Thursday, October 13, 2011

The Rio Nuevo Board Fires Back at the City, Kozachik

Posted By on Thu, Oct 13, 2011 at 2:00 PM

From our sister publication, Inside Tucson Business:


The Rio Nuevo Multipurpose Facility District Board has issued a statement saying the Tucson City Council and city officials have been dishonest in statements about the board and the ongoing dispute over the Tucson Convention Center.

In a Thursday news release with the headline, "Attacks on the new Rio Nuevo District Misdirected!" the board lists six points on which it says City of Tucson officials have been inaccurate or false in statements about the deteriorating relationship between the two entities.

Among the claims in the unsigned statement, which board member Jodi Bain sent to members of the media, the district said the city has not worked in good faith with the district and has not met its obligations to the Tucson Convention Center.

The Rio Nuevo Board also defended its recent legal claim against the city, in which it demands $47 million and three downtown properties.

City officials have said the claim would effectively bankrupt the cash-strapped city and force a reduction in essential service.

The city has until December to settle the claim, after which the board could move forward with a lawsuit.

"The Notice of Claim potentially preserves the District's and taxpayers' right to various land and other assets," according to the statement. "It represents that the land west side of I-10 and the Arena land to the east of I-10 should be owned by the District to begin to develop it effectively so the community can move forward from the malfunctions of the City managed old Rio Nuevo."

The statement mentions specifically Tucson City Councilman Steve Kozachik, who has been critical of the board and what he views as a lack of ambition to fix problems at the TCC.

"Councilman Kozachik has offered an angry, sarcastic and unwarranted assault on the District that is both counterproductive and ill-informed," the statement says.

The letter repeats a claim that board members have made that the city mixed Rio Nuevo funds with its own during the more than decade in which the city effectively ran the downtown revitalization project.

During that time, about $230 million of tax-increment financing money earmarked for downtown revitalization was spent, but few of the projects originally envisioned were completed.

The lack of progress and inability to account for the money prompted the Arizona Attorney General to investigate Rio Nuevo finances. That investigation continues.

The text of the letter is below the cut.


Attacks on the new Rio Nuevo District Misdirected!

This newly appointed Rio Nuevo Multi Facilities District (“District”) Board was developed to address some very serious concerns voiced by the Arizona State Legislature. Over the last 18 months we have reviewed thousands of documents, payouts, financial statement and entertained various proposals to ensure the integrity of the investment by taxpayers. Our current process is intended to eliminate future suspicions and questions of integrity so we can all move forward as fast as possible.

TRUTH OR FICTION:

1. Fiction: The Notice of Claim served on the City of Tucson (“City”) in September 2011 is a threat and is
meant to bankrupt the City.

Reality: This is false. The Notice of Claim potentially preserves the District’s and taxpayers’ right to various land and other assets. It represents that the land west side of I-10 and the Arena land to the east of I-10 should be owned by the District to begin to develop it effectively so the community can move forward from the malfunctions of the City managed old Rio Nuevo. AND, that no less than $47 million of District and taxpayer money was spent by the City there according to the City’s own accounting.

2. Fiction: The Notice of Claim is not based on any new data.

Reality: This is false. Based upon the documents uncovered and made known to the District and its attorneys since 2011, new information was found and pieced together with the term sheet issues demonstrating the basis of the Notice of Claim.

3. Fiction: The City has fully cooperated and worked in good faith with the District.

Reality: This is unfortunately not accurate. District consultants continue to struggle with City production of information and documents. A notice of claim and other legal options put the City and the District on a timetable and requires timely and accurate production of information and documents.

4. Fiction: The new Board is not interested in improving the TCC.

Reality: This is false. The District’s new Board inherited the situation in which we find ourselves and is dedicated to making appropriate improvements to the TCC and the revitalization of downtown Tucson. The new Board was not part of the past “gross financial mismanagement” which did not allocate appropriate funds to the TCC.

5. Fiction: The City met its obligations to the TCC.

Reality: This is unfortunately not accurate. Since the City sold parts of the TCC to Rio Nuevo, the maintenance, upgrades, repairs and improvements are, by the terms of the TCC lease to the City (written by the City), are actually the responsibility of the City as the tenant. Clearly, the TCC needs maintenance, upgrades, repairs and improvements which the City has not properly maintained.

6. Fiction: The District has spent $0 on the revitalization of the TCC and Downtown.

Reality: This is false. The District paid out on the east entrance and defunct proposed hotel and convention center
no less than $15,000,000. At least $2 million was used to update the central plant and other utility matters at the
TCC per the City’s own accounting.

TCC IMPROVEMENTS:

City Mayor and Council Kill the TCC Joint Taskforce.

At the October 5, 2011 City Council Meeting, the Mayor and Council unanimously voted to kill the TCC Taskforce and break off all communication with the District except through the City Attorney. The TCC Taskforce should not have been a victim of the Mayor and Council’s short- sighted reaction. We remain committed to moving ahead in good faith on all matters of review. This reaction only hurts efforts to provide funding for appropriate investments in the TCC. The District passed its own motion to continue to work with the TCC and its staff to identify priority matters appropriate for potential funding with or without the City’s participation. Our efforts to meet with the TCC staff were denied. With or without the City’s cooperation, the new Board will work to fulfill its mission. Don’t forget any work on the TCC not only requires their cooperation but requires Mayor and Council approval.

UNWARRANTED ATTACKS & INTERRUPTION OF TRUTH:

Councilman Kozachik has offered an angry, sarcastic and unwarranted assault on the District that is both counterproductive and ill-informed. In recent Ward 6 Newsletters, he selectively outlines various contentious open items between the City and the District. He has misinformation and misrepresented that agreements had been made and agreed upon between the City and the District. Councilman Kozachik did not become involved in the City controlled old board until after his election in 2009. When Councilman Kozachik ran for Ward 6 office, he ran on a platform of cleaning up the mess created by the then-City Mayor and Council. Let the District continue to work forward unfettered by political rhetoric.

What is conveniently forgotten by the City Mayor and Council is that from 1999 until 2010 the District was controlled and managed by the City. The City entrusted and delegated the District’s financial responsibilities to City Staff and comingled District taxpayer funds with City funds. The City staff and Mayor and Council have an obligation to truly cooperate and work hand in hand with the District to clean up the debacle… not stall uncovering the truth. Huge amounts of taxpayer money have been spent and we all have a right to know what happened and collect our assets.

BANK BOND STATEMENTS.

Wells Fargo Bank still has not provided the District control of its proprietary bond and other accounts. The District did begin to receive some information late last week from Wells Fargo now being reviewed. Please see the attached letter.

PROGRESS:

The new Board continues to work to identify the assets that rightly belong to the District for development and to move forward with the goal of building a better Tucson. We await completion of the forensic audits, preserving the District’s right to claims and acting in the interests of the taxpayers.
The District Board is a group of dedicated group of volunteers who spend countless hours weekly in an effort to maximize taxpayer resources to shape a vibrant downtown corridor for Tucson and bring closure and accountability to the citizens of Tucson and the State of Arizona. Let the District continue to work forward free from political rhetoric.

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