Marist Maneuvers

Quiet negotiations set the stage for historic preservation

Resurrection inched closer last week for the beleaguered Marist College, as the city wrangled with the Roman Catholic Diocese of Tucson over restoring a property the church hasn't used in years—one which preservationists and the City Council hope to rescue with federal blight-abatement funds. (See "Marist Tempest," Currents, July 26.)

Possibilities include transferring ownership of Marist from the diocese to a limited liability corporation. This clever maneuver could smooth two pernicious snags: First, it would eliminate concerns that the diocese might somehow profit from the taxpayer-funded mending of a ragged building right next door to downtown's St. Augustine Cathedral.

Second, it could make Marist eligible for robust tax credits, ratcheting down restoration costs and transforming the structure from a black hole of hidden headaches into a sexy prospect for development as a restaurant, a hotel or office space for downtown's bountiful barristers.

Not surprisingly, it is lawyers who are currently hashing out Marist's future—and wading through a legal thicket laid by the City Council at a July 10 study session. That's when Ward 6 Councilman Steve Kozachik questioned using $1.1 million of Tucson's federal Community Development Block Grant money to stabilize Marist, which has been going downhill since a 2005 storm caused its corners to crumble.

Ultimately, the council demanded stiff conditions for any deal with the church. Among them: The city could block the sale of the Marist building to an unworthy buyer, or take title if it didn't sell. If it was sold, any profits would be returned to the city's federal grant pool, and some portion of the building would be dedicated to public use.

A few weeks later, everyone is still tiptoeing though this new terrain. "When we were at the City Council meeting, they brought up all these conditions that were different from what was originally proposed to us over the last year or so," says John Shaheen, property and insurance director for the diocese. "Originally, the idea was for the city to take over the building and use funds they claimed they had for (restoration). They asked if we'd be willing to give them the property and the building, and we said, 'If it's good for the community, and it's good to save the building, then let us know what we need to do.'"

Then came the council vote, with its plethora of mandates. Shaheen says the diocese's attorney is now examining the details.

So is City Attorney Mike Rankin, who describes ongoing discussions among city staffers about squeezing the council's stipulations into a tight contract. "I've also had a preliminary conversation with the attorney for the diocese, about how an agreement might be structured to ensure that those conditions are met," Rankin says. "We haven't started hammering out the deal points yet."

While Rankin doesn't recommend the city take possession of Marist, his marching orders are to wrest more control over the building—down to a conservation easement protecting the historic aspects of its façade. Ironically, those juxtapositions might find common ground in a limited liability corporation.

"For a lot of reasons, it might make sense for Marist to be transferred into ownership of an LLC," he says. "That transfer could also be an opportunity to record some restrictive covenants on the property."

Such restrictions could benefit the diocese as well as the city, by making sure it didn't turn into, say, a titty bar. "I'm sure they wouldn't want it to be used for adult entertainment," Rankin says.

Rankin insists that both sides are aiming at the same target. "I think the diocese has been pretty up front in saying they want to see the building preserved, and they aren't trying to make a windfall out of it."

The timetable for any agreement remains open-ended, he says. "But we don't want it to linger too long, because people will forget about it, or get involved in other things."

Then, of course, there's the weather, which has already taken a toll on this once-gorgeous building. Erected in 1915 by master builder Manuel Flores, Marist offers robust flashes of Italian Renaissance and Spanish Colonial revival styles in Arizona's sole remaining three-story adobe.

While the building may be a gracious nod to the past, its survival offers a peek into modern preservation strategies—including the proficient use of federal tax credits. That process is potentially under way, thanks to the Tucson Historic Preservation Foundation, which made the Marist eligible for restoration credits by gaining it a spot on the National Register of Historic Places.

Arizona's State Historic Preservation Office would need to sign off on Marist's renovation plans, following guidelines set by the U.S. secretary of the interior. Once those standards are met, some 20 percent of restoration costs could be offset from tax liabilities. Since only taxpayers can use tax credits, both the church and the city are left out of the mix, making the creation of a taxpaying LLC even more attractive.

In the end, say some observers, those credits could nudge the cost of rescuing Marist down from an estimated $4 million to less than $2 million, making it commercially realistic.

In the meantime, all of the key players are treading lightly, at least publicly. Among them is Michael Keith, CEO of the Downtown Tucson Partnership, which has floated a request-for-interest in Marist among developers and investors.

Keith declined to discuss specifics of the LLC idea, instead referring me back to the diocese. "It's really up to them to go forward at this point," he says.

Having spent several years helping to develop numerous vintage Tucson properties, Keith doesn't see a downside to leveraging Marist back from the brink. "Different people have different interpretations of the necessity to capture all the tax credits here," he says. "As a developer, of course, I see it as every cent you can get is going to help make this a viable project."

In the end, says Keith, resurrection of Marist "is really a fairly simple deal: You're going to use federal tax money to stimulate a redevelopment district downtown. You're going to create jobs—both construction and permanent jobs—and you're going to create sales tax. You're going to anchor the west side of downtown, which has had very little attention paid to it, and begin to provide some support for a new and revitalized convention center. And you're going to preserve a nationally significant historic building."