Rio Nuevo Debate Heated, Bill Passes In House

Voters can thank the legislators (in green) for the extension of Rio Nuevo's sales tax theft scheme until 2035

On Thursday February 22, the Arizona House of Representatives passed a bill sponsored by Representative Mark Finchem that would extend the life of the problematic Rio Nuevo District from 20 years to 30 years, by keeping it going until 2035 but more likely even longer. The debate was heated as Representatives Bob Thorpe and Pam Powers-Hannley tried in vain to protect the taxpayers.

Finchem made incredible claims about the District in his sales pitch.

Finchem added an amendment which would merely funnel the District’s money or other assets that are purchased or left unclaimed by 2035 to the State Land Trust or the Arizona Public Safety Personnel Retirement System (PSPRS). The deal, according to opponents, simply sweeps assets from one mismanaged entity, Rio Nuevo, to another, PSPRS.

Finchem became belligerent and may have crossed the line when he attacked Thorpe’s amendment. Finchem claimed that Thorpe’s amendment was “hostile,” and claimed that Thorpe had not discussed or shared the amendment with him prior to Thursday.

 

In fact, Thorpe had discussed the amendment with Finchem on February 20, and it was provided to all members before Thursday’s debate. Thorpe also emailed all House members:

Members:

Please consider supporting my amendment to my good friend Rep Mark Finchem’s Rio Nuevo bill HB2456. Mark has a copy of my amendment and I’ve spoken to him about it. The amendment and supporting JLBC documents are attached.

My amendment would end new Rio construction, use the annual $14 mil in tax collections for paying off the $60.3 mil in bonding debt, divest management obligations by Oct of 2019 and dissolve the Rio TIF upon repayment of outstanding debts. It does NOT turn over Rio properties to the City of Tucson.

Rio NEVER fulfilled the promises made to the voters in the referendum, to build a convention center, a hotel and an equestrian center. It has been alleged that Rio (and Pima through Rio) have violated the AZ Constitution’s Gift Clause.

According to JLBC:

The state is obligated by bond holders to secure Rio debt. Rio spent over $95.5 mil on Rio owned projects. Rio diverted to non-Rio projects and properties: $44.8 mil to City of Tucson, $2.1 mil to Pima County, $9.2 mil to State of AZ, $7.7 mil to UA, and $2.4 mil to other non-Rio properties.

According to JLBC:

Rio spent over $73 mil on projects that were never completed. From 2011-2016 Rio spent $78 mil, $53 mil on debt. The only project fully completed from 2011-2016 were renovations to the convention center, and more renovations are anticipated. From 2016-2017 Rio spent $23 mil on the convention center ($36 mil was spent to purchase it in 2010), Presidio Stabilization, Heritage Park, Fox Theatre, Southwest Drill, a parking garage, Northwest Lots Church, Rialto Theatre, Citizen Auto Exchange, a hotel, the greyhound terminal, etc. Rio currently has a $10 mil in obligations on projects.

According to JLBC:

Since FY 2005, Rio has spent over of $156.7 mil spent on all projects. The voters authorized Rio to start in 2005 for 20 years, HB2456 would extent it another 10 years to 2035 (most probably longer).

Misrepresenting the actions or impugning the character of another legislator is an ethics violation.

Powers-Hannley questioned the claims made by Finchem, for which he had essentially no rebuttal.

 

As Finchem said, from 2004 to 2009, Rio Nuevo and the city of Tucson squandered over $240 million. No one was ever held accountable for the wasted taxpayer dollars.

In 2010, the Republican controlled-Legislature wrestled control of the District away from the Tucson Democrats. What eventually turned out to be merely a new facade, was put in place by former State Senator Steve Pierce with the appointment of Tucson businessman Fletcher McCusker. Virtually little changed except that from wasting money, the District has become a quasi-bank quasi-government body that benefits from an exemption from Arizona’s Gift Clause.

Powers Hannley stated after the vote, “Rio Nuevo was created by a vote of the people in 1999. In my opinion, the citizens of Tucson never got what we voted for – a cultural and historic venue – an Origins Park at the site of Tucson’s birthplace with the rebuilt Convento, the Mission Gardens, and the Tohono O’Odham village. Twenty years later, Rio Nuevo has built hotels and skyscrapers, and the people of Tucson are still waiting. Since the Rio Nuevo Board has been under the control of the Arizona Legislature and the Governor, the people of Tucson have had absolutely no say in how our money is being invested in our downtown. Now Rio Nuevo has decided to spend millions in taxpayer funds to build a 1000-seat BMX Velodrome on the site of Tucson’s birthplace. Who voted for this? I have talked at length with west side residents. They are incensed over the Velodrome and the fact that projects like the Mission Gardens and the Convento have languished for years. They tell me that the Rio Nuevo Board ‘is ramming the Velodrome down our throats.’ The people created Rio Nuevo with their vote. The people should have a voice in Rio Nuevo.”

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