Transcript
Tom Heath
Good morning. It’s a beautiful Sunday in the Old Pueblo. You’re listening to KTDT Tucson. Thank you for spending part of your brunch hour with us on your downtown Tucson Community sponsored rock and roll radio station.
Tom Heath
This week, we speak with Fletcher McCusker, chair of Rio Nuevo’s District Board. We are gonna talk about the impact over the last 12 months of the covid pandemic and what we can expect in the next 12 months. It’s February 7th, my name is Tom Heath and you’re listening to Life Along the Streetcar.
Tom Heath
Each and every Sunday, our focus is on social cultural and economic impacts in Tucson’s Urban core and we shed light on hidden gems everyone should know about. From A mountain to UArizona and all stops in between, you get the inside track right here on 99.1 FM streaming on DowntownRadio.org, also available on your iPhone or Android by going to your app store and downloading the Downtown Radio Tucson app.
Tom Heath
If you want to get us here on the show directly. Our email is [email protected]. We’re on Facebook at Life Along the Streetcar. Cccasionally, you’ll find us over there on Twitter. And if you want to see any of our past episodes, our website host them all Life Along the Streetcar.org. And we’re also having the podcasts on Spotify, iTunes, SoundCloud and I’m pretty sure you can just ask your smart speaker to play “Life Along the Streetcar Podcast”.
Tom Heath
We’re going to start today with a hotel taking over an old newspaper building and catering to wine afficionados. For over 25 years, 82 South Stone was the home of reporters and news men for the Tucson Citizen. Now, it hasn’t been such an over 80 years as the newspaper merged with the Arizona Daily Star in 1940 and it moved to a bigger space.
Tom Heath
Well, the Citizen is back. Citizen Hotel, that is, and it will soon be home to a 10 Room Wine Boutique Hotel. Moniqua Lane, the owner of the recently renovated downtown Clifton Hotel, plans to open this new hotel with 10 spacious rooms. And it also includes a 5000 foot space, which is going to be bringing in Sand Reckoner.
Tom Heath
The Wilcox Vineyards are going to move part of their operation to the hotel’s basement. They also plan to open a tasting room and this unit here is going to be attracting those wine crowd experts to Downtown.
Tom Heath
Now, we have reached out to Moniqua Lane and we hope to have her on an upcoming show. Our feature for today, however, is a man who knows all about hotels in downtown. In fact, he was instrumental in bringing the AC Marriott, the first hotel we had downtown in over 50 years. And his name is Fletcher McCusker.
Tom Heath
Fletcher McCusker was born in Tucson. He went to Tucson High, graduated from the University of Arizona and like a lot of wildcat alums, he took his talents away from Tucson for a while to make his fortune. But Fletcher was that proverbial prodigal son and returned to his hometown, bringing with him a billion dollar company Providence Service corporation, which he intentionally placed in downtown Tucson in 2010.
Tom Heath
Over the next decade Fletcher would be involved with the revitalization of downtown, sitting on many Boards of Fox Theater and others, instrumental in bringing back second Saturdays, and he was eventually appointed by the state legislature to chair the Rio Nuevo District board, and I’m sure if you’ve been in Tucson for a while, you know that the Rio Nuevo District early versions have been saddled with a lot of controversy and inefficiencies, but we have talked about the new iteration on a few different shows and it seems to be accomplishing what the voters really wanted when they approved the district in 1999. We spoke with lecture by phone recently to find out how the district is doing during the pandemic and what we can expect to see in the future.
Tom Heath
Alright, so we’re here with Fletcher McCusker of the Rio Nuevo Board and Fletcher, you’ve probably done more than one interview about Rio Nuevo. My guess is over the last few years, but Is there a concise statement that kind of explains what the Rio Nuevo District actually is?
Fletcher McCusker
We are a tax increment financing District, TIF, Arizona only has one of those primarily because Rio Nuevo was so controversial its first 10 years. The district was formed in 99 and run by the City of Tucson from 99 – 2009 and you’ll probably remember a very famous headline and in the Star. Rio Nuevo’s spent two hundred thirty million dollars in has nothing to show for it. So that was the first 10 year history and TIFF became a four-letter word. The state said we’ll never do another one. This is corrupt just a total waste the money. So there’s never been another one.
Fletcher McCusker
The last 10 years, we’ve regained some of that credibility but the increment financing thesis is that you spend tax dollars to invest in things that create new tax dollars and some states like Atlanta has 12 TIFs, California’s use these extensively. This was the only experiment in Arizona.
Tom Heath
So Rio Nuevo has a footprint fairly sizeable footprint and and you collect a portion of the sales tax that’s generated from basically downtown to Park Mall?
Fletcher McCusker
Exactly. Yeah. It’s a dog bone, that was gerrymandered to pick up a lot of retail sales tax because this is a state taxed TIF some of them are property tax, some of them are other kinds of taxes, but this is a sales tax TIF. So, the mandate was to renovate downtown in the far west side, but they drew a dog bone from basically A mountain all the way down Broadway to capture Park Place Mall. So all of those stores we get fifty percent of the sales tax created by any of those stores downtown and along Broadway.
Tom Heath
In the original the original District was a voter approved, right?
Fletcher McCusker
It had to be voter approved. It was it was hugely successful referendum, proposition 400 in 1999, and it promised all sorts of Fantastical things on the west side. An aquarium, an arena, an IMAX Theater, Hotel, Museum, a science museum, etc, etc. And there was a little asterisk at the bottom of this proposition that said we really don’t have to do any of this stuff. These are some samples of things that we might do and once had passed they took great liberties with that asterisk because they basically never built anything that they promised the voters.
Tom Heath
I know for a while like you said there was just a very bad feeling I think Even today even though we’re in a different iteration of Rio Nuevo, but people still hearken back to those original days and see it. But you came on board with a different group in 2010-2011?
Fletcher McCusker
The state wants that headline has the paper the state sees the district from the City of Tucson and the options that were discussed where one terminated but the city had amassed about a hundred and forty million dollars of debt that the state therefore would have had to pay off or replace the city and the city board with state appointees with the hope that over its next 10 years. It would at least make enough sales tax to pay off the debt.
Fletcher McCusker
So initially, it was a default strategy just to not have to bail out the city. When we got involved, we saw huge opportunities. To really reinvest those State dollars and we started partnering with private sector developers. Today’s version of Rio Nuevo is seed money. We will put up a small portion of an investment. We might buy the land we might at least the land we might do a loan we might do some sort of tax rebate. We have a bag full of incentives, but it’s designed to attract a private developer and Designed to attract a private lender and a result of that now ten years later. We had 21 very successful projects that really put Tucson back on the map. The legislature was so pleased with us that two years ago. They extended our life from 2025 now until 2035.
Tom Heath
I think the amazing thing when you go to the Rio Nuevo website and this is the the piece that I do think a lot of folks miss when when they don’t understand that the complexity of it is the leverage of the Rio Nuevo dollars instead of spending two hundred thirty million dollars with no results, you’re spending fractions of that and in getting 10 times the amount of investment from other sectors to create these projects.
Fletcher McCusker
Yeah. The own really level was all about the government. It was going to be government bill government-owned government operated. So a hundred percent of those dollars were spent and wasted on projects that never launched. we’ve Exactly that we’ve leveraged our money to attract other private sector dollars and the private sectors got to sustain this, you know, the government will screw this up left to our own devices. So what’s interesting about downtown now is almost everything down there as private sector developed. We’ve helped them, you know, and we’ve got a lot of stuff going on in the pipeline, but the only thing we own is the Tucson Convention Center.
Tom Heath
I remember the very the very first show we did back in 2017 for lifelong streetcar was mission Garden kind of figure if you’re going to do a story about downtown and you know, start start something you should start at Mission garden and I didn’t realize that that project which is so important to our history and our culture probably wouldn’t have happened without ran away those involvement.
Fletcher McCusker
So initially the old version of Rio Nuevo built a 4.8 million dollar wall. Over there and then walked away from that project. So it was probably on his last legs when I got involved in one of the first things we did was to agree to finish the project one because it’s historically very important but to the district had spent so much money on it. Why would you just abandoned the think so, you know, we did help them finish that and it was a little bit controversial because our mandate is to create sales tax. And all those museums and parks and Gardens that the original District board contemplated don’t pay any sales tax.
Fletcher McCusker
So we were criticized frankly, you know for one of our first actions being to support Mission Garden, but we followed that quickly with things like hotels and restaurants and you know, the Mercado Annex and of course then ultimately caterpillar, you know, so once people saw that are true Mandate was to create Economic Development they backed up as but you know, almost all the original plans weren’t going to contribute sales tax. They were museums or science centers or you know, the garden there was very little effort in the beginning to create a going concern.
Tom Heath
Well, I think Economic Development they’ve got a foundation of history and culture that we don’t want people people want to be in that area and that you know those types of decisions. Asians might lead a company like Caterpillar to want to be a part of Tucson because of that investment in history culture and arts.
Fletcher McCusker
Yeah. I didn’t know do we got deep involved with caterpillar that all that land on. The west side is Atlanta. Yeah. I’m very toxic methane-producing landfill and somehow real know Eva was going to build on that, you know, they they capped it and backfilled it but the whole thing had to be remediated and When caterpillar expressed an interest in that site that eight Acres that we remediated for them cost a million dollars an acre to get rid of the former trash. So there’s still almost 40 acres over there of landfill that would cost you 40 million bucks to make it habitable. And those are the kind of just you just wonder when ryona level had all that money. Why didn’t they remediate that Lanta? Why wasn’t one of their first project? to clean up all that toxic waste they spent a lot of money drawn plans and making movies and you know things that ultimately they intended to do but nobody ever they never took a single step to remediate that land.
Tom Heath
Well since 2012, there’s been quite a bit of a big Improvement in the production and we’ll link to the Rio Nuevo site. So people can get a look at the 21 projects that are completed and I think the transparency of the site speaks for Off with the listing of checks that have been written in who they’ve been written to and everything. So it’s a pretty clear accounting for for the funds that you’re using.
Tom Heath
We are in the middle of our interview with Fletcher mccusker. He is the chair of the Rio Nuevo district and in the second half we’re going to find out really what’s happening during the pandemic and what the future holds but first. I do want to remind you that you’re listening to Life along the streetcar on Downtown Radio 99.1 FM and available for streaming on Downtown Radio. Org.
Tom Heath
Well, let’s get back to the second half of the interview with Fletcher McCusker of the Rio Nuevo District Board of Directors. But what I’m hoping today is to kind of talk about the present and future because you know, you talk about a sales tax base District in a time in which stores are closed and people aren’t leaving their house a lot of online shopping but not as much retail brick-and-mortar shopping that’s got of had a huge impact. Done on your revenues.
Fletcher McCusker
I’ll tell you exactly so in February our sales tax revenue for the month of February last year was two million dollars. Our Revenue last month was $500,000. So our revenue is off by 75% and that’s because all the stores and restaurants and bars that beat us their revenue is off by 75% So it’s a really dark time particularly for the small locally owned and operated businesses. And of course, it’s been catastrophic to the Arts the fox’s dark the Rialto start the The ballet the arena there really isn’t a reason to go downtown right now and we’ve suffered through that open that at some point all this comes back and that’s really kind of where we are today in survival mode in the meantime mostly led by Outsiders.
Fletcher McCusker
People are making huge bets on the future of Tucson Post pandemic. We’ve seen some 400 million dollars. He’s committed to the Rio Nuevo District on projects. That would be built out say over the next year or a year and a half and it’s coming from New York and Boston and Seattle and Salt Lake City and Scottsdale, you know, so, you know people and I think there was an article someplace that said Tucson’s going to be one of the top five destination to live work and play post covid and that’s attractive. A whole new set of speculators who are spending huge amounts of money to launch downtown projects.
Tom Heath
Well, we’re saying housing go up in large scale and you know kind of the crown jewel or well, you know, one of the crown jewels of Rio Nuevo, you know may have been the getting the AC Marriott in downtown as the first hotel and I don’t know how many decades and now we’ve got 50 years.
Tom Heath
Yeah. It was 50 years between hotel and now we’ve got Hilton putting a couple of different most locations. Asians up there’s a boutique hotels that are revitalizing and coming back into place of there’s a lot of attraction to get to get people down here and part of that is driven by a Resurgence in what what what the convention center is like would it be that’s been a huge priority for being over the one project. You said you owned and investing quite a bit of money in that project.
Fletcher McCusker
So I the attendance at the convention center in 2019 was five hundred twenty thousand people. It’s ten times what it was just a few years ago. And that’s because of hockey and arena football and concerts are back and we have a decent sound system now and seats that you can actually put your body into it. You know, we’ve done a lot of work on that the advantage about it being dark is we’re investing almost 70 million dollars in the next phase of renovation. So we’re renovating the exhibition halls and the Music Hall we’re going to restore those stupid plazas that you know, we’re supposed to have water features in them and they’ve been dry for 20 years and you know, eventually this is going to be a beautiful complex and we’re seeing a lot of people speculate that that’s going to become Tucson Lincoln Center that that’s going to be the place where everybody in the region goes for music for conventions for conferences and were simultaneously upgrading the tech. So we’re going to go really high in IT with 5G Wireless.
Fletcher McCusker
You know increase the capacity and as the new fibers that you can have a virtual conference, we could do a gaming competition for example, which right now you can do. So we’re really optimistic that the TCC will become the regional go to place will hopefully over like Palm Springs Phoenix places like that because that the Aesthetics and also because of the technology
Tom Heath
Well, if someone hasn’t been around the convention center recently, it’s quite a different picture with the DoubleTree hotel is pretty much completed. There’s a brand new parking structure which looks a little Barren at the moment, but I understand I’ll have nice foliage around it and we’ll probably…
Fletcher McCusker
yeah, what we decided to do there was to let it green up. So the east side of that wall is wire lattice and we planted Vines there that in a few years. That will be entirely green gum.
Tom Heath
But I think if you do the plaza, you know, another one of those I think hidden gems, you know, Garrett X boa renowned landscape architect designed that Plaza when it when it was first put in and across the country work that Echo is done has been revered and in Tucson for budgetary reasons, we weren’t able to keep it up. So having that filled and having that water flowing through that area with the new hotel. The revitalized convention center the Flynn apartments that are that are coming up. It certainly seems like it’s going to draw a lot of attention down there.
Fletcher McCusker
Now one of the interesting projects that just came online as the folks that built the montages the five-star luxury hotels in California and Deer Valley and Mexico have acquired the one South church building the old TP headquarters, and they’re going to convert that to a five-star hotel. The large part of their reasoning in that was the proximity to the TCC so you and then of course as you said that, you know, the new apartments there the Rendezvous the Flynn, you know, I think we’re building two thousand apartment units downtown as we speak so you can’t be anything but optimistic about a year year and a half from here.
Fletcher McCusker
What we’ve got to do is help these people get there and you know We were glad to see a new round of the PPP coming the save our stages act if you and your listeners are following that will save the fox will save the Rialto, you know, many other venues downtown and you know, really well those doing a little stimulus to try and keep people around the city of Tucson’s helped out. So if we can just get it from here now, we’ve lost three iconic restaurants and I It surprised to see a few more clothes, but the interesting thing about that is it’s been a huge demand for people to take that space. So we’re seeing some really interesting people that want to open up in one of those closed down restaurants. So you’re from now this is going to be a very different conversation. This is going to be right back to where we were and I believe Tucson the next to Austin, you know, it’s going to be tector than is going to be youthful it. It’s going to be hip and it’s going to be about food and music.
Tom Heath
Well, you know, when you start looking at the plans for downtown some of the biggest projects, you know, I haven’t even I mean they’re underway, you know from a from a planning standpoint and a development standpoint, but they’re not under way as far as a construction standpoint, you know, the Batista there’s there’s stuff happening downtown think 75 Broadway is still on and a hundred and it’s now a hundred twenty million dollar project. It’s single That which one is that?
Fletcher McCusker
That’s 75 East Broadway. That’s a 20-story hundred and twenty million dollar multi-use building retail on the bottom parking office residential is the kind of thing you’d see in a Seattle or Portland. We’ve never seen that kind of project into stone. The Batista’s 75 million dollar project and the West Side the new hotel One South at 250 million dollar project, you know these Hotels are about 50 million apiece and he had two of those going up literally simultaneously. So we’ve never seen this kind of activity never seen this kind of scale and what’s really intriguing to me is most of this is by outside developers. These are people who develop for a living and it never really seemed to Saint is worthwhile investment.
Fletcher McCusker
They made these decisions in the middle of the pandemic which are a lot of local. So I thought you had a local developers working on these projects like the Bautista have been sprung by local developers, you know that due to the Schwab. He’s the stylers, you know, these are the people who live and work in Tucson and they were the First Investors in our downtown. Those are ants at Hotel Congress. You know, these Pioneers established what we now appreciate about downtown the you cannot underestimate these Value of the streetcar in terms of you know, being a along the streetcar line and that’s really helped attract serious money. Now, there isn’t anybody in Tucson. They can finance a hundred twenty million dollar project. So that takes New York money or Boston money Chicago money San Francisco money to do that and two sons never been that kind of place. They would go to Scottsdale or they go to Denver Dallas or Portland San Diego, you know with Tucson was flown over and we’re now seeing Kind of people commits yuge dollars to Tucson and and the most almost all of these projects are downtown.
Tom Heath
So you got the kind of the local field creating the impetus, but then you got the the money coming in from all over to make it an actuality…
Fletcher McCusker
and and some of these big money firms are partnering with our local developers who know the lay of the land and the value of what they’re doing and you know how to work retail into these Components so it’s you know, people shouldn’t be too depressed about the future of downtown. We’ve got to worry about this virus. We’ve got to get control of this situation. We’re nowhere near that and now the fox told me a few days ago. They expect to be dark probably until the late fall, you know, so there’s you know, I think hockey’s going to play in February but to An Empty Arena, you know, so until we can control covid you’re not going to see the pedestrian traffic that all these people are betting on but I think they’re prepared to see Tucson as the next true you know food Music Entertainment destination in the Southwest.
Tom Heath
Definitely big things to expect as we come out of the pandemic here in Tucson and I think we are poised well. My name is Tom Heath you are listening to Life Along the Streetcar. We are on Downtown Radio 99.1 FM and available for streaming on DowntownRadio.org.
Tom Heath
Well, that’s gonna do it for episode 137 of Life Along The Streetcar. Head over to our website for more episodes, LifelAongTheStreetcar.org and tune in next week as we talked to Todd Hanley of Hotel Congress about his passion from Agave plants in local Heritage. Today’s guest was Rio Nuevo the New River and we’re going to leave you with Calexico goes follow the River from the 2015 album. Tune in next Sunday for more Life along the streetcar.
