There’s more trouble in downtown Tucson for our friends at the Rialto Theatre Foundation.
This time, the heat is coming from the new Rio Nuevo Board, the new gang of people who were appointed to the board by Gov. Jan Brewer and Phoenix-area GOP lawmakers.
So what’s one of the board’s first actions? Targeting the one Rio Nuevo project that has succeeded in bringing hundreds of thousands of people downtown to enjoy shows and spend money—which was the whole reason the Rio Nuevo Board acquired the theatre in the first place.
Nonetheless, the Rio Nuevo Board has threatened to evict the Rialto Theatre Foundation from the Rialto Theatre unless it kicks over hundreds of thousands of dollars in “back rent” or signs a new draconian lease that would make it impossible to stay in business.
We didn’t get a phone call back from Jodi Bain or Mark Irvin, the Rio Nuevo Board members who are out in front on this one, but we did hear back from Robert Gugino, the attorney for the Rio Nuevo Board.
Gigino tells us that the Rio Nuevo Board is meeting today to discuss the Rialto situation.
“Hopefully, there’s some common ground that can be reached,” Gugino says.
It’s a complicated story, but here are the basics in a nutshell: The Rialto Theatre Foundation has a 50-year lease
of the theatre from Rio Nuevo, but it can claim credits against its monthly rent payments as long as it improves the theatre.
One of those key improvements was a sound system that cost somewhere in the neighborhood of $300,000—which the new Rio Nuevo board says doesn’t count as an improvement, even though there’s documentation that the city’s previous Rio Nuevo director, Greg Shelko, said the sound system would qualify.
In an emailed response to Rialto Theatre Foundation Executive Director Doug Biggers regarding whether the sound system would count toward a capital improvement, Shelko said: “[S]ound system as permanent, most definitely yes.”
But Gugino says that e-mail was only one part of a larger exchange and that the Rialto Foundation needed to take further legal steps to properly claim credit.
Gugino tells us that improvements to the theatre’s bathrooms would qualify as a capital improvement, but the sound system does not qualify because it can be removed from the theatre. The sound system was also financed, so it could potentially be repossessed.
Look, we’ll admit up front that we have a bias in this case (Biggers is TW’s former publisher and a Friend of The Range), but that kind of priority seems fundamentally absurd to us. If you’re going to make the theatre a successful venue, doesn’t it make more sense to improve the sound system than to improve the bathrooms?
The lawyers from the Rialto Theatre Foundation will enter another round of talks with the lawyers from the Rio Nuevo Board after today’s meeting, but if the talks don’t go well, Biggers tells us the foundation will have no choice but to enter into a bankruptcy proceeding to reorganize its debts and seek a new lease under the protection of the bankruptcy court.
That doesn’t mean the Rialto is going out of business; the theatre has a big fall season lined up and the shows will go on. But the legal maneuver does mean that the Rio Nuevo Board can’t kick them out of the theatre while they’re under the protection of the bankruptcy court.
We’re left to wonder why the Rio Nuevo Board would put so much effort into grinding down the one successful element of Rio Nuevo.
Let’s hope the Rio Nuevo Board realizes that it makes a lot more sense to negotiate with the foundation rather drive them into bankruptcy court—especially since the taxpayer will be on the hook for Rio Nuevo’s legal bill, which could end up exceeding whatever back rent that Rio Nuevo board members believe they’re owed.
Speaking of legal fees: Gugino tells us that his firm doesn’t break out the costs of dealing with the Rialto Theatre Foundation from the other costs of representing the district.
Gugino said we’d have to file a public-records request if we wanted to know how much he’d been paid to date. We’re in the process of doing that now.
This article appears in Sep 9-15, 2010.
Good work, Jim! In addition to the dispute over monies the Foundation has already invested to improve the Theatre (ergo, our claim that we don’t owe them any “back rent), what’s unfortunate is Rio Nuevo’s insistence that the Rialto should be a source of “revenue” for the District. The agreement we operate under clearly contemplated that for the first ten years, the Rialto Theatre Foundation would not pay “rent,” but re-invest those dollars into improving the Theatre. It only makes sense, right? Unlike the Fox Theatre, which received more than $9 million in Rio Nuevo money and was renovated completely, the Rialto is a work in progress, and it was always understood that it would take time to “finish” it. In the meantime, we were able to re-open the Rialto quickly and operate it while we incrementally improved the facility.
Although we have repeatedly pointed out to Rio Nuevo that they haven’t taken the time to understand what the building needs and work cooperatively with us to make those improvements, they continue to assert that their “asset” needs to be “performing.” I guess that’s what happens when you have a bunch of political appointees from Maricopa County in charge of a project meant to revitalize Downtown Tucson.
Its obvious that Doug and his people at the Rialto are in way over their head. Curtis who is running things at the Rialto has no venue management experience. Its obvious the Rialto isnt making any money. Again this goes back to lack of experience on the Rialtos part. They are paying way too much for shows. Charging too much for tickets and the basic costs to put on a show are too high.
The Rio Nuevo Board had better get Doug and his inexperienced staff out of there before they completely run the place in the ground. Every month they are just piling on the debt. The hole gets bigger and bigger. Non-profit doesnt mean lose money.
If the Rialto was making enough money every month to pay the rent or re-invest that money as a credit back into the theatre the Rio Nuevo board wouldnt be coming down on them.
Jim this should answer your question why the Rio Nuevo Board is putting so much effort into going after the Rialto. ITS NOT SUCCESSFUL! Thats the bottom line.
Doug Biggers made alot of promises and commitments when he took over the Rialto. He needs to admit that he hasnt been able to honor by his end of the deal and get out of there!!
Now this $300,000 sound system you speak of. Where is the rest of it? The PA thats its in the Rialto is a 1/3 of that! AT MOST!!
Sounds like somebody is just a tad bitter and thinks they can do the job better. “EventAuditInc” what is that, your company name? Come on! I live in Phoenix but I have been to many shows at the Rialto and I have always been impressed. I have also worked with Curtis and he sure as hell knows what he is doing. You are full of it. DAMN THE MAN! SAVE THE RIALTO!
If Tucson loses it’s only theater of this size does this mean Phoenix will get more cool concerts?
Just asking – – – –
i live in gilbert and if i have the means, i’ll come down for a rialto show any day over seeing the same band in phoenix/tempe (at the marquee, for instance). tucson music fans are pretty awesome – phoenix area fans? not so much… some of the best shows i’ve seen have been at the rialto including some of my favorite bands, like mogwai and the deftones (a few times, most recently in june). the rialto is the perfect venue for bands who draw a crowd bigger than a club can handle – but still small enough to feel intimate. i only wish i could afford to see jimmy eat world play there next week (not that it’s too pricey (in general) but when you’re unemployed and you don’t receive a ticket as a gift then it’s a bit steep).
i didn’t know all this was going on with the rialto (my fault) and it makes me sick. the rialto is a great venue that brings awesome acts to tucson, where people come out in droves, not only spending money on the show but spending their money in other businesses around downtown (i know that’s the case for me and my friends). the drive down to tucson and back is awful but in the end, it’s worth it.
here’s hoping that things go well for the rialto theatre foundation so music fans like myself can continue having great times seeing awesome bands at the rialto.