Finchem Hopes To Extend Rio Nuevo District Funding To At Least 2035

On Wednesday, February 14, the Arizona House Of Representatives’ Ways and Means Committee is scheduled to consider extending the life of the Rio Nuevo District. HB2456, sponsored by Rep. Mark Finchem, will extend the life of the District to 2035 and beyond.

Rio Nuevo has been a source of controversy since the time Tucson area voters passed it into law in 1999. After squandering over $200 million in taxpayer dollars, the “revamped” District has become little more than a Gift Clause dodge for Pima County’s government. By law, government entities in Arizona are prevented from using public funds for private interests, but in 2015, Arizona Attorney General Mark Brnovich issued an opinion that the Rio Nuevo TIF (Tax Increment Financing) District was exempt from the law.

In multiple memos issued by Pima County administrator Chuck Huckelberry, the Gift Clause dodge is referred to as an “economic tool”… “not available” to the County. In one of his most recent memos, Huckelberry argues that using Rio Nuevo to contract with Dunn Construction to build a large office building would be a “game-changer” for southern Arizona. Huckelberry argues this despite the fact that there are no identified tenants for what he describes as “the largest single building built in downtown Tucson since 1985.”

[Read Huckelberry’s JE Dunn Construction memo]

House records show that Michael Gardner, of the AZ Builders’ Alliance, Andrew Greenhill, of the City of Tucson, Edward Maxwell, of the Southern Arizona Leadership Council, and Lea Marquez Peterson, of the Tucson Hispanic Chamber Of Commerce, have come out in favor of the bill. Kevin McCarthy, of the Arizona Tax Research Association has registered an objection to the bill.

Lea Marquez Peterson, a congressional candidate in CD2, is the sister of Rio Nuevo Board member Edmund Marquez.

“In the 36 years I have lived in Tucson, I have seen multiple boom and bust development cycles in downtown,” said Rep. Pam Powers Hannley. “As a result, I have more questions than answers about Rio Nuevo. Downtown Tucson has many new apartment buildings, hotels, bars, and restaurants, thanks to multiple types of tax incentives. At a Rio Nuevo meeting last fall, I learned that the four new downtown hotels are getting a 2.5% state sales tax rebate, as part of their Rio Nuevo development package. How much money are we talking about here? How long will they receive this rebate? Is this the best use of our sales tax? How many of these businesses are dependent upon tax money for their survival? Tax incentives are like Miracle-Gro. When you stop the extra fertilizer, only the strong survive. How many of these businesses are viable without the tax giveaways? I am concerned about the lack of citizen input, as well as the long-term sustainability of Rio Nuevo projects.”

“Rio Nuevo is a local control issue,” continued Powers Hannley. “Yes, it was not managed well by the City Of Tucson early on, but now the citizens of Tucson have no say in how their city is being transformed with tax incentives. Since the Legislature chooses the Rio Nuevo Board, who is really picking the winners and losers in the downtown Tucson development game? Not us.”

Finchem’s bill, which is cosponsored by reps. Todd Clodfelter and Don Shooter, will cover Rio Nuevo’s “contractual obligations incurred by the District before June 1, 2025.” Given that the Dunn Construction project is not expected to be ready for occupancy until 2020, the need for the extension of the District’s legal life is obvious.

The Rio Nuevo board is appointed by the Governor, Speaker of the House and the President of the Senate. In about 2013, the Board maneuvered through lobbyist Jonathan Paton to have legislation passed that removed key constraints that had been imposed in 2010. Those restraints were intended to ensure that the mismanagement and corruption would come to an end.  Under the current legislation Rio Nuevo will continue to spend state tax dollars committed to downtown redevelopment until 2025.

Paton is listed as a contributor to Finchem’s re-election campaign.

Let legislators know how you feel about HB2456 send them an email

Fact Sheet: HB 2456: stadium district; extension; Rio Nuevo

PRIME SPONSOR: Representative Finchem, LD 11

 Provisions

  1. Continues the distribution of shared revenue to the District until July 1, 2035 or upon the completion of the scheduled debt service, whichever occurs later. (Sec. 1)
  2. Authorizes monies paid to the District to be used for:
  3. Debt service for bonds issued by the district before January 1, 2025; and
  4. Contractual obligations incurred by the district before June 1, 2025. (Sec. 2)
  5. Makes technical changes. (Sec. 1, 2)

Additional Information

The Rio Nuevo Multipurpose Facilities District was formed in 1999 through an Inter-Governmental Agreement (IGA) by the municipalities of the City of Tucson, the Town of Sahuarita, and the City of South Tucson as a tax levying public improvement district and a separate legal entity from the City of Tucson. The District receives an incremental portion of state-shared funds derived from Transaction Privilege Tax (TPT), which are collected within District boundaries to be invested in public projects. Expenditure of the funds collected is disbursed and managed by the reconstituted Rio Nuevo Multipurpose Facilities District Board of Directors who, as of 2010, are appointed by the Governor, President of the Senate, and Speaker of the House of Representatives (Rio Nuevo Multipurpose Facilities District).

Current Law

The state disburses TPT revenues through state shared revenue to stadium districts to be used for the components for a multipurpose facility that are owned by the District or that are publicly owned to pay for:

  • Debt service for bonds issued by the District before January 1, 2009;
  • Contractual obligations incurred by the District before June 1, 2009;
  • Fiduciary, legal and administrative expenses of the District; and
  • The design of construction of a hotel and convention center located on the facility site (A.R.S. 48-4204).

TPT disbursements are authorized until the earlier of either July 1, 2025 or until all authorized debt service payments are completed (A.R.S 42-5031).

Related articles:

Moore and Hill reveal the truth about Rio Nuevo (transcript)

Watchdog Moore Resigns From Rio Nuevo

Rio Nuevo maintains tradition with help of Legislature

Specter of Rio Nuevo: Closing arguments in Tucson records case today

Rio Nuevo bill sponsors a mixed bag

9 Comments on "Finchem Hopes To Extend Rio Nuevo District Funding To At Least 2035"

  1. Ah, come on Mark, just more money for the cronies right? Thought so. Renew this POS legislation is a fools mission. What good has it done for the regular citizen of Tucson? Name one? What “public” building has been built? What facilities can the public use for free for their hard earned tax monies? Thought not. Once a tax, always a tax. What lying asses these politicians are. If the projects are good enough to be done then private enterprise should do them, not have some board give taxpayer dollars away like candy. Pathetic. All one has to do is point to Tempe whose building boom along the lake and Rio Salado is in full swing. Didn’t see anyone giving away taxpayers money to build all of these buildings did you Mark?

  2. For several hundred million dollars taken from the rest of the city, we have a ‘revitalized’ downtown that is still a dump with nothing more than pizza and beer joints for the lawyers and government bureaucrats. The rest of the City, crumbling roads and closed businesses.

    • But then the cronies and politicians don’t give a damn about the rest of the city do they? Only their precious little “downtown” and the POS trolley. Great post What… Yea, lets fleece the taxpayers one more time for another 10+ years. BTW what has South Tucson and Sahuarita got out of the deal for lying for the COT. Oh that is right Dan Eckstrom was part of the original Rio Nuevo BS scam wasn’t he…. Thought so.

  3. The Oracle of Tucson | February 13, 2018 at 8:18 am |

    In event anyone didn’t catch the mere mention, it took a vote of the people to pass this boondoggle, but your elected politicians who are addicted to cash are taking it upon themselves to extending the public’s obligation by moving the expiration date.
    Yes in Pima county, the sun never sets on a cash cow.
    With little to show, the Rio Nuevo District plagued from day one with graft, corruption and mismanagement, needs to die as intended. Not wither a slow agonizing death like the hopes and dreams invisioned by the suckers footing the bill.
    The Rio Nuevo District has been on artificial life support from day one. It’s well past time to pull the plug on this cash cow.
    This is after all Pima County, where mismanagement and corruption run hand in hand, so I won’t hold my breath for any real change.

    The Oracle

  4. This is another way for Huckelberry to get his crony deals done. Read the link in this story-The deal is done before the ink is dry on this bill!!?? Please email your legislators via the link above. Stop the renewal of this crony TIF district. Rep. Pam Powers Hannley is spot on! (and we are on opposite ends of the political spectrum) I would much prefer City manager Mike Ortega’s oversight on these monies than this crew from Rio Nuevo. Rep. Finchem is my representative but I have to respectfully disagree with him on this one.

  5. OH and by the way…Where is the $50 million Caterpillar headquarters? Before they embark on more crony deals….deliver on that please!

  6. David Thompson | February 13, 2018 at 10:31 am |

    Rep. Finchem has finally given up his squeaky clean persona. It would be interesting to know what his sponsorship of this Crony Capital Concoction Cost. Clearly everything is for sale, even outside of Chicago.

  7. the smile only a reconstructive dentist can buy…

  8. Working Man Blues | February 14, 2018 at 4:58 am |

    Reread some Monty Python one liners this week. This one seemed particularly fitting.

    “Apart from the sanitation…what have the Romans ever done for us?”

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