer testing and personalized treatment. Today, as the global research site of Roche Tissue Diagnostics, it is among the world’s leading developers and manufacturers of automated tissue-based diagnostic systems and tests focused on the detection of cancer. As documented in Site Selection’s September 2009 interview with Ventana facilities director Gregg Forszt, the company is pursuing a master plan that looks toward 2020, going from six buildings in fall 2009 to as many as 14 buildings eventually. Ultimately the company would more than double its real estate footprint over the next decade. Last year’s ongoing expansion activity included a 115,000-sq.-ft. (10,680-sq.-m.) R&D facility, a parking garage and a central utility plant.

These Are the Breaks
The incentives package for the project totals nearly $14 million, including $8.2 million in property tax waivers from Pima County, $2 million in stimulus funds for training via the State of Arizona’s Quality Jobs program, and Oro Valley’s rebate of up to $1 million in infrastructure development impact fees. The property tax waiver from the county was approved by county supervisors in late October, and allows Ventana, by state law, to pay taxes based on 5 percent of the assessed value, as opposed to the normal business rate of 21 percent. The taxes waived could reach $10 million if the job creation target surpasses projections and reaches as high as 730. The waiver is contingent on federal approval of Ventana’s application for Foreign Trade Zone sub-zone status. An application for reclassification of FTZ No. 174 under the alternative site framework, submitted by TREO in October 2009, was approved in June 2010 by the U.S. Foreign-Trade Zones Board. Such reclassifications allow for the naming of magnet sites with a named service area, which in TREO’s case is the whole of Pima County.

In an October 15 memo from Pima County Deputy Administrator Hank Atha to Pima County Administrator C.H. Huckelberry, Atha outlines all aspects of the agreement, noting that Ventana’s investment should provide an annual average of $348,000 in revenue over the next decade, despite the reduction in levy caused by the FTZ reclassification. The payment-in-lieu-of-taxes (PILOT) in the agreement protects Pima’s annual real property revenue from current operations ($204,817 in 2010) and at least $100,000 of annual personal property revenue from current operations. “After ten years, Ventana revenue to Pima County is estimated to be at least $1,500,000 annually, and to continue at that level for the foreseeable future,” writes Atha. “Cumulative tax and PILOT revenue to the three educational districts and the fire district will average $1,500,000 annually during the first 10 years and the foreseeable future.”

According to an attached Oct. 12 memo from Huckelberry to the Board of Supervisors, Ventana’s outlay over the next five years could be as high as $192 million. According to cost/benefit analysis by the county’s finance and risk management department, the property tax relief to Ventana vs. incremental tax revenue from new employees purchasing homes is “essentially a break-even proposition,” says Huckelberry, who recommends using this first-ever application of FTZ commercial property tax relief by an existing company as a model from which to formulate new minimum-requirement policies for future agreements.

Nice Neighborhood
A decade after its germination, the 535-acre (217-hectare) Innovation Park is living up to its name as a growth medium for biomedical business. Sanofi-Aventis also operates a major research operation there. The University of Arizona operates a commercialization center called the Bio5 Institute, and the Critical Path Institute also resides at the park, helping smooth the way for medical innovations to get to the people who need them faster. The area’s biotech momentum is increasing on the academic side too, said University of Arizona Vice President for Research, Graduate Studies, and Economic Development Leslie Tolbert, Ph.D., in an interview in early October, noting the school’s recent purchase of a former Sanofi building. “Sanofi actually moved out of this building as they created their wonderful new facility,” said Tolbert, a neurobiology professor. “We bought it for an extremely good price. It’s very good for drug development. So we’re moving some of our faculty into this facility. They already collaborate with Sanofi — one has a 25- to 30-year history with them. They now will increase collaborations.”

Research areas include small molecules and particular cellular processes and disease areas. Tolbert said the idea is to work toward “the handoff.” Also in the building is 27,000 sq. ft. (2,508 sq. m.) of incubator space, where small companies that want to be part of the two companies’ ecosystem can locate. "It’s just enough space for a few labs with a real focus in this area, to do high-throughput development and screening,” said Tolbert. “One investigator is a colon cancer investigator who has a drug in clinical trials that is preventive. We’re especially interested in the preventive side.” A new 501(c)(3) will put an entrepreneur in residence at the incubator’s location. “So there is a whole continuum happening in one place,” said Tolbert. “And both companies are happy to have us there in that part of town.” Not as happy as the town named after the golden sunlight is to have both companies shining bright in its backyard.