Guest Commentary

It is important to remember that the Rio Nuevo legislation is a partnership between the state of Arizona and the city of Tucson. Both entities have a vested interest in its success.

Tax-increment financing (TIF) legislation is a legal template used across the country to finance sports stadiums and similar projects for municipalities. In essence, the state trades some short-term tax money for long-term increased tax revenue, and the city gets a stadium, or another “primary multipurpose facility.”

Alas, in the long run, sports stadiums and the like tend to be big money-losers for municipalities. They are expensive to maintain, and the sports teams often leave because there’s always another market that will cut them a better deal.

In the case of Tucson, we skipped that whole building thing and went right to losing money.

From the beginning, the pre-2010 Rio Nuevo board and the city of Tucson ignored the intent of the legislation—and the recipe that would have made it work. No serious effort was made to improve and develop the “primary facility,” which, in the case of Tucson, was the Tucson Convention Center. The city of Tucson had oversight responsibility for the TIF district, but no one was overseeing the city of Tucson.

By early 2009, the state started to get a little unnerved. It had diverted a lot of sales-tax revenue into this partnership, and things did not look a whole lot different than they did in 2000. Around that time, Greg Shelko, the Rio Nuevo director, gave a presentation to the state Legislature. It was not well-received. Sen. Barbara Leff, R-Paradise Valley, was quoted as saying, “My concern with Rio Nuevo has been that it’s very difficult to get a straight answer on anything,” and, “I think that the general-fund money should be returned.”

In 2010, the state stepped in. It replaced the existing board with a “reconstituted board” of state appointees. This year, the state Attorney General’s Office opened an investigation into the activities of the pre-2010 Rio Nuevo board.

I am not aware of specific selection criteria regarding the selection process for the reconstituted board, but the members must have done something really bad in a former life. I am sure that if they knew what they were in for, they would have moved to another state and changed their names to avoid selection. They are tasked with trying to make sense out of 10 years of mismanagement, with record-keeping so poor that there is no accurate accounting of the money—but there are chunks of real estate to which the titles are in question. It took months for Wells Fargo to determine if the district really owned the money in the district’s account.

As if that’s not enough, it’s an election year. We have seen Republicans rub the noses of Democrats in Rio Nuevo, and Democrats try to blame it on Republicans. For example, Jeff Rogers, head of the Pima County Democrats, has tried to tag Republican mayoral candidate Rick Grinnell with the moniker “Rio Nuevo Rick,” because Rick is on the Rio Nuevo board. What Rogers doesn’t mention is that Rick is on the reconstituted board assigned by the state to clean it up.

Oddly, Republican Steve Kozachik is going to serious lengths to criticize the reconstituted board. He is angry that they have yet to fix up the primary facility, the TCC, even though that is the city’s responsibility, according to the lease agreement. He claims that the new board has money restricted to TCC expenditures—but what he does not say is that the money is restricted to capital improvements, not repair and maintenance. In any event, for a member of the City Council—which was responsible for this Rio Nuevo mess—to criticize the replacement team shows a level of chutzpah beyond my ability to describe, even if he was not involved in the Rio Nuevo debacle.

The state is justified in assigning a new board to protect its interests—and our interests as citizens of Arizona. We should also be grateful that the state will end up protecting us from the incompetents we elected.

This article appears in Nov 3-9, 2011.