Tucson Development Thread

[BTinSF]

Originally Posted by Don B.

The freeway in Tucson I mentioned before, running east along River Road from I-10, then looping south along Pantano Wash to I-10 again on the southeast side, then heading west by the airport on the south side of town before turning north on the near west side is not a simple "crosstown freeway" as you put it, and I apologize for not being more clear about my thought process here. I envision a true, albeit small beltway, and one sorely needed in that congested burg.

You guys seem to go on and on about building beltways in the northern half of the metro area. I don't think it's going to happen--too much opposition in an area that's already built up. But there IS going to be a cross-town freeway, partial beltway of sorts: The so-called Sahuarita Corridor connecting I-19 and I-10 south of town.



The Corridor is seen here as the northernmost of the two east-west routes in the far south (the most sourthern one is Sahuarita Rd, also due for major improvements including 4-laning but it will not become a limited access route like the Corridor).

This route should be a huge help by diverting Mexican truck traffic heading east to El Paso, San Antonio and Houston away from the downtown portion of I-10.

[BTinSF]

Tucson's mediocrity muddles on:

Rainbow Bridge plan evaporates
TEYA VITU
Tucson Citizen

Key downtown players applaud the University of Arizona's decision to drop its push for the $350 million Rainbow Bridge, which would have spanned Interstate 10 and the Santa Cruz River with a science museum suspended from the structure.
The controversial bridge project had been touted as the sort of "iconic" element that could make downtown Tucson a magnet for tourists and local residents.
In a letter to the mayor and City Council received Thursday afternoon, UA President Robert N. Shelton reiterated its commitment to a science center downtown and to moving the Arizona State Museum there.
"However, I am writing to share with you that we will no longer focus on housing the Science Center in what has become known as the 'Rainbow Bridge.'
"Clearly, the consensus among community stakeholders does not exist to build the bridge as we have conceived it."
Shelton consulted with key community figures including Mayor Bob Walkup, U.S. Rep. Jim Kolbe, R-Ariz., and former UA President Peter Likins, he said in an interview with the Tucson Citizen Thursday.
"I came to the conclusion just over the weekend after giving this a lot of thought," he said. "I wanted to make sure I'd heard from everybody and that I didn't do anything too hastily."
Shelton's Rainbow Bridge letter was the first official communication that Mayor Bob Walkup received from UA's new president.
"I like the timeliness so we can get on with the issue of building a first-class science center," Walkup said.
Walkup was an early enthusiast of the bridge and suspending a science center from the bridge, but as cost estimates and engineering challenges filtered in, "my enthusiasm started to wane," the mayor said.
Councilwoman Nina Trasoff, who chairs the council's Rio Nuevo subcommittee, said: "I'm going to be looking forward to working with the university to find other creative alternatives. We want the science center as part of the Heritage Park. It was visionary but the price tag made it prohibitive."
Tucson Origins Heritage Park is the centerpiece of Rio Nuevo, the city's downtown revitalization plan.
Greg Shelko, director of the city's Rio Nuevo office, said the city is already working with the university on an alternative plan to bring the University of Arizona Science Center to the Tucson Origins Heritage Park on the west side of the Santa Cruz River.
Initial thoughts of how the park could be laid out were revealed at an open house yesterday and the science center was penciled in.
"I think it's a timely and important decision the president made to move on," Shelko said. "As he wrote, it was certainly bold and creative, but given the circumstances, it wasn't likely to occur."
Lillian Lopez-Grant, president of the West Side Coalition, a collection of neighborhood associations, heartily agrees with Shelko about bringing the science center to the Heritage Park, along with the Arizona Historical Society and Arizona State Museum. She campaigned hard against the Rainbow Bridge and was cheered to hear about its demise.
"Good," Lopez-Grant said. "It took one hell of a lot of effort (to kill the bridge). It was clearly an abomination. Nobody wanted the darn thing. I'm sure they can come up with something better."
Roger Karber, president of the Tucson Downtown Alliance's board of directors, said, "I think what needs to happen is the community rallies behind a world-class science center instead of a science center suspended from a bridge."
Karber is the developer who wants to add towers to the downtown Hotel Arizona.
At first, he said, "I really fell in love with the grandeur of the bridge. The more I thought about the magnitude of capital and risk, the less I liked it."
Donovan Durband, the alliance's executive director, said the science center needs to fit better into the fabric of the community.
"I would say the Rainbow Bridge did not (fit into the alliance's vision)," Durband said. "The science center does. We want to see a world-class science center. We still believe the University of Arizona will get a generous amount of Rio Nuevo funding to build it in a very attractive building."
Rio Nuevo, with City Council approval, invested $20 million into UA's proposed science center in 2003, and Alexis Faust, the center's executive director, is expected to ask for more Rio Nuevo money, perhaps in November.
Faust was on vacation and unavailable for comment, but she did issue a statement.
"The Rainbow Bridge design for the University of Arizona Science Center was only one model for creating a sustainable science center for Rio Nuevo. We look forward to working with the community to define an alternative plan for the Science Center that will be as sustainable and equally dynamic."
Economic impact studies prepared for the science center by ConsultEcon also explored the possibility of a $175 million science center on the east side of the freeway; and a $250 million science center and pedestrian bridge to link it to the heritage park.
ConsultEcon, however, said those options would require a substantial anchor project for success, such as the proposed Rainbow Bridge.
In 2004, the cost of a science center was pegged at $96 million, but the following year, acclaimed architect Rafael Viñoly was brought on and he was inspired by a rainbow he saw near Flagstaff.
He incorporated that idea and decided to suspend the science center from a 370-foot-tall arch. The cost estimate escalated to $350 million.

[soleri]

I'm leery of any project that promises to catapult a city from one tier to the next. While I think world-class architecture can go a long way to redressing the civic malpractice that all American cities have suffered from for decades, it can't simply be a show-stopper. Ideally, the project would integrate parts of the city stranded by thoughtless road and freeway projects. But the fabric of the existing city has to be the main focus. Downtown Tucson is sleepy and forgotten, and Vegasizing the place might seem like a solution. Except bringing in thousands of more cars means more fabric ripped out of the city for parking lots and city-killing garages.

The best solution may be, to paraphrase Pat Moynihan, benign neglect. Downtown has some jewels spread among the cowpies and crapola. The magic can be nurtured but it can't be forced. Arenas and tourist attractions, in that regard, miss the point by a wide mile. Phoenix used that strategy and downtown is still dead. Worse, it's even more charmless.

Any strategy for making downtown relevant has to address the primary problem with all American cities: cars. Without effective mass transit, city cores are fatally compromised. Even good cities like San Diego suffer from too many cars and too few rails. This results in a city with lots of potential but hamstrung by a transportation system pretty much designed for suburbs.

I'd like to see Tucson grow its downtown organically and slowly. Increase density AND discourage car travel. Give incentives to developers who understand urbanism. Gradually radiate mass transit outward to serve this core and its adjoining neighborhoods. Inventory every old building to see if it can somehow become part of a retail landscape. When possible, bring in new players who can fit comfortably inside this growing organism.

Skycrapers without urbanism is a disease pretending to be a solution. It's common in Sunbelt cities, which explains why so many western cities are fairly horrible. Tucson is bad but not THAT bad. There is still reasonable hope that Tucson can redeem itself not with bold strokes and arrogant planning but with human-scaled efforts and simple respect.

[kaneui]

Along with a plethora of New Urbanism examples from other cities, Tucson also has a wealth of historic architecture in its older neighborhoods that can provide clues for what this next round of downtown redevelopment could look like. (And I agree that a bunch of massive parking garages to accommodate a new arena or convention center expansion would significantly detract from a more urban fabric in the downtown core.)

However, I am encouraged by a few components of Rio Nuevo, such as the Mercado District of Menlo Park now under construction, which aims to incorporate higher density, "barrio"-style residential areas within walking distance of offices, retailers and cultural amenities. Car garages will be at the rear of homes, accessed through alleys, and small pocket parks with indigenous plants will be interspersed throughout the neighborhood.

The silver lining in the cloud of Tucson's boisterous NIMBYism may be that its downtown will evolve more organically, and more sustainable solutions will emerge over time to counter the hubris of developers and architects claiming to have a panacea for downtown with their latest "signature" project. Resisting such temptations, Tucson may have a chance to recreate a city center that is enjoyed by both residents and visitors alike, and one that will be a source of civic pride rather than an embarrassment.

[BTinSF]

Originally Posted by soleri

Arenas and tourist attractions, in that regard, miss the point by a wide mile. Phoenix used that strategy and downtown is still dead. Worse, it's even more charmless.

The problem with large, grand projects like arenas is that they offer large blank walls to the sidewalk. What successful downtowns require is people walking around. In order to lure them to do that, interesting things to look at, normally storefronts, need to be continuously present where you want them to walk. With things like convention centers and arenas, they simply walk from their cars to the venue and back to their cars, if they have to go outside at all.

One thing I liked about the Rainbow Bridge, aside from its overall drama, was that it took a building which will necessarily be large and probably offer us lots of parking lots and blank walls and made it both pedestrian friendly and unobtrusive to the downtown (because it would have been suspended over the freeway).

But Tucson will have more of what it has plenty of now, but those things will not accomplish the revitalization of downtown. What would is lots of housing, public transportation and street-fronting businesses. Yes, the Mercado District project offers some housing, but multiply by a factor of about 20 and we might be getting somewhere.

[kaneui]

Now that the "Rainbow Bridge" proposal is history, attention has shifted to the possibility of a new arena. TCC officials want to relocate the current arena out of the existing convention center, so it can be updated and expanded to attract enough business to stop the current negative cash flow from city coffers:
(For the city's viewpoint see: http://www.tucsonaz.gov/tcc/pdfs/arena_brochure.pdf. )



early rendering of a new downtown arena


Rainbow Bridge's exit opens door for arena plan
Our view: Tucsonans can now refocus their energies on other Rio Nuevo projects that had been overshadowed by pricey 'icon'

Arizona Daily Star - Opinion
08.27.2006

Our compliments to University of Arizona President Robert Shelton, who last week formally abandoned the Rainbow Bridge as a component of the yet-to-be built Downtown science center. Architect Rafael Viñoly's design for a dramatic arch spanning Interstate 10 and the Santa Cruz River — which would have been lit up like a rainbow — was engaging and provocative, but its $350 million price tag made it prohibitive.

It took the university a long time to get that message. Shelton, a new resident who became UA president last month, may have been just what the project needed — a fresh set of eyes. The Rainbow Bridge idea evaporated because UA raised only $100 million of the needed $350 million, and the city said it would pledge no more than $50 million. Nobody ever figured out how to raise the remaining $200 million. Shelton saw that the project lacked not only money but political support. Goodbye, Rainbow Bridge. Hello, everything else.

As long as the bridge proposal remained unresolved, it functioned as a financial tourniquet that held back the flow of numerous other projects in the Rio Nuevo district, as the city's Downtown urban renewal project is called. Rio Nuevo director Greg Shelko said the city will now turn its attention to other projects, and especially to planning an arena that would be located somewhere between the Tucson Convention Center and Interstate 10.

The idea of building an arena has been kicking around for several years. Last fall, the city hired a consultant to conduct a marketing study. The consultant said the city could support a 12,500-seat arena and expect bookings about 150 days a year. The city estimates that the community center with its existing arena presently attracts about 250,000 people a year. If a larger arena were built, it could attract about 700,000 people a year, the consultants maintained.

But arena plans remained in limbo because, if the Rainbow Bridge project were built, it would have absorbed huge amounts of Downtown land and had a major impact on everything around it. "I've had the brakes on waiting for this to get resolved," said Rich Singer, director of the TCC and the person chiefly responsible for the arena project.

The arena is not likely to cost anything approaching the $350 million Rainbow Bridge estimate, but the project is still likely to be expensive and will trigger a lively debate. Shelko wants to get the project to the City Council for a vote in the next six months but concedes that might be an optimistic estimate. Today, nobody knows what the arena would cost to build because it hasn't yet been designed.

Singer says HNTB Architects of Los Angeles expects to produce a conceptual design of the arena in about a month. That will enable the city to put a price tag on the project and compare the expense of building the facility with the amount of revenue it's likely to generate from sports events, concerts and other uses.

The UA's Rainbow Bridge, even though it became impractical to pursue, was valuable to the extent that it inspired local leaders and other residents to spend more time thinking about the kind of Tucson they want to see Downtown. We hope the talk focuses on the need to capitalize on Tucson's desert climate and landscape. The Rainbow Bridge might have been an engaging monument, but it was mistakenly pitched as "iconic." Tucson, an old city in the Sonoran Desert, is already an icon, and one not to be found anywhere else in the world. Let's move forward with that in mind.

[kaneui]

In addition to two new mixed-use towers as part of their expansion of the Hotel Arizona (the former Radisson), HSL Properties is bullish enough on downtown's future to include up to 400k sq.ft. of retail in their plans for Diamond Rock Plaza:


Developer incorporates retail center into hotel plans
By Philip S. Moore
Inside Tucson Business
Aug 25, 2006

Plans to include a high-dollar retail project named Diamond Rock Plaza are now being proposed as part of owner HSL Properties’ plans to redevelop Tucson’s largest downtown hotel. What makes the proposal, say developers, are several things that are about to come together: A surge in conventions, more shoppers from Mexico, more residents in the downtown area and a new streetcar line that was approved by voters in May as part of the Regional Transportation Plan.

HSL announced plans to include between 100,000 square feet and 400,000 square feet of retail space into their $130 million plan to redevelop and expand the Hotel Arizona, 181 W. Broadway. The retail development would be on the southeast corner of Congress Street at Granada Avenue. Located above the hotel’s underground parking garage, the retail center would become a centerpiece for HSL’s sprawling complex of hotel, office, residential and conference space. It is also adjacent to the Tucson Convention Center. Already announced plans for the hotel include construction of two towers that would give the hotel 700 rooms.

Developers say Diamond Rock Plaza would the first retail center construction downtown since La Placita Village was built more than 30 years ago. Developer Roger Karber said it’s the right time for the development. With the retail business expanding and Rio Nuevo projects ready to move forward, he said the potential is there, and just awaits a plan to make it happen. “What we have is a whole different dynamic downtown now,” Karber said. National retailers are looking for locations adjacent to convention centers and interstates. Downtowns across the country are also becoming cultural and entertainment hubs.

The entertainment options are well on their way with last year’s opening of the refurbished Fox Tucson Theatre and renovations of the Rialto Theatre. There is also the anticipated expansion and remodeling planned for the Tucson Convention Center and talk of an arena downtown. Karber said he believes larger-square-foot national stores, such as Barnes & Noble and Crate & Barrel, are prepared to make the move downtown.

Pointing to the example of Houston as another dispersed city responding to the new dynamic, Karber said “They have witnessed the growth of this kind of mix of professional offices, residential condominiums, hotel and convention and retail. It may be unusual for Tucson, but it’s getting built. It will work here.” Diamond Rock Plaza is the place where the transformation can begin, Karber said, envisioning that national retailers could be located on the western side of downtown, near Interstate 10, “while local stores will locate further up Congress.” He said local residents won’t have to wait long to see it happen, either. “I think we’ll find that this will evolve very quickly and transform the look of the whole downtown,” Karber said.

For now, work continues with bond underwriters Piper-Jaffrey on development of a financing plan. Once that’s completed, Karber said HSL Properties will be presenting it to the City Council for approval. If that vote goes well, “we expect to start the first stage, remodeling the existing hotel, immediately after the gem and mineral show.” Various stages of the project will continue over the next three years, with a completion date in late 2009 or early 2010, “Because we want to be up and going in time for the 2010 Gem and Mineral Show.”

Whatever way the plan proceeds, Downtown Tucson Alliance’s executive director, Donovan Durband, said the momentum from the Fox and Rialto re-openings, as well as the success of Broadway in Tucson, is changing how the entertainment industry looks at Congress Street. “I think we’re going to see a step up from the small storefront bar options as interest grows in space for larger venues.” Unlike Fourth Avenue, which primarily caters to the University of Arizona, Durband said Congress “should have a more general appeal.”

He said expansion of the Hotel Arizona into the Diamond Rock Plaza will depend on renovation and expansion of Tucson Convention Center “and Tucson needs an arena. Neither will be magic bullets, but we should have them downtown.” Further development will also follow projects like The Post mixed use project, from 26 to 72 East Congress St., and reconstruction of the Fourth Avenue underpass, “which fill in an empty space and unite the central part of downtown,” Durband said.

So will the 4.2-mile streetcar system, which is planned to travel a route from the University of Arizona Medical Center to the downtown area. “Streetcars have become popular, even in cities where the automobile has been dominant for years. In Tucson, it will provide incentive for developers to build along its route,” Durband said.

But it won’t just be one or two major projects that revive downtown, he said. “The downtown plan needs to be an accumulation of a lot of little plans,” Durband said. “What we do downtown has to be multi-layered and multi-pronged, so that no one proposal can make or break what happens.”

[kaneui]

An interesting note on new housing in downtown Tucson: I got a call the other day from a rep. of one of the residential builders at the new Mercado District at Menlo Park, as I had signed up on an interest list awhile back. She mentioned that the units were currently priced from the "upper $400's to the low $700's," that they had already sold 4 of their 25 residences, and those prices would probably be going up soon (even though the first units won't be available until late 2007).

Hmmm...I thought that was rather interesting. So these folks really believe there are buyers out there willing to shell out anywhere from $475k-$725k for a 1500-2500 sq. ft. townhome in a downtown that is still basically dead, even when the average price for a home in the foothills is only $450k?

Although I like the project and what they're trying to do, those prices are way over the top for Tucson, IMO, even for die-hard urbanists willing to be the pioneers in a redeveloping downtown that, even if all goes well, probably won't have much of an urban vibe for at least another 5-10 years.

Maybe after the real estate market returns to some sanity in a few years, I might consider buying in the area. However, with the current and projected downturn in the market, I'm afraid these developers are facing a rocky road ahead. (And I suppose the same could apply to high-end condos in downtown Phoenix, even though its downtown is somewhat "further along" at this stage.)

[BTinSF]

Originally Posted by kaneui

these folks really believe there are buyers out there willing to shell out anywhere from $475k-$725k for a 1500-2500 sq. ft. townhome in a downtown that is still basically dead, even when the average price for a home in the foothills is only $450k?

Although I like the project and what they're trying to do, those prices are way over the top for Tucson, IMO, even for die-hard urbanists willing to be the pioneers in a redeveloping downtown that, even if all goes well, probably won't have much of an urban vibe for at least another 5-10 years . . . .

Maybe after the real estate market returns to some sanity in a few years, I might consider buying in the area. However, with the current and projected downturn in the market, I'm afraid these developers are facing a rocky road ahead. (And I suppose the same could apply to high-end condos in downtown Phoenix, even though its downtown is somewhat "further along" at this stage.)

I come at this from apparently a very different perspective. $300/sq ft for a new downtown condo, presumeably with fairly high end finishes, doesn't seem at all expensive to me as compared to what I'm used to in the Bay Area: $1000/sq ft for nice new construction. And I am not expecting the real estate downturn to affect Tucson all that much. In spite of constantly reading about the dramatically rising local prices over the last year or two, they still don't seem all that high from a California perspective and as long as you have as many Californians like me moving in, which you will continue to have, I don't think they'll drop much.

There are reasons that part-year residents especially may prefer a condo to a house in the foothills. With the condo, they essentially lock the door and drive away in the spring with nothing much to worry about. That's what I do with my SF condo but when I'm here I'm constantly wondering about whether the hailstorm damaged my roof or the irrigation system sprang a leak in Green Valley. Where my family lives in the Daytona FL area, this phenomenon has caused condo prices to be shockingly higher than detached home prices on a per sq. ft basis. The snowbirds simply don't want to have to worry about exterior maintenance and security issues.

I don't know what the future of projects like the Mercado is, but hopefully the developers have a better grip on the market than we do and I wouldn't call them crazy without a thorough market analysis because there are reasons they may be right.

[soleri]

I should probably post this graph in City Discussions, but it seems apropos of what obsesses us here in Arizona. There's a lot of shakiness in the housing industry at the moment and an overall sense that a shake-out might be coming. This graph suggests real-estate essentially took over from tech stocks as the bubble of choice. Has there been some fundamental shift if housing costs that warrants such a steep climb? Condos in a sleepy downtown Tucson might not seem like any kind of bargain if the coming correction unfolds as predicted.

[BTinSF]

If you look more closely at that graph, it started to take off in 1997 so it doesn't seem to be so much a function of money switching out of tech stocks. What it probably is a function of is exessively "easy" money from the Fed. Prior to 2000, they pumped up the money supply to ward off some unknown horror at the turn of the millenium (remember how all the world's computers were supposed to do something awful) and then they redoubled that effort after 9/11. That flood of money is what actually caused the tech stock bubble and the housing price bubble. But the thing is, they haven't stopped yet. The decision this month to stop raising interest rates because inflation MAY go away means the easy money policy continues. Remember that the Dow Jones Average remains near its all-time high. Houses are more like Dow stocks than like tech stocks.

Barring a drastic change in Fed policy, I'm not too concerned about house prices. They will correct severely in places like Las Vegas and Miami where speculation was rampant but I did not see that either in San Francisco or Tucson. I don't know about Phoenix (I think people make a mistake assuming the Tucson and Phoenix markets are one). My own index in SF has to do with rentals in my condo. When the place was new (24 years ago), it was among the first group of new big downtown condos built in SF in a long time and many people did buy units for investment. Those units were rented and they approached 45% of all units in the building. This spring, I asked the building manager what percentage were rented now and she told me under 30%, an all-time low. I have heard nothing to suggest that even the newer buildings in town, which are being snapped up, are being bought as investments. We actually did have a big drop in prices in 2000/2001 because the dot-com bust hit especially hard here, but I view that like having cowpox which makes you immune from some sort of smallpox now.

In my Tucson neighborhood, I did notice a bit of speculation. A few of my retired neighbors perceived themselves land barrons and one or two bought properties in the neighborhood and tried to flip them. But it was very few and the prices they tried to get were, IMHO, ridiculous and they didn't get them (example--One old fool bought a house like the one I paid $89K for in 2001 and, after minor repairs, tried to sell it last year for $189K). In 2001 I thought Tucson prices were undervalued. Now, I'd call them a little inflated but nothing drastic. I think the main threat is overbuilding, not speculation, but the cost of new construction is rising enough that the value of new houses can't really drop to the point of threatening the value of older homes like mine.

[Don B.]

Soleri, that graph is fascinating. Thanks!

BT, Phoenix is probably in the same boat as Tucson. What I find interesting is that Tucson's housing prices are similar, especially when you correlate them to income, as Tucson's real estate prices are about 10% less than Phoenix's prices and Phoenix's per capita (or median, or household - pick your poison) incomes are about 10% higher than Tucson's.

PER CAPITA INCOME (2000):
Tucson $16,322
Mesa $19,601
Phoenix $19,833

MEDIAN HOUSING PRICE (2Q 2006):
Phoenix $272,200
Tucson $247,300

--don

[BTinSF]

Here's the latest from Schiller himself (the guy who created that graph above):

Full House
By KARL E. CASE and ROBERT J. SHILLER

August 30, 2006; Page A10

Looking back at past housing booms, the first sign of the end is when a goodly share of buyers stop making offers and eventually stop looking, seeming to just disappear. In the spring of 1987, during another U.S. housing-market boom that was starting to lose speed, Nora Moran, president of the Greater Boston real estate board, said "someone blew a whistle that only dogs and buyers heard."

Across America today, it is as if the whistle has again been blown. New home sales in July are 22% below July 2005. The decrease is 43% for the Northeast over that same period, and the inventory of unsold new homes is up 22%. Existing home sales are down to 6.33 million in July from over seven million at the end of 2005. Older boomers are cashing out of valuable suburban homes and heading for condos in the city, or out of high-priced regions altogether.

Why is this happening so suddenly? It can't be interest rates alone. The 30-year mortgage rate is up less than one percentage point since this time last year, and is no higher than it was a few years ago when this boom was roaring along.

The market spoiler was in place some two years ago. At that time, we felt that the spectacular price increases could not be justified. The psychology of that time could not continue indefinitely, and indeed it has not.

In the summer of 2004, the annual rate of increase for home prices in major U.S. cities reached its peak. According to the Standard & Poor's/Case-Shiller Composite Home Price Index, based on 10 major metro areas, housing inflation reached 20.4% in the 12 months ending in July 2004. Now, the latest numbers announced yesterday show only an 8.2% increase in the 12 months ending June 2006, and most of that increase was in 2005. Six of the 10 cities actually fell between May and June. By simple extrapolation, if housing price changes continue to decline as they have, inflation will turn into deflation, and 12-month price changes might be squarely in negative territory by some time in 2007.

Talk is part of what changes the mood and actions of buyers, and the air is now full of talk of a bust. The covers of the New Yorker, the Economist, The Wall Street Journal and virtually every news magazine and newspaper in America has heralded the bursting of the "housing bubble."

Part of what has focused the spotlight on the housing market has been the sheer size of the boom. Ten years ago, U.S. household holdings of real estate were valued at just under $8 trillion, about 40% as large as household financial wealth. At the end of 2005, real-estate holdings were $21.6 trillion, 56% as large as financial wealth. Just in the last five years, the total market value of residential real estate alone has increased by nearly $10 trillion.

New construction, initiated in response to high home prices, has reached unprecedented levels, and new houses are still hitting the market just as demand is dropping. Between 2000 and 2005, housing starts were over two million per year, existing home sales were over six million per year, and home-improvement spending hit $162 billion in 2005. All of this generated income for millions of brokers, builders, bankers, appliance dealers and construction workers, and kept the economy growing at a strong clip. But the housing construction boom can't go on forever.

This incredible boom has been fueled in part by favorable demographics, low interest rates, a very liquid mortgage market with low down payments and borrower-friendly underwriting (option arms, interest-only, stated-income, etc.), a baby boomer generation with a special taste for housing, a substantial volume of foreign demand, and the poor overall performance of the stock market.

But beyond all these factors there is the simple psychology of expectations that is part of any speculative boom. These expectations can turn suddenly when alert home buyers get the sense that something might be amiss. Among respondents to our questionnaire survey of home buyers in April and May of this year, the median expected 12-month home price increase in Los Angeles was only 5%, compared to 10% in early 2005. In Boston, the median expectation was down to 2% from 5% last year.

Long-term expectations for home price appreciation have fallen much less. Americans haven't changed their basic views on housing as a great long-term investment. Not yet, at least. That won't happen unless there is a protracted housing price decline.

While our surveys indicate that relatively few expect prices to actually fall, buyers do not want to pay prices that are significantly higher than a year ago. Buyers are waiting and low-balling. Sellers want to get a price increase of the kind they've observed in the recent past. The result is that fewer agreements are reached, and sales fall. If the housing market were like the bond market and all houses for sale were auctioned every day, prices would indeed fall precipitously. But they are not. The aggregate indexes based on repeat sales have decelerated markedly but are not yet falling.

The U.S. now has a futures market based on home prices. The market that opened in May at the Chicago Mercantile Exchange is now showing backwardation in all 10 metropolitan areas trading. The backwardation can be expressed as implying a rate of decline of 5% a year for the S&P/Case-Shiller Composite Index by May 2007. Since the margin requirement is only about 2.5%, an investor who is sure that prices cannot actually fall by next May has, on that assumption, a sure return of at least 200% from buying a futures contract, and even more if prices rise at all. But there can't really be so much "money on the table." It must be that people really no longer see it as a sure thing that prices won't start falling across the metro areas.

As always, the future is uncertain. Many of the underpinnings of the boom are still strong, and the soft-landing scenario so widely promoted by economists and industry leaders is a possibility if the U.S. can avoid a generalized inflation, if long rates don't rise a lot, and if the rest of the economy stays strong. But that possibility is not enough to give great comfort to all those who worry today about the housing market.

Unfortunately, there is significant risk of a very bad period, with slow sales, slim commissions, falling prices, rising default and foreclosures, serious trouble in financial markets, and a possible recession sooner than most of us expected. Deterioration in that intangible housing market psychology is the most uncertain factor in the outlook today. Listen hard and watch out.

Mr. Case is professor of economics at Wellesley. Mr. Shiller is professor of economics at Yale and chief economist at MacroMarkets LLC.

URL for this article:
http://online.wsj.com/article/SB115688653772648766.html

A lot of "ifs" in there. Doesn't sound like he thinks it's as simple as the curve reverting to base levels. I do think we'll see some price declines but I just don't think they will be as bad in Tucson as in places like Las Vegas. And having recently been through a market where prices declined as much as 20-30%, it came and went and as long as you weren't planning to sell, it didn't matter much.

[kaneui]

City, Town West sign project pact
Downtown condo-brewery deal excludes Nimbus owner, originator

By Rob O'Dell
ARIZONA DAILY STAR
09.06.2006

The city and Town West Design Development have signed a development agreement for a $40 million condominium and brewery project. The agreement will go before the City Council today. However, the agreement completely excludes any mention of Nimbus Brewery, owned by Jim Counts, who originally had an exclusive negotiating agreement with the city for the 1.9-acre property on the north edge of Downtown. Counts, who was once a partner with Town West, said he was "back doored," and would sue and "have our day in court" if he is left out of it.

The agreement also leaves tough questions over environmental remediation for the site, affordable housing and parking for a later day. The city and Town West will have 90 days after the agreement is signed to work out the details on all three questions. If they can't, either party can terminate the agreement. "There are still key deal components that still need to be worked out," said Town West lawyer Bob Gugino, who added he favored such an approach. "We always knew this would be a multistage transaction because of the complexity of it."

He said it is possible Counts could be part of the deal, but said "there is no agreement" with Counts, "nor is there a discussion ongoing." A draft version of the agreement did mention Nimbus Brewery, which kicked off the interest in developing the property in July 2005 by proposing to move the brewery Downtown from its location west of Davis-Monthan Air Force base.

The city granted him a 90-day exclusive negotiating agreement in October 2005, which Counts failed to meet. Counts brought in Town West as a partner in April to save the proposal. But Town West told a council panel in August it considered a tentative joint development agreement that included $2.65 million in subsidies for Counts to be void.

Counts said he was surprised the new agreement doesn't mention him, making only vague "third-party agreements" for uses of more than 10,000 square-feet. He said he will meet with Town West officials later this week. He said Nimbus and Town West had a written agreement along with verbal agreements, including one in public when he said Town West promised to include Nimbus in the project. He said he considers Town West in breach of its contract. "I've been robbed, basically," Counts said. "I'm not going to sit back and let it happen."

The agreement between Town West and the city has the developer repay a portion of the $700,000 in gas tax money that the city used to buy the site at North Stone Avenue and West Franklin Street. City Manager Mike Hein said the amount will depend on how much of the land is used by Town West, and how much of the land will be used for public space, including an art walk, and potentially an amphitheater. Town West is proposing about 140 condos and up to 45,000 square feet of retail space plus the brewery.

Many local artisans, including Natasha Winnik, oppose the plan because they say it is inconsistent with the Warehouse Arts District master plan, and that Town West was improperly given exclusive rights to the property. Hein said more than 50 percent of the property will be private space, for which Town West will pay. Under the terms in the deal, the city would vacate Ninth Avenue, pay to move utilities and pay for public use of a parking garage.

Much of the discussions have centered around environmental remediation, city officials said. The city was willing to commit between $500,000 to $1 million for remediation, but will wait until the environmental assessment is finalized in October to finalize those terms.

[kaneui]

An update on a few downtown historic preservation projects:


Rialto Facelift Set to Begin
Downtown Tucsonan
September, 2006


Rialto Theatre, circa 1925




Rialto Theatre - original stage




new marquee - 2005


(for more info.: http://www.rialtotheatre.com/)


First, the theater interior was renovated. Then, the neon marquee was installed. This summer, air-conditioned cool air filled the theater. The next move in the redevelopment of the 300 block of East Congress, aka the Rialto Block, is finally beginning in September with renovation of the historic Rialto Building’s entire façade. The project is expected to take about five months to complete.

“After nearly four years of excruciating delay, I’m thrilled we can finally do what I promised to do back in 2002,” said Doug Biggers. He and his partner, architect Tom Powers, are the force behind Rialto Redux, LLC, a small development company with a passionate commitment to historic preservation and the revitalization of Downtown. Rialto Redux owns the entire block except for the Rialto Theatre, which is owned by the Rio Nuevo District.

The renovation of the building’s façade will follow the Secretary of the Interior’s Standards, which means it complies with best practices for the restoration and renovation of historic buildings. The façade renovation is the first phase in a complete rehabilitation of the Rialto Building, which was one of Tucson’s first mixed-use projects when it was built in 1920. The second floor will have 14 unique market-rate apartments for rent, and will also house the Rialto Theatre’s administrative offices. The ground floor will be anchored by a restaurant/bar, which will feature a private courtyard in the back of the building. Biggers said they are very close to announcing a deal with a restaurateur. Other ground-floor uses under discussion are an indie record store, a small market and office lofts on the Fifth Avenue frontage. The Rialto Theatre will expand its box office and concession area into two storefronts on the east end of the building.

“We wanted to start with the façade first, since it has the greatest impact visually. The rest of the project is being sequenced during and after the façade work, with completion of the entire rehabilitation scheduled for August 2007,” said Biggers. Planning and design work is still ongoing for the south side of the block. “In the end, we want to make the south side of the building as architecturally memorable as the Congress and Fifth Avenue façades,” Biggers said. “The renovated façade will dramatically improve the entire block, but I’m especially pleased about its positive impact on the theatre and its operations,” said Biggers. “It’s amazing that so many of the theatre’s patrons have been willing to tolerate the block in its current abysmal condition. I believe that investment in the façade can help us to continue to build audience for the theatre’s programming.”

As executive director of the nonprofit foundation that leases the Rialto Theatre from the City, Biggers oversaw a $600,000 renovation of the theatre in 2005, including the installation of a new marquee in June 2005. Re-opened in April 2005 after being closed for almost a year, the Rialto Theatre has hosted more than 130 concert events, with nearly 80,000 patrons passing through its doors. The redevelopment of the Rialto Block was made possible by a partnership between the City, an independent nonprofit foundation, and the private sector, all of which are working together to leverage public and private dollars to catalyze the revitalization of East Congress Street.

Biggers is concerned that public investment be made as strategically as possible on the east end of Downtown. “It’s important that we get the details right on the final design for the Fourth Avenue underpass and move swiftly to a construction start date within a year.” “I can’t emphasize how important it is to make other key decisions so the modern streetcar project is not delayed,” Biggers said. “Having been to Portland and seen the evidence of what happened in the Pearl District, the community needs to understand that the streetcar will have a profound economic development impact on the entire corridor. It’s a key component to making the larger Downtown area finally hit critical mass.”

DETAILS OF THE RIALTO FAÇADE PROJECT

* Significant repair of masonry elements and complete plaster repair and repainting of the entire building.
* Replication of the prismatic, leaded-glass transoms above the storefronts along Congress and Fifth Avenue, at a cost of nearly $75,000.
* Virtually the entire ground-floor façade is being demolished to remove modern aluminum window frames and doors installed in the mid-1980s. In their place will be marble bases for the storefront windows, wood doors, and replication of the original window frames. What little original material that remains will be restored.
* The dilapidated wood windows are being replaced with high quality, historically accurate replicas.
* Rehab of all second floor balcony elements.
* The façade project will cost approximately $400,000, with $150,000 coming from a Back to Basics grant from Mayor Walkup and the Ward 6 office.




THE FUTURE MEETS THE PAST
Downtown Tucsonan
September, 2006


90-year old Marist College building



It’s a bit of an ironic puzzle that while millions of dollars in Rio Nuevo monies will be spent on Tucson Origins to re-create historical buildings that no longer exist, some still-standing historical buildings continue to deteriorate due to neglect or lack of funding. One of these still-standing-but-not-for-long historic structures is the 90-year-old Marist College building at West Ochoa Street and South Church Avenue. Local architects say the three-story adobe building, used as a Catholic school from 1915-1968, is unique --- the last of its kind --- the only three-story adobe building still standing in Southern Arizona.

The need to address this situation, and the irony that the Mission San Agustin complex and El Presidio de Tucson are being rebuilt through Rio Nuevo’s Tucson Origins, are not lost on Downtown business owner Jeff DiGregorio. “I hope that we’re not setting ourselves up for another Tucson Origins project in the future, where we have to spend a lot of money to re-create something that we could have saved today,” says DiGregorio, who, along with partner Chuck Bressi, owns and operates the Royal Elizabeth Bed and Breakfast Inn on South Scott Avenue, just a block away from the Marist Building. “Building Tucson Origins is absolutely the right thing to do, but let’s not forget about what is crumbling before our eyes.”

The structure suffered a major blow last year when parts of the northwest corner of the building fell off during the monsoon season. Additional rain this monsoon season has brought more deterioration to the building, vacant since 2002. The Roman Catholic Diocese of Tucson estimates a $2-to-$3 million cost to refurbish the place and the Friends of St. Augustine Historic Preservation Project have begun a fund-raiser. Ward One City Council Member Jose Ibarra has contributed $24,000 for a more exact cost study by the City Urban Planning Department. Ibarra has indicated the building would be designed for some kind of public use, should it be refurbished. The diocese has indicated interest in using the building as a museum to celebrate the history of Catholicism and other religions in Tucson. Repeated attempts to reach Council Member Ibarra to determine the status of the cost study proved unsuccessful.

[kaneui]

A Portland, OR developer with a decent track record has apparently taken over the troubled redevelopment of the downtown MLK housing project:


MLK project may not be demolished
By Rob O'Dell
ARIZONA DAILY STAR
09.08.2006

Oregon developers pitched a radical redesign of the Downtown Martin Luther King housing project Thursday that saves the building from the wrecking ball and adds new retail space and market-rate housing to the project. Gone is the plan to demolish the building and construct a new $15 million, four-story, 66-unit affordable housing complex in its place. Instead, developers Williams and Dame out of Portland want to gut the building and remodel it for as many as 85 market-rate condominiums and 11 low-income units.

Also new is the developer itself, Williams and Dame, which bought the rights to develop the project from local developers Doug Biggers and Tom Powers. Matt Brown, the project manager for Williams and Dame, wouldn't say how much the company paid for those rights to develop the city-owned land. A City Council panel approved the project unanimously Thursday, clearing the way for a development agreement to be signed between the city and the Portland developer, with the whole council potentially getting the chance to approve the deal by the end of the month.

In addition to refurbishing the 37-year-old MLK building, between 5,000 square feet and 9,000 square feet of retail space would be constructed along Congress Street, on the portion of the site between the street and the former housing project, which is set back from Congress. Plans also call for the city to help pay for a two-story underground parking garage that could accommodate more than 300 parking spaces. Two new buildings to the north of MLK site would be built as well, a 68-unit assisted-living center that would be constructed and run by the city, and a five- or six-story building built by Williams and Dame that would house a minimum of 3,000 square feet of retail, and a minimum of 45 market-rate apartments or condominiums and 11 affordable-housing units. Brown said the refurbishment of the MLK building could cost between $6 million and $9 million and the entire value of the project could be $20 million to $25 million.

He said Williams and Dame have done many projects in downtown Portland and recently did a project in downtown Los Angeles. Brown said that if everything goes well, the refurbished MLK building could be ready for tenants in a year. That fact could be big, given the noticeable lack of progress in the city's Downtown Rio Nuevo redevelopment plan that was approved in 1999, said Councilwoman Nina Trasoff, who said she liked the plan. "It's so important that people see something," she said.

The MLK project caused a firestorm in June because the city's Community Services Department, led by director Emily Nottingham, scrapped longstanding plans for the site without any public discussion. Nottingham's design would have doubled the building's footprint, taking up to two-thirds of the land and leaving little space for the market-rate housing and commercial development to be built by a private developer.

This caused outrage from the Downtown development community, as did the revelation that the project had acquired nearly $1 million in Rio Nuevo funds for a public plaza, but quietly scrapped the plaza and kept the money. Rio Nuevo Director Greg Shelko said that money — along with more redevelopment money — would likely go toward parking or streetscape improvements.

[kaneui]

Now that the Rainbow Bridge idea is history, Rio Nuevo's Greg Shelko says the UofA Science Center should be built on the west side of the soon-to-be-widened I-10, joining new buildings for the AZ Historical Society and the AZ State Museum, all linked to the east portion of Rio Nuevo with wider freeway underpasses to accommodate the new trolley and additional pedestrian traffic:


After the Rainbow
Proposals to link Rio Nuevo projects move under Interstate 10

by Dave Devine
Tucson Weekly
September 14, 2006


The spectral light of the University of Arizona's Rainbow Bridge may have faded, but city officials still believe downtown's Rio Nuevo project can be viably connected across the thundering traffic of Interstate 10. But instead of soaring over the roadway, that will mean going underneath it.

"The connection options haven't changed, because they weren't about the Rainbow Bridge," says Greg Shelko, Rio Nuevo's director. "The city has partially funded $9 million in improvements for the Clark Street underpass which leads to a bridge across the Santa Cruz River." The Clark Street route will allow vehicles, pedestrians, bicyclists and even a modern street car to move freely under the highway, Shelko says. Current plans call for expanding the sidewalks on Clark Street, which runs beneath I-10 a few blocks south of Congress Street, to a whopping 70-feet in width. Further south, on 18th Street, a pedestrian-only passageway 120 feet wide will be implemented.

Both these enhancements are part of the long-anticipated I-10 widening project between Prince Road and 29th Street. Two $200 million-plus bids for this construction work were recently opened, the lowest being 13 percent higher than the $177 million budgeted. The Arizona Department of Transportation Board is scheduled to review its options at a meeting on Sept. 15.

When first proposed in 1999, a shuttle system was one method suggested to link the Rio Nuevo improvements on the east side of I-10 to those west of the Santa Cruz River. Also considered, according to the Arizona Daily Star, were "bridges and roads or rail tracks to cross the Santa Cruz River at Clark Street." Two years later, city officials were discussing specific improvements to Clark Street, including the installation of a trolley line. They also talked about other "penetrations" beneath I-10 which would accommodate pedestrians and vehicles moving between the two major focus areas of Rio Nuevo (See "Road Block," Aug. 16, 2001).

Seven years ago, the primary proposed projects on the east side of the highway were an aquarium, a visitors' center and an IMAX theater. West of I-10 were clustered several cultural attractions, including the re-creation of the historic Convento site as part of the San Augustin mission complex. Today, Shelko says, a new entertainment arena, along with hotel, housing and commercial developments, are slated for the east side, while to the west will be the Convento, along with new facilities for the Arizona Historical Society and Arizona State Museum.

Over time, the university's science center proposal evolved to span the two sides of Rio Nuevo, and the rainbow bridge was the suggested way of connecting them. For some people, the bridge became a controversial symbol of downtown, but its dramatic architecture was an attempt to attract a large audience to the entire area. Now that the bridge idea is dead, Shelko says it makes sense to put the science center exclusively on the west side of the interstate: "With the change (dropping the Rainbow Bridge) and to maximize the use of real estate, it appears the center will be a part of the cultural campus on the west side."

What university officials think about this proposal couldn't be determined. They didn't return several phone calls seeking comment. But the idea of consolidating all of the museums on the west side of Rio Nuevo pleases Mac Hudson, special projects coordinator for the nearby Menlo Park Neighborhood Association. "That way, they can share functions, (like parking)." As for connecting the two sides of Rio Nuevo, Hudson thinks the street car which will link the UA campus with downtown is imperative. "To me, it can be an amazing icon," he says. Planning for the light-rail line, funded by the Regional Transportation Authority sales-tax increase approved by voters in May, is now underway. Service to the Rio Nuevo area is expected by 2012.

Not all of Hudson's neighbors agree with him. One, who requested anonymity, criticizes the planned reconstruction of I-10 for the visual and noise impacts it will have on both the neighborhood and Rio Nuevo. "People will see 18-wheelers from the Convento site," this person says, pointing out the construction work will substantially increase the height of the highway and add lanes. "The freeway needs to be integrated (into its surroundings)."

To accomplish that goal, he proposes putting the highway at grade between St. Mary's Road and 29th Street. To connect Rio Nuevo across the roadway, he suggests having Congress, Clark and 22nd streets go over I-10. For his part, local activist Dick Basye thinks the highway should be underneath the existing streets in the area. He points to an earlier study which found the idea of depressing I-10 to be cost-effective, disputing the findings of a more recent report which shows this work would be extremely expensive. Calling Basye's proposal cost-prohibitive, Shelko responds: "We'll have more pleasing ways to connect Rio Nuevo."

[kaneui]

Responding to neighborhood concerns, Town West has somewhat reconfigured El Mirador, their proposed condo project on downtown's northern edge:



The condo project proposed for Franklin Street downtown is expected to have 140 units, plus stores and offices.


Condo plan for downtown evolves; brewery still iffy
By Teya Vitu
Tucson Citizen
09.22.2006

The condo proposal for the downtown warehouse district keeps taking on new looks. The latest notion for the long-awaited condominium, and maybe brewery, project calls for the property to open onto Franklin Street. Earlier designs, originally anchored by the Nimbus Brewing Co., had a courtyard with an amphitheater enclosed by three condo towers and an opposite strip of office-retail space.

The newest design still has El Mirador's three condo towers along the northern edge, but Town West Design Development now proposes putting the amphitheater in front of the towers, along Franklin Street. "This tries to answer some of the concerns by making the public space and amphitheater more public," said Raul Reyes, Town West's vice president and principal architect.

Reyes plans to present this newest design next month to the El Presidio and Dunbar/Spring neighborhood associations and the Warehouse Arts Management Organization. The artists have repeatedly pressured Town West to incorporate more features oriented toward artists. Reyes is proposing to build lofts for artists and an art gallery behind the former Steinfeld's Warehouse - across Ninth Avenue from the rest of El Mirador. "This is an ongoing process," Reyes said this week at a Tucson Downtown Alliance meeting.

Nimbus, which originally launched the project at Franklin and Stone Avenue, is not involved, although Town West and Nimbus officials have said the door is still open for the brewery if Nimbus owner Jim Counts can assemble a viable plan. El Mirador would have 140 condos in six-, 10- and 12-story towers.

[kaneui]

The AZ Board of Regents have OK'd the planning of a new $62M Arizona State Museum to be located downtown, west of I-10:


The existing Arizona State Museum on the UofA campus



UA receives green light to plan $62.1M museum in Rio Nuevo
By Eric Swedlund
ARIZONA DAILY STAR
09.28.2006

FLAGSTAFF — The UA will begin planning for a new $62.1 million Arizona State Museum facility in Rio Nuevo with approval Wednesday from the Board of Regents. Placing the Arizona State Museum expansion on the university's capital improvement plan is the first step in moving forward with the facility, expected to be one of the main Rio Nuevo attractions west of the Santa Cruz River.

Also added to the University of Arizona's 2007 capital-improvement plan was a building-renewal request of $37.4 million.

The Arizona State Museum was founded in 1893 and is operated by the UA. The current on-campus facility restricts the size and quality of the museum's outreach programs, said Joel D. Valdez, UA's senior vice president for business affairs. "We want to get started with more active planning on this particular building," Valdez said.

The new museum expansion doesn't have a fixed cost or precise location but is expected to house much of the public outreach and storage, opening more space on campus for education and research. The anthropology museum will provide a perspective to connect the history and the science attractions already proposed for Rio Nuevo's west end.

[kaneui]

The latest plans for Rio Nuevo's cultural campus west of I-10 will include Tucson's version of Central Park--Tucson Origins Heritage Park--complete with natural vegetation:





City unveiling layout of Rio Nuevo projects
By Rob O'Dell
Arizona Daily Star
10.08.2006

It's the Rio Nuevo plan that many have awaited for nearly seven years. The city has just completed a site plan for the west side of Rio Nuevo — a nearly $500 million "cultural campus" that will feature the UA Science Center, new centers for the Arizona Historical Society and the Arizona State Museum, and a re-creation of the convento, chapel and other features of the San Agustín Mission.

The plan jelled quickly in the last 30 days after the University of Arizona dropped the concept of building its Science Center as a $250 million "Rainbow Bridge" spanning Interstate 10, Rio Nuevo officials said. While it may not have the visual impact of the abandoned bridge concept, the complex will draw attention to itself, said Greg Shelko, the city's Rio Nuevo director. "Driving by on Interstate 10, I think you'll probably get a vista of a collection of three really significant buildings with some innovative architecture," he said.

A naturally vegetated park, plaza and festival site will be a community gathering spot, "our version of a Central Park," Shelko said. Under the new plan, the science and history buildings will be clustered around a plaza in the center of Rio Nuevo's west side, south of Congress Street. The UA Science Center will be to the east along the Santa Cruz River, while the Arizona State Museum will be west of the plaza and the Arizona Historical Society to the south.

On the southwest corner, the "Origins Center" — a tribute to Tucson's birthplace — will provide entry to the historical heart of the complex: an archaeological site with pit houses from an ancestral village, and reconstructions of features of the San Agustín Mission, which once stood on the spot. The mission's chapel and convento, built by Spaniards in 1772, were the first buildings in modern Tucson. The two-story adobe convento was used by visiting priests and as a school for the Indians who had inhabited the region for centuries. "That is the foundation of Rio Nuevo," said Councilwoman Nina Trasoff, who chairs the city panel on the Downtown revitalization project that voters approved in 1999. "It builds on our history and culture." A walk south will take visitors to the reconstructed Carrillo House and Mission Gardens.

Estimates show the four attractions could bring more than 750,000 visitors to Tucson annually, Shelko said. While the site plan is complete, the final plan — which will include visitor and revenue projections for the museums, Tucson Origins Heritage Park and the Science Center, along with their projected development costs — is expected to be brought to various Rio Nuevo committees and the City Council in November.

The project could also include the Tucson Children's Museum, said city planning director Albert Elias, who said the museum has "raised the issue" with the city about moving to the cultural campus on the West Side. City Manager Mike Hein said there could also be a new library on the site.

Neighbors have requested a library and the Arizona Historical Society has approached county officials about combining library services with its historical archives, Shelko said. In all, including the four cultural projects, the potential Tucson Children's Museum and new library, along with streets, utilities and parking, the city's commitment of Rio Nuevo money will be in the neighborhood of $200 million, Hein said. The entire project will be more than double that, said Shelko. "It could be close to $500 million," he said.

After the plan is approved for the cultural campus, the city will go out to bid for the remaining 15 or 16 acres north of it and east of the Mercado at Menlo Park, a housing and commercial project now under development. Shelko said this West Side site of Tucson's birthplace has been considered a cornerstone of Rio Nuevo going back to the 1999 ballot proposition that passed the Downtown redevelopment project. Many of its features were included in the 1999 proposition, along with an aquarium and Imax theater which were later dropped from the plan. A potential new arena for Downtown was never on the ballot.

The West Side cultural campus will stimulate other businesses, said Donovan Durband, executive director of the Tucson Downtown Alliance. He said visitors will eat in Downtown restaurants and stay in nearby hotels. For resident Margaret Hardy, the West Side plan holds real promise. "That represents the heart and soul of what Rio Nuevo is about," Hardy said.