The Arizona Legislature should not welch on its deal to return some of the sales taxes we pay in Tucson to support Downtown redevelopment.
Members of the Senate Finance Committee were sometimes sarcastic with Downtown redevelopment supporters during a hearing Wednesday in Phoenix. They also expressed disappointment with a presentation by Rio Nuevo Director Greg Shelko.
"My concern with Rio Nuevo has been that's it's very difficult to get a straight answer on anything," said Sen. Barbara Leff, R-Paradise Valley, according to a story by the Star's Daniel Scarpinato. " . . . I think the state general fund money should be returned."
We understand her frustration. The Star has reported on confusing, inadequate financial information provided by Rio Nuevo.
And there's certainly been too much waste and too little progress in the 10 years since Tucson voters approved Rio Nuevo.
But we wonder how long it has been since Leff and other upstate lawmakers visited Downtown Tucson and the Congress Street area west of Interstate 10.
If they had done so in the last four or so months, they'd have seen redevelopment activity finally under way — yes, even a crane in the air — by Rio Nuevo, by private developers spurred to invest because of Rio Nuevo and nonprofit groups encouraged by the city and Rio Nuevo.
Despite its missteps, we believe Rio Nuevo can deliver on its promise — unless state lawmakers smite it dead.
Reneging could be costly
"To take it is like theft," said Glenn Lyons, CEO of the Downtown Tucson Partnership. "We have legislation. We have a deal. We put together this plan. We presented it to them. We are implementing the plan and we've made commitments to private and nonprofit entities. They can't take away the money without all hell breaking loose."
Losing the Rio Nuevo projects — the West Side museums, including the new University of Arizona Science and State Museum, an Arizona Historical Society Museum and Origins Heritage Park, and the Downtown projects like a new arena, improved convention center and an adjacent hotel — would be a blow to this city's future.
Cutting the funds could cost taxpayers statewide millions of dollars: If the city is forced to default on repaying $78 million in bonds secured by future Rio Nuevo revenues, the lawsuits would be legion.
Furthermore, the market repercussions if the state essentially forces the city to default would be devastating. The few who would risk investing in city bonds again would demand exorbitant interest rates.
Tucson's TIF not unique
We also have to ask: Why Tucson?
There are "hundreds" of similar deals draining cash from the state's general fund, according to Kevin McCarthy, president of the Arizona Tax Research Association in Phoenix.
The Legislature appropriated $300 million in 2003 for expansion of the Phoenix Civic Plaza. "It still costs the state millions every year to help fund that project," McCarthy told us.
The state is also paying into two other TIFs in the Phoenix area, he said.
"The Tourism and Sports Authority in Phoenix is a combination; there was a public vote for a car rental and hotel/motel tax and a TIF mechanism at the University of Phoenix Stadium," he said. He said the state is redirecting money to pay bonds sold for the Gila River Bridge.
Attorney General Terry Goddard told us Thursday that the "general rule" would be that "everybody similarly situated has to be treated the same" by the state. But he said he couldn't specify how the rule applies without analyzing more facts.
The Republican ideologues calling the shots at the Legislature could cut Rio Nuevo off at the knees.
"Cutting it out would be a very bad idea," said Steve Moffett, president of Garfield Traub Development of Dallas, which is scheduled to deliver the final designs on March 23 for the 520-plus room convention hotel next to the Tucson Convention Center. "I would guess it would probably kill the hotel project and several other projects Downtown. "I don't think the state is focusing on job development," he told us Thursday. "This project brings 480 jobs at its peak, 280 on average and 400 permanent jobs when the hotel is operating.
"I just hope they don't kill it, not to mention the other construction that will follow after it's built. Every time we've done a hotel like this, it always generates a lot of wonderful development activity downtown."
Much of the "why Tucson" stems from Rio Nuevo's slow-poke progress. Shelko, hired in 2004, is the third project director in nine years. Especially in the early years, ideas were floated and rejected — an aquarium, a rainbow bridge design for the UA science center project, a too-costly desert tortoise arena plan.
Some legislators and local nay-sayers no longer believe in the project or the people involved.
But we see progress. Much of the groundwork has been laid, and much of the work is under way. We believe Rio Nuevo is the best remaining bet for giving Tucson the Downtown redevelopment the boost it needs.
Our community's elected and staff leadership must move swiftly to provide the Legislature with clear information on the status, potential and obligations of Rio Nuevo. To fail to build a strong, clear case that Rio Nuevo is essential to Tucson is to kill the project.
We want Tucson to have the best possible shot at a robust economic future. That means our community must have a vibrant Downtown.
The Legislature must not prevent us from building one.