Downtown Turn-Around

FOR ABOUT A year now, television news crews have been wandering downtown Tucson, dispatching an occasional report about how trashy the neighborhood is. Our daily newspapers--both of which deserted downtown a quarter-century ago--have opined that downtown could really use more flowerpots. City Council members have complained that downtown has become an eyesore.

The solution to these problems, say the media and our civic leaders, is a Business Improvement District, or BID, which would help clean up and provide additional security downtown. Last month, to a flurry of good press, the Tucson City Council voted to begin the process of establishing this BID.

Feature But in the rush to tell us how the BID was going to clean up the city center, some details have been glossed over--like the fact that the City of Tucson is preparing to create a taxing authority that has yet to name a board of directors, or even a method of choosing a board.

As the BID comes up for final approval at this Monday's City Council meeting, three council members express concern about the district's structure.

While they're not opposed to the concept of the BID, the council members--Steve Leal, José Ibarra and Jerry Anderson--say they're unhappy with the BID's budget and boundaries.

More importantly, they're concerned the proposed--and nebulous--board of directors is weighted down with real-estate professionals who may stand to profit at the expense of the local merchants who have invested in downtown through the last lean decade.

"What's been the small merchants' biggest fear?" Leal asks. "That they would be used to increase property values and then priced out of the neighborhood."

Ibarra says the most important question is: "How are we going to be able to preserve our local businesses and make sure a Chili's, a Macaroni Grill, or a Starbuck's doesn't come in here, take over downtown, and we lose our local businesses? I know that's happened in Cleveland and in Tempe, where the big businesses came in and basically bought everything up, and the small businessman at someplace like the Grill got put out of business because he couldn't compete with these corporations."

ON THE SURFACE, the BID has considerable promise. Primarily organized by property manager Sheila King and attorney Thomas Laursen, who have been working closely with Carol Carpenter of the city's Economic Development Office, the district covers most of the downtown area southwest of the Union Pacific railroad tracks. The Steering Committee hopes to raise about three-quarters of a million dollars annually by assessing fees from downtown property owners and various levels of government.

That money would pay for cleaning crews to pick up garbage, eliminate graffiti, maintain flowerpots and sweep streets. The BID will also provide additional security guards and "ambassadors" who'll help disoriented visitors find their way around the neighborhood.

Cleaner streets and better security--nobody can argue with that. But it's the details of the BID that have some council members cautious of the arrangement.

To begin with, there are the curious boundaries of the BID. As it's currently drawn up, several properties will not have to pay an assessment, including the Holiday Inn, La Placita (which is owned by legendary land speculator Don Diamond), and a stretch west of the Tucson Convention Center owned by Alan Norville. The BID's Steering Committee also exempted the Clarion Hotel on the corner of Scott Avenue and Broadway Boulevard, creating an island in the middle of the BID--a move that's drawn criticism.

As Anderson puts it: "You're saying to me that a couple of folks are going to be able to take advantage of the improvements and not be part of the party? Hey, you're part of the downtown--this is a group effort, we're all going to do it."

King readily admits they didn't include the properties to avoid opposition to the BID.

"I'll be perfectly honest with you," King says. "We approached those folks about the concept and Don Diamond, because his property was going into escrow, didn't want to participate; and the other two, for their own reasons, decided they didn't want to participate, so we, as the Steering Committee, determined that we did not have the resources--either manpower or financial resources--to force them into the boundary. We also recognize the fact that they had enough of an ownership that it would have a huge impact if they voted against it."

While some members of the private sector have been exempted from payments, the BID's Steering Committee is seeking tax dollars to fund the fledgling improvement district. About 45 percent of the BID's annual budget--nearly $338,000--is expected to come from federal, state, county and city coffers--a fact which seems to have escaped the BID's boosters at The Arizona Daily Star's editorial page, who recently wrote that, "Voluntarily, this city improvement confederation will collect from its members--not the city budget or the taxpayers!--over $700,000 annually for the upkeep and uplift of downtown."

In reality, city taxpayers will shell out the lion's share of public sector funding--about $216,000 annually--but the BID's Steering Committee hopes to receive more than $71,000 each year from Pima County.

County supervisors, however, don't seem eager to cough up close to 10 percent of the BID's annual budget. County Administrator Chuck Huckelberry says the BID's services are "all the things the county basically does for itself. We have security guards we hire to patrol our facilities and buildings. We clean our sidewalks and streetscapes and parking lots, basically using prisoner crews from the jails. We paint over our own graffiti, so I'm trying to figure out what benefit accrues to the county."

Ultimately, however, the decision to fund the BID is up to the Board of Supervisors--with several members skeptical of the proposal.

District 3 Supervisor Sharon Bronson says she first heard about the county's contribution when she "read about it in the papers."

Like several of the City Council members, Bronson is critical of the proposed district's gerrymandered boundaries.

"If you look at how the boundaries were drawn, they excluded La Placita and Norville's property," Bronson says. "The question is why, because they're going to benefit from it. And the answer was because they didn't want to be included. So my question is, why do we?"

Supervisor Ray Carroll, who represents District 4, echoes those concerns.

"I don't think it's something I could support until the inclusion of those other groups," says Carroll. "Frankly, I'd like to hear from my constituents on the value of joining a downtown improvement district." Like Huckelberry, he points out the county provides its own security, cleaning crews, maintenance and facilities.

King regrets not contacting the supervisors earlier in the process, but she hopes they'll see a value in funding the district.

"Unfortunately, the grassroots effort that we are, we didn't get to the county before they read of the assessment in the paper," King says. "It shouldn't have happened that way, but it did. We've got a lot of work ahead of us to convince them it's a good thing for them to participate in. If at the end of day they choose not to, we'll evaluate what effect that's going to have on the budget. What we've committed to property owners is not going to change, so we would just have to revisit our budget."

Huckelberry, for one, seems a tough sell.

"If downtown revitalization is such an important element to the City of Tucson," he asks, "why don't they just fund the darn thing and be done with it?"

CITY COUNCIL MEMBERS have also criticized some areas of the BID's budget--particularly the salary of the executive director, who is slated to start at $50,000 and climb to $57,542 by the fifth year of operation. After the first year, the budget allows for an annual $25,000 bonus.

"I can maybe accept the base salary, but this bonus--I think that's a little out of line," says Anderson.

Ibarra is more blunt in his assessment: "I've never heard of anyone getting a $25,000 bonus, unless they're hitting home runs for the White Sox."

King defends the salary level, although she says the budget could be changed by the BID's directors.

"We did some research on what business improvement districts in other communities pay to attract a person who is of the caliber that can bring all of the different interest groups together and bring some order out of it in the process, and then represent all of downtown," King says. "(The bonus was approved) because of the contention over the amount of the salary. If we end up with somebody who's simply overseeing security and maintenance, it's really not worth $75,000 a year. So the board of directors, when it's structured, is going to have representation from all the different factions of the downtown community, and it will determine what the criteria is for that bonus. In fact, the board may very well revisit the budget and change the salary amount altogether."

BUT THAT BOARD of directors is the BID's biggest question mark. King says the first board--to be appointed by the current Steering Committee--will decide how the BID's future boards will function. The first board will be able to decide if representatives are appointed or elected to manage the new taxing authority, as well as the length of terms of office.

The proposed first board has 29 voting members on three different "councils"--the property-owner council, the community-organization council and the at-large council. (See sidebar for a list of nominees.) Of those 29 seats, only two have been reserved for downtown merchants.

At least six seats have been set aside for real-estate professionals and another two go to representatives of Bank One and Wells Fargo Bank. Seats have also been reserved for Mayor George Miller, Pima County Supervisor Raul Grijalva and various other suits and cigars.

This board--whose membership has yet to be finalized, and which will not require City Council approval--has tremendous potential political power. According to its charter, it "will develop a business development plan for the district, which may include economic or activity zones within or adjacent to the district."

That's the fine print that worries James Graham, who redeveloped and opened the Grill, a 24-hour restaurant on Congress Street that's one of downtown's success stories.

Graham, who was also one of the first people to begin redeveloping Tucson's warehouse district for artists (see "Warehouse Renaissance," Tucson Weekly, February 26), is worried the BID will become a vehicle for downtown land speculators to "tear down historic buildings--not necessarily buildings that have been ruled historic, but buildings that have historic value, like the old Thrifty building, like the Art Corner, like the old Tucson Citizen building. My primary concern is destruction--it will give them license to tear down buildings."

He's also worried the BID will drive up rents in the downtown area.

"It's going to raise everybody's rent, it's going to raise property values, and all the little stores will go just like that," he says. "They swear up and down that they're going to take care of Mom and Pop, but the record shows they don't do that."

Councilman Fred Ronstadt, who supports the BID, says the plan isn't perfect, but he trusts the Steering Committee.

"There's a very deep understanding that downtown Tucson has a certain flavor to it," Ronstadt says. "There's no intention whatsoever to compromise the ability for the established people to continue their business. And that's something that I specifically requested be a consideration, and they understand that, and they understand the value of the downtown area hinges on the people who are down there now. They don't want to lose anybody."

But King says the board won't be making any promises.

"The BID can't make any assurances," says King, "because the board of directors as a whole is going to determine: Do we want strictly the type of retail we have now? Do we want to shut out big-bucks retail? But more importantly, we're going to determine what's important for us to say in terms of our history and culture and existing grassroots retail downtown, which all of us want to see maintained. And on the other side of that, is there room for more traditional retail downtown? And if not, where do we place that outside so it can help support us?"

That's a lot of decision-making power to put into a private enterprise funded by tax dollars. And it's what makes Graham nervous about the BID. If indeed the board of directors--which includes property owners who've warehoused property for years downtown waiting for land values to climb--decides to push a business plan to accommodate chain restaurants and retail outlets, then the local business owners who are paying an assessment will have essentially seen their taxes increase to fuel the engine that could drive them out of business.

At least three City Council members see a real threat to those small businesses unless the BID is committed to nurturing them. They believe--at the very least--that these business owners deserve more representation on the BID's board.

"They're the ones who actually did the work," Ibarra says. "They invested in downtown when downtown was not the 'in' thing, and we should not return that investment with a slap in the face." TW

The Players

WHILE A FINAL board of directors for the BID has yet to be named, this is a list put forth by the Steering Committee. According to Sheila King, who led the effort to create the BID, some nominees have yet to agree to serve on the board.

Property-Owner Council

  • Michael Hard -- Bank One
  • Sheila King Picor -- Bank of America Plaza
  • Paul Hornung Wells -- Fargo Bank
  • George Favela -- US West
  • Shirley Pope Reliance Corporation -- Norwest Tower
  • Suzy Ong -- Broadstone Realty (Westerner Building)
  • Cele Peterson -- Old Town Artisans
  • Ray Flores -- El Charro Restaurant
  • Richard Oseran -- Hotel Congress
  • Nora Kuehl -- Dinnerware Contemporary Gallery
  • Gilbert Gonzales -- Attorney
  • Samuel Siebenberg -- Siebenberg Properties
  • David Nichols -- David Nichols Realty
  • George Miller -- Mayor, City of Tucson
  • Carol Carpenter -- Downtown specialist, City of Tucson
  • Raul Grijalva -- Pima County Board of Supervisors

Community-Organization Council

  • Jack Camper -- Metropolitan Chamber of Commerce
  • Jaime Gibbons -- Hispanic Chamber of Commerce
  • Robert Gonzales -- Greater Tucson Economic Council
  • Sarah Clements -- Tucson Arts District Partnership
  • Thomas Laursen -- Downtown Arts and Business Alliance
  • Elva Flores -- El Centro Cultural de las Americas

At-Large Council

  • Larry Lucero -- Tucson Electric Power
  • Arnold Elias -- Former postmaster general of Tucson
  • Jim Cook -- Arizona Theatre Company
  • Larry Paul -- Realty Executives
  • Stephen Jewett -- Office of the Governor, State of Arizona
  • C. Paul Thomas -- Artisoft

Ex-Officio (non-voting) Directors

  • Chris Leighton -- City of Tucson Transportation Department
  • Daniel Huerta -- Tucson Convention Center
  • Gary Molenda -- Business Development Finance Corporation
  • Michael Hammond -- City of Tucson Industrial Development Authority
  • John Huerta -- Downtown Development Corporation

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