Rio Nuevo Bill Set To Sail Through Senate

Invitation to Sen. Steve Smith CD1 fundraiser. Car salesman Jim Click visiting lawmakers in the backroom. Click, lobbyist Jonathan Paton and Rio Nuevo Chair Fletcher McCusker await the start of the hearing.

On Monday, under the leadership of Sen. Steve Smith, the Arizona Commerce and Public Safety Committee passed Rep. Mark Finchem’s HB2456, which will extend the life of Rio Nuevo. The bill passed exactly one week before a scheduled fundraiser for Smith’s congressional run by Rio Nuevo supporters.

Roger Score, of Tucson, records the comings and goings before the hearing of HB2456

Exactly one week to the day, Tucson car salesman Jim Click, and Rio Nuevo Board member Edmund Marquez, along with current and expected beneficiaries of Rio Nuevo are hosting a fundraiser for Smith’s Congressional District 1 race.

While Click was able to meet with Smith prior to a hearing of the bill, Smith advised opponents of the bill that they would have one minute and a half to express their concerns with the highly controversial bill.

When it was clear that the bill would pass, Smith cast the final vote. He was able to vote no to appease opponents momentarily, but will surely change his vote to a yes if needed for passage on the floor.

Hurry up about it we have donors to hear from

Arizonans have grown accustomed to being mistreated by their elected representatives, so when Smith declared that speakers would only have a moment to address the Committee, few attendees were surprised. As evidenced by the video of the hearing, most speakers tried to accommodate the important panel.

Kevin McCarthy of the Arizona Tax Research Association ATRA

Dr. Jo Ann di Phillipo of Pima County Supervisor Ally Miller’s office addressed the Committee with her concerns about the abuse of taxpayer dollars for lobbying services.

Rio Nuevo payments to lobbyist Jonathan Paton
2013 19-Aug 25,000.00 Paton & Associates RN Legisture Consultant
2014 29-Jan 20,000.00 Paton & Associates RN Legislator
2014 14-May 20,000.00 Paton & Associates RN Lobbyists
2014 14-Oct 45,000.00 Paton & Associates RN Lobbyists
2015 8-Apr 20,000.00 Paton & Associates RN Lobbyist
2016 7-Mar 45,000.00 Paton & Associates RN Legislative Consulting
2016 9-May 20,000.00 Paton & Associates RN Legislative Consulting
2017 20-Jun 41,500.00 Paton & Associates RN Legislative Consulting
2018 11-Jan 50,750.00 Paton & Associates RN Legislative Consulting
 Total 287,250.00 Paton & Associates RN Legislative Consulting

Sen. Catherine Miranda bristled when di Phillipo raised the issue of the over $280,000 spent on lobbyist, former failed CD1 candidate, Jonathan Paton. Miranda’s body language betrayed the cozy us-vs-them relationships legislators and lobbyists have forged over the years. The fact that Paton was a former legislator seemed to add one more barrier between the public and their public servants.

Smith appeared to be particularly eager to shut down the testimony of Rep. Bob Thorpe and Supervisor Ally Miller.

Rep. Bob Thorpe

Pima County Supervisor Ally Miller

Smith rearranged the list of speakers to ensure that Rio Nuevo chair Fletcher McCusker would have the last word. McCusker was denied that honor by Click who rose to offer praise for McCusker and the legislators, who had and would vote for the extension of the most expensive failed experiment paid for by Arizona taxpayers in the state’s history.

Rio Nuevo Board Chair Fletcher McCusker

Tucson car salesman Jim Click

What changed?

On Friday, June 26, 2015 Rep. Mark Finchem, the Rio Nuevo bill’s sponsor, sent an email to House Speaker David Gowan:

—–Original Message—–

From: Mark Finchem []
Sent: Friday, June 26, 2015 6:38 AM
To: David Gowan; Steve Montenegro

Good morning Mr. Speaker. I am concerned that there does not appear to be a watchdog to hold the Rio Nuevo Board accountable for their performance? This entire affair has been plagued with the appearance of misappropriation and misbehavior.

Mark Finchem, Representative
Arizona’s Legislative District 11
(520) 955-7695
1700 W. Washington, #337
Phoenix, AZ 87005

Finchem’s email was sent in response to news reports that Click’s good friend Marquez was appointed to the Rio Nuevo Board. Since then, the only substantive change to the District was made a few days before the appointment of Marquez; the Arizona Attorney General, in response to a question from Senator Bob Worsley, issued an opinion that the District is exempt from the State’s gift clause.

Since that time, Rio Nuevo has become a vehicle through which Pima County officials can dodge Arizona’s Gift Clause as well as a taxpayer funded lending institution.

In February, after HB2456 was passed in the House, the Arizona Daily Independent reported that Pima County administrator Chuck Huckelberry, in multiple memos, refers to the Gift Clause dodge as an “economic tool”… “not available” to the County.

One of Finchem’s selling points for the bill was crafted on the basis of a Huckelberry memo in which he discusses using Rio Nuevo to contract with Dunn Construction to build a large office building that he claimed would be a “game-changer” for southern Arizona. In his memo, Huckelberry claimed that the attention from a world-class contractor like JE Dunn was a coup of sorts. Finchem has repeated that claim.

In October 5, 2016, the Arizona Association for Economic Development published “A Case Study on the Impact of TIF Districts.” Angela Talbot of JE Dunn sits on the Arizona Association for Economic Development 2017 / 2018 Board of Directors.

In the article, McCusker discussed Rio Nuevo:

The Rio Nuevo TIF sunsets in 2025, the Board is going before the Legislature this fall to propose an extension to 2050. “We are about 50 percent of where we want to be to declare ourselves done,” McCusker said. Also in proposal will be a request for an advance of $70 million to pay off the existing bonds. McCusker believes if they can pay off the current debt, they will be able to bring in eight times the advance. With 50 percent of every new dollar from sales tax being contributed to the TIF, Rio Nuevo plans to become self-perpetuating long before 2050.”

Thorpe tries to torpedo crony capitalism

In the House, Thorpe offered an amendment in alignment with the recommendation of Kevin McCarthy. Thorpe’s amendment would end new Rio Nuevo construction, and use the annual $14 mil in tax collections to pay off the $60.3 million Rio Nuevo owes in bonding debt. Thorpe’s amendment would also divest management obligations by October 2019 and dissolve the Rio Nuevo TIF charter upon repayment of outstanding debts.

Thorpe, a Reagan fiscal conservative who rejects both Democrat and Republican crony capitalism, has said he believes that prosperity flourishes when government gets out of the way of the private sector, and that it stagnates when taxpayer dollars compete with private business — to build empty hotels and bridges to nowhere.

Thorpe argued that Rio “never fulfilled the promises made to the voters in the referendum, to build a convention center, a hotel and an equestrian center.” And it has no intention of doing so now.

In fact, the very feasibility study conducted of one of the latest hotel projects shows that it is not viable without subsidies. The study of the now vacant Arizona Hotel owned by Humberto Lopez, a host of Smith’s fundraiser, was conducted as part of the pitch to the Rio Nuevo Board.

According to the proposal by Hotel Arizona’s owner HSL Properties (Humberto Lopez), HSL and its investors will invest $20 million to renovate the hotel, which has been closed since 2012.

Hopeful wave

This week, the Tucson Police Officers Association revealed that staffing was now at the same level as the force was in 1988. As the most dangerous city in Arizona, Tucson has had a difficult time attracting the very tourists which are supposed to be drawn to the area by Rio Nuevo’s amenities.

As a result, the businesses that had once popped up due to the promise held by Rio Nuevo have gone away. One of the oldest down town retailers shut its doors in December.

The situation has grown so dire, that Rio Nuevo was forced to become a lender this year. In August, the Rio Nuevo Board unanimously approved lending as much as $250,000 to the Flores family’s Flores Concepts, “which plans to assume control of one shuttered nightclub and one operating club, along with an adjacent vacant building,” according to a Rio Nuevo press release.

Carlotta Flores sat on the Rio Nuevo board for years.

According to the press release, the Flores “negotiated an agreement to buy out the lease interest of the H2O Discotec at 61 E. Congress St., Zen Rock nightclub at 121 E. Congress, and the former Betty Gay building at 125 E. Congress. Flores Concepts intends to renovate, rebrand and reopen all three establishments.”

H2O and Zen Rock were part of the hopeful wave of food and beverage establishments developed on Congress Street in 2010.

“The Board authorized the Rio Nuevo Multipurpose Facilities District’s executive officers to negotiate and finalize a loan of up to $250,000 to Flores, the repayment of which would bear interest and be secured by a pledge of assets and a guaranty,” according to the press release.

Related article: Rio Nuevo Debate Heated, Bill Passes In House

7 Comments on "Rio Nuevo Bill Set To Sail Through Senate"

  1. Wonder how the sheep feel about this one? Bet they love this one too. How pathetic. More tax money for the cronies. Rio Nuevo, the gift that just keeps giving…to the cronies.

  2. The Evil One | March 14, 2018 at 6:02 am | Reply

    Even more Democrats posing as Republicans.

  3. Dwayne Wolfswinkle | March 14, 2018 at 8:14 am | Reply

    Well it is obvious every Politician has a price .Those who allegedly represent Southern Arizona clearly represent those with deep pockets more than those who pay those regressive sales taxes to fund crony capital projects.

    Thank you Mark Finchem .

  4. David Thompson | March 14, 2018 at 8:30 am | Reply

    The Rio Nuevo TIF sunsets in 2025, the Board is going before the Legislature this fall to propose an extension to 2050. (from above)

    Clearly Smith and Finchem told them there is no way we can get 2050 through now . So I guess the plan is to kick the can down the road to 2026 to go for 2050.

    BTW I went to see who else sponsored this bill and Ta Da , Todd Clodfelter and Don Shooter (expelled) helped Rep Finchem.

    Perhaps some of the common folks could at least attend the fund raiser the “cronies” at\are putting on for Steve Smith. Can you imagine how much more money there will be if Smith gets to Washington as a Representative.

  5. McCusker NEEDS LEGISLATORS to Believe … [McCusker believes] if they can pay off the current debt, they will be able to bring in eight times the advance. With 50 percent of every new dollar from sales tax being contributed to the TIF, Rio Nuevo plans to become self-perpetuating long before 2050.”

  6. Albert Lannon | March 14, 2018 at 2:53 pm | Reply

    And to think that I voted for both Smith and Finchem. Maybe the commenters on ADI are right — we are too dumb to vote. Or maybe it’s that if the gods wanted us to vote they’d give us real candidates. Or maybe it’s time we stopped beefing and moaning and put together a coalition to run OUR candidates. Green Tea Coalitions have been active in Georgia and Florida, uniting Tea Party Patriots, the Greens, and minority communities around some energy issues. Maybe it’s time to stop name-calling and to look for who we can work with around a few basic issues and candidates. Like transparency and accountability, like ending corrupt cronyism and getting a new County Administrator, like prioritizing road repair without new taxes. Maybe it’s time to quit belly-aching and get off our collective butts and do something. There are lots of Tea Partiers, Libertarians, Greens, Democrats, Republicans and Independents who should find common cause in changing our representation in Pima County and the State Legislature. Let’s look past the labels and see what we have in common and where we can go with it. It’s time.

  7. Desert Viking | March 15, 2018 at 1:05 am | Reply

    I really thought Mark Finchem was different, but he’s clearly just another typical pol.

    I wonder what form his reward from the powers-that-be will take?

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