Tucson Development Thread

[aznate27]

Tucson just can't pull it together. We have the most useless city council in the history of this city! Now Stiteler and Martin will profit for doing NOTHING!!!! It was a scam from the begining.

[Leo the Dog]

Originally Posted by Vicelord John

oh yeah but by like by 3 blocks!

Well, St. Paul is east of the Miss. River. And they are the Minnesota Twins aka "Twin Cities".

[kaneui]

The Screening Room theater on Congress, one of the four facade restoration projects provided matching grant funds by the city, will have a new marquee by October:



Rendering of the Screening Room's new marquee, designed by Ibarra Rosano
Design Architects, who worked with the same sign-makers who did the
Rialto's marquee. The Rialto will host a fundraiser, Bad Fest, on Friday.
(render: Ibarra Rosano Design Architects)



A bright new face for Downtown theater
Opinion by M. Scot Skinner
SKINNER@AZSTARNET.COM
06.18.2009

The Screening Room, a 105-seat theater on East Congress Street, has made a name for itself by hosting the largest film festival in Arizona. By the end of October, it will finally have a face: a big, bright new marquee that will brighten up the middle of Downtown like a smile. "People drive by, but it doesn't look like a movie theater," says Giulio Scalinger. "That has been a hard thing for us." The Screening Room's marquee will assume a proud place in between the shimmering marquees at the Rialto Theatre and the Fox Tucson Theatre.

Until then, however, Scalinger will continue to be the public face of the Screening Room. He's also the program director. "Downtown has taken a downturn, and we don't do as much original programming as we used to do," says Scalinger, who hates that he is surrounded by depressing evidence of that downturn. The Screening Room is sandwiched between two sad, empty storefronts and has been for several years. Those buildings were once beacons for art lovers and theatergoers; Dinnerware gallery was on one side, a.k.a. Theatre on the other. Can you blame Scalinger for getting excited about a sign?

The nonprofit theater is paying for it with the help of a $65,000 Downtown-improvement grant from the city. But the Screening Room, which earned the grant after a long application and design process, won't get the money until it matches the amount with its own fundraising. "We're only about $10,000 away," says Scalinger. Enter board member Michael Keith, a Downtown builder who quickly put together a fundraiser that he hopes will put the theater over the top. On Friday night at the Rialto, you can do a good deed by buying a ticket to Bad Fest. It's a multimedia event, of course. Several screens will show movies bad and not while several Tucson bands (good ones) perform on the Rialto's stage, starting with Marianne Dissard at 7 p.m., followed by Jimmy Carr's Awkward Moment, Calle Debauche, Monster Pussy and Flagrante Delicto. T-shirts will be given to those with the best bad hair, the best bad attitude, the best my bad and several other bad categories. Admission is $15 if you show up between 6:30 and 9 p.m. or $5 if you enter after that.

The concept came from David Aguirre, a man with his finger in every artistic pot between the Santa Cruz and the snake bridge. "The idea fountain, I like to call him," says Keith, the general contractor for the marquee project. The Screening Room hopes the marquee will bring added attention to the Arizona International Film Festival it hosts each spring. "Our intention is to kick the festival up to the next level by working with the Fox and the Rialto," says Keith. In the meantime, we can help shine some light on Congress Street by being bad on Friday.


http://www.azmac.org/scroom/index.html

[dintares]

The Screening Room should do like The Loft and sell beer there and have movies playing more frequently.

[atbg8654]

Bye bye Colorado Rockies...Only in Tucson would these types of things happen...two vacant ballparks rest here

[kaneui]

Even though Rio Nuevo survived the legislative ax, the financing of the cenvention center expansion and new hotel is anything but certain:


Many factors affect downtown hotel funding
By Nicholas Smith,
Inside Tucson Business
June 19, 2009

If all goes according to plan, it will be hard to dismiss the successes of Rio Nuevo when people look at the Tucson skyline in three years. That's when the 525-room, 26-story Sheraton Tucson Convention Center Hotel is set to be finished. Until then, there are several things that can happen that will affect the funding of the project. Fortunately, you don't need a financial degree to understand how the city will pay for the $167 million hotel. Picking which method to fund the hotel is a bit like reading a Choose Your Own Adventure book. Select option one and you'll be exempt from bond taxes, but have to redirect the bed and sales tax away from the city to make up the difference. Select option two and you'll reduce ownership risk, but also cut the city out of any profits made by the hotel.

A report released in April outlines four different funding scenarios for the project. Of the three tax-exempt bond options, two of them will require the project to keep the taxes and fees that would otherwise go toward the city. The fourth, but least likely option, involves taking on private investors that would reduce the risk ownership to the city, but would also cut Tucson out of any profits from the project. The hotel and convention center project took an important step forward on May 12, when the Tucson City Council approved a $240 million agreement with Garfield Traub Development to begin construction on the project. Earlier this year, the council voted to shift the focus of the Rio Nuevo development program away from the original museum projects and toward the more "revenue generating" hotel and convention center construction.

The hotel will sit along South Granada Avenue, just north and physically connecting with the convention center. Before shovels hit the ground, a renovated east entrance to the convention center need to be completed to replace the entrance set to be torn up when hotel construction begins in March 2010. As the $240 million figure is preliminary, a more accurate estimate on the cost will come late in the year when the projects architects finish designing the hotel to come up with a guaranteed maximum price, on which funding can be based. After that, bond ratings and the interest rate they attract come into play.

The question that comes out of the plan is whether it is financeable, said Tucson Deputy Finance Director Silvia Amparano. Last month, the city's general obligation bonds received separate ratings from several agencies. Fitch rated them AA, but the rating outlook was changed from stable to negative. Moody's gave them a AA3 rating, while Standard & Poor's downgraded the GO bonds to AA- from AA. The lower interest rate we can get, the more we can borrow, Amparano said. In the most desirable plan, the Rio Nuevo Multipurpose Facilities District issues the bonds, but $4.5 million in additional revenue will be needed. In the other two tax-exempt scenarios, the City of Tucson will issue the bonds. One scenario involves a lower interest rate but will have to make up $1.1 million while the other has a higher interest rate but requires no extra revenue.

If you look at all of the publicly owned convention-center-hotels, and there have been quite a few of them, no two of them are the same as far as the financing goes. Most of them have one common thread and that's the district-owned revenue bonds to finance the project, said Steven Moffett, president of the hospitality division at Garfield Traub Development. I think our bond rating is by and large driven by our ability to generate sales tax revenue, number one. And then this hotel and this rating is going to be based more on the performance of the hotel more than it's going to be placed on the performance of the district, said Greg Shelko current director of the Rio Nuevo district.

Most likely, the financing the hotel will be based on the projected revenue for the project. The Sheraton hotel is expected to bring in $45 million in total revenue by its fifth year of operation, according to the April pre-development report. It's using the revenue and the taxes it will generate to pay for itself, Shelko said. Once completed, the hotel will be operated by Sheraton, but owned by the Rio Nuevo district, which would realize the profits. If the district owns the property for the long haul past debt retirement it owns a very valuable asset at that conclusion and has built up some very residual cash on deposit, Shelko said, adding that the district could decide to sell the hotel outright to get more cash for other Rio Nuevo projects.

By the numbers

Room count: 525

Meeting space: 35,095 sq. ft.

Cost: $167 million

Construction start: March 2010

Tentative opening: June 2012

[kaneui]

Even a last-ditch effort at the state legislature for stadium funding couldn't keep the remaining two MLB teams in Tucson from giving official notice of their imminent departure to Phoenix for spring training after 2010:


Rockies and Diamondbacks to Tucson: We're outta here
ARIZONA DAILY STAR
06.19.2009

The Colorado Rockies and Arizona Diamondbacks have notified the city and county they’ll be moving their spring training operations out of Tucson after next year. A notice delivered to the city on May 19 from the Rockies cites the fact that, with the Chicago White Sox departure to Glendale, there are now fewer than three teams training here as the reason for the move. Ten days later, the Diamondbacks notified Pima County that, in light of the Rockies' departure, they too would be leaving, as their contract requires Tucson/Pima County to have at least two major league teams training here. The Star obtained copies of both notices today.

Information on where the Rockies plan to move was not immediately available, although the Salt River Pima-Maricopa Indian Community made a pitch to build a two-team complex on tribal land east of Scottsdale to accommodate the Rockies and Arizona Diamondbacks. Tribe officials indicated the facility could be ready for play by 2011, when the teams told the city and county they plan to be gone.

A statement issued by city Parks Director Fred Gray says the city will consider any move before the 2012 season a breech of the team’s contract to use Hi Corbett Field. County Administrator Chuck Huckelberry said the Diamondbacks' notice has been turned over to the county’s legal advisers. He noted that if the Rockies' move is found to be a breech, that would void the Diamondbacks' grounds for pulling out. The team’s contract with the city runs through Dec. 31, 2011. The Rockies have trained in Tucson since the team began play in 1993. The Diamondbacks, likewise, have trained in Tucson since their inception.

[kaneui]

Originally Posted by atbg8654

Bye bye Colorado Rockies...Only in Tucson would these types of things happen...two vacant ballparks rest here

^At least the revived Tucson Toros will be making use of Hi Corbett:



Toros season off to strong start - on and off field
Mae Lee Sun
Inside Tucson Business
June 12, 2009

Already a month into their new season, the Tucson Toros have exceeded expectations. The independent league baseball team has split their first 10 home games with an average attendance of 4,000 fans and has sold their first player to a major league team. Earlier this month, the Toros sold right-handed pitcher Andrew Romo to the San Francisco Giants. The Toros began their season in mid-May and will play home games at Hi Cortbett Field in Reid Park through Aug. 27. The team is due back in town Friday (June 19) for a three-game home stand against the Yuma Scorpions.

It was 1997, the final season for the Toros at Hi Corbett Field. The team had been a Triple-A minor league baseball franchise since 1969. The next year, after affiliating with Major League Baseball’s new Arizona Diamondbacks, Tucson’s minor league team became the Sidewinders and started playing at Tucson Electric Park. That ended last year, after owner and native Tucsonan, Jay Zucker, sold the team because it was an ‘underperforming’ market Pacific Coast League standards and new owners wanted to take it Reno.

Technically, though, when the Toros moved out of Hi Corbett, the team went to Fresno, Calif., where the team is now known as the Fresno Grizzlies, the Triple-A team for the San Francisco Giants. The Sidewinders were actually birthed from the Phoenix Firebirds, who had been the Giants’ minor league team. And since the Sidewinders have subsequently become the Reno Aces, Zucker saw an opportunity to bring the Toros back to Tucson — and to Hi Corbett Field — as an independent minor league baseball franchise within the Golden Baseball League. Zucker spent $1 million on the expansion franchise fee for the Toros to join the Golden Baseball League. In the 10 years he owned the Sidewinders, Zucker says it wasn’t profitable. Although he bought the team for $8 million and sold it for $15 million, when the losses and deferred compensation and capital gains were all factored in, he says there wasn’t a lot left over.

The city’s more centrally-located Hi Corbett Field in Reid Park is a better location will reduce overhead by 40 percent, compared with TEP, Zucker said. “And, with the demise of Spring Training in Tucson, the Toros are a desirable alternative,” Zucker says. “They appeal to all segments of the market which is why we think we’ll be successful.” After adding in start-up costs of about $1.5 million and a budget for player, coach and staff salaries of nearly $2 million, Zucker says he’ll be happy if they break even.

Part of his business plan, however, is to have as many players as possible go from the Toros to Major League Baseball team rosters and that will come from being a winning team every season. While the Major League teams will pay an acquisition fee for players, Zucker says that’s not the real revenue generator. He said he expects the Toros will make money from a combination of advertising and media opportunities that includes selling signage in Hi Corbett’s outfield, ticket sales and food and gift shop concessions.

And Zucker has chosen to keep his marketing efforts in-house and at the grass roots. “Most of the people within the Toros organization have come from a media background so they know how to do PR,” said Zucker, who has a background as a TV station owner and radio account executive. “We’re holding creative press conferences to expose this sports opportunity to the community and are going out and speaking to organizations like the Rotary and Lions Club to re-establish the Toro’s name and identity.” He says the team will be expanding its outreach to include chambers of commerce and the Metropolitan Tucson Convention and Visitors Bureau. Even in this soft economy, the Toros financial standings are better than they ever were with the Sidewinders. He says season ticket sales have already topped what the Sidewinders sold in their final year.

Upcoming home games

June 19-21, against the Yuma Scorpions

July 4-6, against the Long Beach Armada

July 24-26, against the Victoria Seals

July 28-30, against the Calgary Vipers

*all games will be held at 7 p.m. Tickets can be purchased online at www.tucsontoros.com

[kaneui]

The Hampton Inn across Wilmot Road from Park Place Mall is scheduled to open later this year.
(photo: Joe Pangburn)



700 new rooms this year add to the woes of Tucson's hotel industry
By Joe Pangburn
Inside Tucson Business
June 19, 2009

Not a lot is going right these days for Southern Arizona's hotel industry:

- The City of Tucson just doubled the $1 nightly surcharge on visitors' overnight stays, which guests pay on top of a 6 percent nightly bed tax and 8.1 percent sales tax putting Tucson behind only Denver for having the second highest bed tax rates of any city in the western United States.

- At the same time, the city reduced the amount of money from the bed tax that goes to the Metropolitan Tucson Convention and Visitors Bureau (MTCVB) for marketing and attracting tourists.

- Lodgings along Interstate 10 in downtown Tucson have had to deal with two years of exit closures during the freeway's widening project.

- Region-wide, RevPAR - revenue per available room - is down 15 percent over the past year due in large part to the global economic recession.

And, as if all those weren't enough, by the end of this year nearly 700 new rooms in five new lodgings will come on line. That's the most new rooms that have been added in any one year since 1996 when there were 893. The lodgings will increase the region's 16,030 total available rooms at the start of the year by 4 percent. Then next year, another four hotels are slated to be completed, adding nearly 400 more rooms. Compare those numbers to 2008 when 217 rooms were added to inventory in two new hotels. The boom in hotel construction can be traced to a hotel industry conference in 2005 where the Tucson market was identified as being underserved. "Within months, every major hotel chain was calling asking about sites," said Jerry Hawkins, first vice president with CB Richard Ellis. "It's a good thing it wasn't easy to find sites in town or we could have been looking at a lot more coming online right now."

All indications pointed to starting construction as the right decision according to data from the MTCVB. From 2002 to 2007, Tucson's average room rate increased nearly 26 percent, the number of occupied rooms was up nearly 19 percent, the occupancy rate was closing in on 70 percent (up from 59 percent in 2005) and RevPAR was up more than 40 percent. Then the downturn came in 2008. Tucson's average room rate increased just 50 cents and the other measures were down from 6 to 7 percent. "Currently (year to date) we are 15 percent below last year and it will be a struggle the rest of this year due to overall reduction in business and leisure travel," said Rick Vaughan, senior vice president of sales and marketing for the MTCVB. "We are more optimistic for 2010 and seeing activity pick up for future years; 2010 will be a rebuilding year with some positive results with a more robust travel and convention market shaping up in 2011 and 2012." "It is difficult for these places to adjust to slower times," said Mike Chapman, first vice president with CB Richard Ellis. "You have your staffing, but you really can't cut too much there because daily business can pick up quickly and you can find yourself short-staffed." The TownePlace Suites by Marriott, 6595 S. Bay Colony Drive, opened earlier this month near Tucson International Airport. The property is Marriott's extended-stay brand.

General Manager Matthew Hallinan knows summers are not usually kind to tourism in Tucson, let alone the drop in travel around the globe. "We are using these first three months as our ramp-up period," he said. "We're working to get our name out there and then also to focus on the guests we do have. We want to hear from them, what they need from us. There are lots of choices here by the airport and all of them have a bed, all of them have a computer or some kind of internet access. But we really want to cater to the people we have and really take care of their needs." "The falling market statistics and the 192 hotel properties in the region, show the market is saturated with new properties now," Hallinan said. "But that's part of development and growth and bringing Tucson up to speed on things and get some newer accommodations in town," he said. "The type of people Tucson wants to get to come here are those who are well-traveled. Those types of people typically don't stay at a mom and pop hotel or motel. They like to see the brands they know."

Another well-known brand opening this is the 252-room Ritz-Carlton Dove Mountain Resort opening in October in Marana. "Where we saw the opportunity in Southern Arizona was the luxury segment of the market was underserved," said General Manager Mike McMahon. "We've been looking at Southern Arizona for more than 20 years trying to identify a location for a Ritz-Carlton of this caliber." Being in Marana, the Ritz-Carlton is not directly affected by Tucson's increase in the bed tax but McMahon said the whole area is affected. It affects every segment of the hotel industry," he said. "With conventions, sometimes 2 to 3 percent can add up huge and they will go somewhere else. It could end up having the reverse effect. If a jurisdiction is using that to promote the area as a destination that is a good way to increase demand.'

The 106-room Wingate by Wyndham Oro Valley, 11075 N. Oracle Road, is the only other hotel that has already opened in 2009. Other hotels scheduled to open this year are a 101-room Hampton Inn, 251 S. Wilmot Road across from Park Place Mall; the 68-room Country Inn and Suites, 665 N. Freeway Road on the west side of I-10 south of Speedway; and 68 new rooms being added as part of a complete renovation of the Lodge on the Desert, 306 N. Alvernon Way.

The City of Tucson says it's still hoping to begin construction on a new 525-room downtown Sheraton hotel next year that should be open by June 2012. "For the next 12 months hotel business will still be down," says CB Richard Ellis' Hawkins. "Occupancy will drop below 60 percent in 2009 and RevPAR will decrease more than 10 percent and up to 20 percent in some places. We'll see increases in occupancy return in latter 2010 and I think we will see more corporate America travel then, but no one wants to appear to excessive right now." MTCVB President Jonathan Walker said forecasts are difficult to judges these days because travel worldwide has slowed so significantly. "We know there will be a rebound and there will be some pent-up demand that will be released when people feel a little more comfortable traveling again," Walker said.

[kaneui]

According to Scott Stiteler and Don Martin, their development deal for the east end of downtown has bit the dust. However, as outlined in the second post by Donovan Durband, this proposal may have never been in the city's best interests:


Downtown redevelopment deal is dead, say developers
By Joe Pangburn
Inside Tucson Business
June 19, 2009

A multimillion dollar deal to develop an arts and entertainment district on the east side of downtown Tucson - including a return of noted chef Janos Wilder - is dead. After the Tucson City Council voted unanimously on June 16 to delay approval of a revised agreement with the Downtown Tucson Development Company, the two partners said they were finished negotiating. "I'm disappointed and relieved at the same time," said Don Martin, one of the partners. He said he was disappointed over how the deal was misinterpreted, especially by the Arizona Daily Star, but then said, "I'm relieved because it really was a tough deal for us and the only way it was going to work was as a true partnership. We had been talking to the council constantly and nearly every day for the past two weeks then in the council meeting it sounded like we were starting all over again. They were bringing up things that had been resolved months ago."

Martin said the $4.28 million the developers would receive was inflated on the surface. He said $1.08 million in land credits were going to square up what was left due to the predevelopment agreement with the city. The remaining $3.2 million was broken up into two $1.6 million portions. "The first $1.6 million we would receive came from $1.6 million in cash, rent abatement and property given to the different organizations including the theatre," Martin said. "That was dollar for dollar. And for that we would get the Volvo property outside the core. The other $1.6 million would come from 20,000 square feet of leases downtown and the first 4,000 square feet was going to cost us $400,000 out of pocket in improvements to bring Janos downtown."

The deal came apart when the Rialto Theatre Foundation continued to voice its dissatisfaction with the new agreement despite the developers' promise to give the Rio Nuevo Facilities District, which owns the theater, the area inside the Rialto used for bathrooms and concession stands. Another 2,500 square-foot building separate from the theater but currently used by the Rialto for offices and a green room for performers was not included in the deal and that was the sticking point. "The highest and best use for that property adjacent to the theater is for the theater to use it," said Michael Crawford, president of the Rialto Theatre Foundation. "I think it is hard to believe they are walking away when we are so close to a deal. But if that's the case and they are leaving without wanting to work out some simple, minor details that would protect the city and the theater then it just affirms to the city that this wasn't a good deal for the city. We're going to just have to wait and see what their next move is. If the city is really interested in protecting the theatre and they are unwilling to sell that property, it's not popular, but there is always the option of condemning the building and taking it through eminent domain."

Martin said the process was a learning experience for him. "You'd think that if you were operating a business on property someone else owns and you are using it rent-free, you would say, how can we help you in this, what do you need?" Martin said. "That didn't happen. From the beginning it was "this is what we want." And they killed the deal. I hope they're happy with themselves, but I don't see what their game plan was. Those were the weirdest negotiations I've ever been through in my life and I've been through a lot." Now Martin says he and Scott Stiteler will move into commercially viable agreements with businesses looking to locate into the renovated spaces once the work is complete. Martin didn't give a timeframe for that work. "We have a grant to finish the facade of the Rialto so we're going to do that and make it look real nice," he said. Stiteler didn't wish to comment on the deal but said he was going out of the country for two weeks as part of a group raising money for the Wounded Warrior Project by attempting to swim across the Sea of Cortez.

As a result of the delay, the city missed the June 17 deadline and is on the hook for up to $950,000 as a partial reimbursement to the Downtown Tucson Development Company for what has been invested already into the deal per the predevelopment agreement. City Attorney Mike Rankin cautioned the council before the vote, the council could urge the developers to bring the deal back, but they are not obligated to comply. "I feel it is my obligation to remind the council that if we pass this deadline, and there hasn't been a breach by the developer, the city is exposed to paying damages up to $950,000," Rankin said during the council meeting. Councilwoman Shirley Scott asked how that clause was affected due to the partners that have dropped out of the Downtown Tucson Development Company. Rankin replied he didn't want to get into a legal analysis but that if the city lands in a dispute, those would be the core issues they would protest. Councilwoman Nina Trasoff was the only council member to express concerns to a delay.



________________________________________________________________


Downtown Deal Looks like an Act of Desperation
June 15, 2009
http://tucsoncitizen.com/downtown/

Desperation. It’s not the proper mindset from which to make sound public policy, yet desperation seems to be the dynamic that is leading the Tucson City Council down a path that it may regret for years to come. The City is desperate to make positive things happen in Downtown with Rio Nuevo. How much of that desperation is about concern for the upcoming election and how much is a desire to hold onto the TIF funding, I do not know. The City Council seems set to approve a Development Agreement with the Downtown Tucson Development Company (DTDC), a partnership between Scott Stiteler and Don Martin. In exchange for free land, the City expects DTDC to make contributions to the Rialto Theatre, Warehouse Arts Management Organization, Skrappy’s, and possibly the Facade Improvement Program.

(My disclosure: As the former executive director of the Tucson Downtown Alliance and Downtown Tucson Partnership for several years, I know the properties and most of the characters very well. I don’t know Scott Stiteler, but I have been friendly with Don Martin for about five years. The Rialto Theatre Foundation’s executive director Doug Biggers and board president Michael Crawford are friends of mine. I used to be an active board member of WAMO, and more recently, an inactive board member of WAMO. I support the missions of both the Rialto and WAMO, and I support the City’s efforts to improve Tucson’s downtown. I also wish Stiteler and Martin the best with the development of their properties, and I hope they make lots of money doing it. Just not at taxpayer expense.)

The main element of this agreement is the giveaway of $4 million or more in City-owned real estate to DTDC, with contributions from DTDC to the Rialto Theatre, WAMO, and Skrappy’s that add up to far less than $4 million in real value. DTDC is a new company, formed after Martin bought out the interest of Doug Biggers in the 50/50 partnership of Biggers and Martin in the Rialto Block. Stiteler has been the man behind Williams and Dame Development, which left Tucson several months ago, just after their presence helped sell the first part of this deal to the City Council.

Last December, desperation led the City Council to approve the Pre-development Agreement for this deal, without proper due diligence, without proper consideration of the consequences, without proper public vetting. People were warned that they had to fall in line behind it, or else. It was the same month when desperation led the Council to sell $80 million in Rio Nuevo bonds at the worst time imaginable in terms of financing costs, so they could tie up the TIF revenue stream before the state legislature could take the funding away. That act of desperation will cost the taxpayers of Tucson millions of dollars in excess interest.

Now, six months later, the City Council is up against a deadline it never should have faced; make a deal now with DTDC or pay up. Around $950,000 to reimburse DTDC for costs they’ve incurred. Wow, I know of developers who were induced to spend a lot more than that on projects they thought they were being awarded in Downtown Tucson, and they didn’t get reimbursed a nickel. What happens if the deal goes through? Well, the City must pay DTDC $800,000 for the completion of the Concept Plan. The City pays (overpays) for that work either way. For perspective on that, consider that the entire Rio Nuevo Master Plan, adopted in 2001 with multiple consultants and lots of public outreach, cost the City $600,000!

The idea of giving away valuable real estate that fronts on Speedway, on Congress, and on Broadway should give all Tucson citizens pause. But when you consider how little is being required of the developer to provide, it is truly disturbing. When you break it down, the developer is promising to invest in his own property, and to invest a little more in the theater, which obviously enhances the value of DTDC’s property. The developer is throwing a little money ($300,000) at Skrappy’s, the Downtown Façade Program, and the Warehouse Arts Management Organization (WAMO), and it has until 2014 to make all those payments. In exchange, they get credits for $4 million in City real estate, which may be paid with the conveyance of the old Broadway Volvo site, the Congress frontage to the Ronstadt Transit Center, and part of the corner of Speedway and Stone. This after the same developer got a gonga deal on the Martin Luther King Apartments ($350,000) and also has air rights over the Depot Plaza garage to construct another residential building. And, the Rialto Block (the developer’s property) has been awarded one of four façade improvement grants from the City, for six figures. (More disclosure: I supported the Rialto Block’s façade grant award when I was on the selection committee at the Downtown Tucson Partnership last summer.)

Some property is being conveyed to the theater, but it holds nowhere near the value that makes this deal fair to both the City and the developer. And the developer is counting the construction of an elevator that the foundation does not want or need as a contribution to the theatre, in order to earn part of its credit. Why is the City not protecting the viability of its own asset, the historic Rialto Theatre? This is the time to ensure its future, by requiring the developer to whom it is giving valuable downtown real estate, to convey all of the portions of property the developer already owns and that the theater needs, to the Rialto Theatre Foundation, which manages the theatre on behalf of Rio Nuevo. The Rialto is one of a very short list of Rio Nuevo successes, yet the City acts as if it were a nuisance, and as if the City/Rio Nuevo doesn’t in fact own the building. And of course, the City needs to get true dollar-for-dollar value on the deal overall. The contributions made by the developer need to have the same real value as the properties that the City is promising to give up.

Five years ago, desperation led the City Council to approve an ill-advised deal on the former Thrifty Block. Whoever won the competition for the rights to build on that site would get the land, cleared of the old buildings, and the Indian Village Trading Post building next door, for $100. Bourn Partners won that competition, and they worked diligently to make The Post condo project work. Whatever combination of factors (mostly the housing bubble bursting) led to that development not getting off the ground, the City failed to include a reversion clause in its sale and development agreement. Once the deed was transferred to Bourn, there was nothing the City could do. So now it sits, the empty land, and the empty building. Even the Indian Village shop has long since relocated to La Placita in expectation that the Hotel Arizona was going to be redeveloped next door—two years ago!

Ask a General Manager from a pro sports franchise: Sometimes the best deal you can make is the one you don’t make. Two years from now, we should be out of the recession and the modern streetcar will be almost ready to roll into Downtown. Developers will be lining up, looking to pay the City market value for those properties, especially the one in front of the Ronstadt Center. The developer should already be properly incentivized to lease out his own space at One North Fifth and in the 200 E. Congress block. But with this deal, fully 40%, or $1.6 million in credits, is “earned” by the developer simply for leasing out space that he already owns.

Why let desperation to make something happen lead us to giving away the store?


Donovan Durband

[kaneui]

The east end of downtown is seeing some activity this summer, with the opening of the new 4th Ave. underpass and retailers arriving at One North Fifth:



Fourth Avenue Underpass to open Aug. 20
May 19, 2009 (7:05 pm)
Downtown Tucson News

The Fourth Avenue Underpass - a major artery connecting the University of Arizona, Fourth Avenue and area neighborhoods with Downtown - will open Aug. 20.

A big celebration is being planned by merchant groups on both sides of the underpass, the Old Pueblo Trolley folks, the City of Tucson and project coordinators. More information will be rolled out as it becomes available. But, save the date! This is a party you won’t want to miss.

Read more about it in the July/August issue of the Downtown Tucsonan - the Downtown Partnership’s free news magazine, available throughout Downtown and the city.


_________________________________________________


Retail center at One North Fifth quickly emerging
June 12, 2009 (11:00 am)
By Teya Vitu
Downtown Tucson News

The newly built commercial spaces alongside One North Fifth Apartments should have businesses in place by the time the Fourth Avenue underpass reopens in August. Leasing agent Patricia Schwabe is finalizing terms with three businesses that will fill the Congress Street frontage.

Xoom Juice, which has three other Tucson locations, is the only business so far announcing its pending Downtown arrival with a placard at One North Fifth. Schwabe said Yoga Oasis intends to open its third local studio at One North Fifth, and a gym with stationary bicycles also is expected.

“We are pushing everybody to open when the underpass opens Aug. 20,” Schwabe said. “In the next two months, it will all happen. At least half the space will be occupied when the underpass opens.” One North Fifth is the remodeled results of a conversion of the former Martin Luther King Jr. Apartments. The business strip runs along the foot of the apartment structure.


http://www.downtowntucson.org/

[kaneui]

Can Glenn Lyons pull off what Rio Nuevo was unable to do for 10 years? As new CEO of the Downtown Tucson Partnership, and armed with staffers from the City Planning Dept., he is showing numerous local developers and property owners a draft of a new 93-page document outlining a new vision for revitalizing downtown Tucson and beyond--with or without Rio Nuevo. (As jaded as most of us have become regarding downtown revitalization, any ray of hope in this economic downturn is encouraging.)



Rethinking Downtown boundaries tenet of revitalization plan
By Teya Vitu
Downtown Tucson News

A new Downtown revitalization plan spells out 58 recommendations to create a modern urban setting stretching from the Downtown skyscrapers to Park Place. This plan, still in draft form, takes as comprehensive a look at Downtown’s future as Downtown Tucson Partnership CEO Glenn Lyons could envision. It’s a vision that fills 93 pages. It addresses Downtown’s strength and weaknesses, and proposes ways to make Downtown safer, more attractive, exciting and livable as well as a better place for commerce and development.

Two inherent challenges face any renaissance: the Downtown core’s tiny footprint barely more than six blocks in any direction; and Downtown sits near the city’s western edge, many miles from the recent housing booms to the northwest and southeast. Perhaps a new concept in the 50-year Downtown revitalization debate, this plan is largely tied to creating an urban setting along Broadway to Park Place - the same real estate included in the Rio Nuevo Tax Increment Finance district.

Urban setting defined: Build to the front sidewalk and thus prohibit parking in front of buildings. Combine that with rezoning to allow a mix of low-scale offices and stacked townhouses and apartment complexes along Broadway. "We have to start thinking of Downtown as part of a bigger area," Lyons said. "We have to start to think of this as a central corridor, where we can build an urban environment with Downtown as something special at the end."

The report points out the Broadway corridor to Park Place has 13 acres of vacant land and 862 acres of land with one-story buildings largely built decades ago. "Had all of this activity been combined in one place," the draft plan states, "Tucson would have the makings of a Downtown appropriate for a city of 1 million people. In ’Tucson fashion,’ however, its urban activities are ’stretched’ over 6.5 miles of Broadway Boulevard." With or without Rio Nuevo, Lyons wants to press ahead with revitalizing Downtown, first by winning community support for the plan and building coalitions to carry out the recommendations. "I don’t think there’s one idea in here that the Partnership can implement on its own," Lyons said. Albert Elias, director of the city’s Urban Planning and Design Department, attended the recent unveiling of the plan to about 30 Downtown developers and property owners. "I think (the recommendations) merit consideration by the entire community," Elias said. "We need to focus on who are the partners and leaders who can implement these things."

Michael Guymon, executive director of the Metropolitan Pima Alliance, also listened to Lyons’ presentation. He has collaborated with the city Development Services Department to try to change the zoning process but "that doesn’t get us to the finish line either." "I think this is the right plan, hopefully at the right time," Guymon said. "It’s refreshing that we have someone with great experience doing these things. The problem I have historically seen is the lack of follow through. That’s the 64 dollar question."
Guymon was especially intrigued by the plan’s call to bring elements of the University of Arizona and Pima Community College directly Downtown. Lyons has a strong desire to have a college presence Downtown as is the case in many big cities, where colleges fill office buildings.

Lyons acknowledged the full breadth of this revitalization plan could take 20 or more years, and the Partnership will have to "pick and choose" causes to pursue and build coalitions to carry them out. But he already has his sights on improving existing structures as a first step: restore the original facades of dozens of early 20th century buildings; refurbish the 1970s Tucson Music Hall and Leo Rich Theatre; restore the Tucson Center for the Performing Arts (also known as the Cursillo) on Sixth Avenue; and recapitalize the Fox Theatre, the Beowulf Alley Theatre and the Screening Room. "These buildings are Downtown’s secret advantages," the plan states. "They will provide Downtown Tucson with the authentic character that cities throughout North America are desperately seeking."

"I like what he said about taking care of what we already have," said Buzz Isaacson, a broker for CB Richard Ellis specializing in Downtown office properties. "The challenge? It starts with Development Services." The plan directly addresses the challenges of working with the city Development Services Department. The department elicits widespread frustration from developers and builders for drastically slowing down projects because of unclear regulations and the long time it takes for building permits and business licenses to get issued. Recommendation No. 12 calls for the city to "create a new assisting culture” in Development Services by changing the development review process. "The two things that stand out for me: zoning and changing Development Services; and the streetcar is the most important development of them all," Lyons said. "We’ve got to put Albert (Elias) and Ernie (Duarte, the Development Services director) to the test to make change happen."

The draft plan has been presented to the Southern Arizona Leadership Council and a large group of Downtown developers and property owners. Lyons has also unveiled his plan to Downtown merchants, arts organizations and the general public. He is seeking feedback from all with the desire to present the revised plan to the Downtown Tucson Partnership Board of Directors in July. "That becomes a template we can work from," Lyons said. "It’s up to us to push it. We have to build coalitions, and pick and choose projects."

The 58 recommendations are diverse. A few are:

Sell the Ronstadt Transit Center land and redevelop that parcel.

Move the city’s and university’s radio and television operations Downtown.

Establish a policy not requiring affordable housing within market-rate housing projects, but also craft an affordable housing policy.

Revamp Downtown parking and better inform the public how to find parking, how much it costs, and adopt different parking meter and garage rates and time limits for the most heavily used spaces.

Turn Jacome Plaza at the Joel D. Valdez Main Library into a premier outdoor event space, and build an office building at the plaza’s northwest corner.


http://www.downtowntucson.org/

[kaneui]

4th Avenue Underpass Celebration August 20th
August 20, 2009 4:30pm to 10:00pm
FREE

* LOCATION: On 4th Avenue and 9th Street. NOTE: While I-10 is under construction, Click here for official construction information, we recommend you exit Interstate 10 at Prince (southbound) or 29th St. (northbound) and take the frontage roads. Click here for Directions.

A “Grand Opening” celebration for the 4th Avenue Underpass is scheduled for August 20th. 4:30pm to 10pm. After two years of construction, the underpass will finally be open to the public. The connection to downtown will be complete and once again visitors to the heart of the city can travel to and from the 4th Avenue shopping area to Downtown Tucson. The new “Bigger” underpass is a welcomed link between Downtown Tucson and 4th Avenue. A special Thank you to Sundt Construction Company who is on schedule and doing a beautiful job. We are all looking forward to the Old Pueble Trolley route extension to downtown. More specific event information about this event will be posted on this website. 4th Avenue Explore it!


http://www.fourthavenue.org/

[kaneui]

I generally resist posting too many details of the often byzantine negotiations between local developers and City Hall, but this summary by Jim Nintzel on the latest proposal involving the Rialto Theatre is not atypical of recent downtown development deals:



THE BIG FOLD
by Jim Nintzel
Tucson Weekly ("The Skinny" column)
June 25, 2009

With a unanimous vote, the Tucson City Council last week asked developers Scott Stiteler and Don Martin for a few more weeks to work out details in the complex downtown-development agreement they've been hammering out for the last six months. In response, Stiteler and Martin walked away from the deal, which would have the developers rehabbing some of their own property (including the Rialto block), passing out some cash to various downtown beneficiaries (including youth-club Skrappy's and the Warehouse Arts Management Organization) and jumping through a few more hoops. In exchange, they would have received about $4 million in city property, including a former Volvo dealership on Broadway Boulevard east of downtown, and some of the Ronstadt Transit Center property along Congress Street.

A major sticking point was the future of the Rialto Theatre, which is owned by the city and leased to the Rialto Theatre Foundation. Michael Crawford, an attorney who serves as president of the foundation's board, has been pushing to include the Rialto in the deal. Two weeks ago, the City Council, recognizing that they should protect their own asset, urged the developers to work out their differences with the Rialto Foundation, which wants "bays" on both sides of the theatre's lobby and a building behind the theatre that's used as a green room for the artists and office space for the Rialto staff. We'll remind readers that the Rialto's executive director is Doug Biggers, the former editor and publisher of the Tucson Weekly. That said, we believe the Rialto needed to be part of the deal, because it's easily the most successful element of Rio Nuevo and has succeeded in its mission of bringing people downtown, who then spend money in the nearby bars and restaurants before and after shows. Over the last four years, the Rialto has hosted more than somewhere around 500 shows that have lured more than 300,000 patrons through its doors.

The developers clearly recognize the power of the Rialto as a magnet. They've tried for the last six months to go into business with the Rialto, which wisely decided against entering into a financial partnership with Stiteler and Martin. The two developers told the City Council earlier this month that they couldn't afford to include the Rialto's request for additional space in their swap with the city. But once they saw that the council was intent on protecting its asset, they capitulated and agreed to turn over the bays to the city as part of the deal. They also offered to let the Rialto continue using the building behind the theater rent-free for the next five years, with market-rate leases after that. But in return, they wanted an easement giving them permanent access to the upstairs balcony of the theater. If they couldn't go into business with the Rialto Foundation, they wanted the next best thing: An easy way to draw the Rialto's patrons into their bar.

The Rialto Foundation was willing to discuss access to the theater, but was concerned about granting a permanent easement—especially when that request appeared without prior notice in the developer's "final offer." More troubling was the fact that the agreement to turn over property to the Rialto was not set in stone in the document the council was asked to approve last week. Instead, the two parties had six months to work out the details. Stiteler and Martin could have walked away from that portion of the deal without the theater getting anything at all—an element that left the foundation's attorneys very uneasy about the whole arrangement.

The parties might have been able to work out their differences, but Rialto officials say Martin and Stiteler walked away from negotiations with the theater on Wednesday, June 10, saying they'd made their final offer (and evidently believing they had four votes on the City Council to approve their deal). Then they delivered a revised document to the city on Friday, June 12, with a request that it be approved on Tuesday, June 16. That didn't give council members much time to review the details and suggest changes. So the City Council made the reasonable request for a few more weeks to work out their differences. Instead, Stiteler and Martin walked away—which suggests to us that they weren't all that interested in getting the deal done.

With the collapse of the deal, Stiteler and Martin can exercise an option in their contract with the city that allows them to collect up to $950,000 in expenses that they've racked up while putting the deal together. Whether the city will actually owe them that much remains to be seen. As Councilwoman Shirley Scott has pointed out, the final deal that was delivered to the council bore little resemblance to the original proposal laid out when this whole mess started. Stiteler and Martin lost a partner; developer Jim Campbell split off and made his own deal with the council, approved earlier this month, to build housing and commercial spaces east of the theater and near the new Fourth Avenue underpass. And the developers fired Williams and Dame, the Portland, Ore., planners whose reputation for downtown redevelopment lured the council into the deal in the first place.

Martin and Stiteler appear to be unhappy that the Rialto Foundation blocked their deal with the city. Within days of the council's request for more time, they informed the Rialto Foundation that it would now have to start paying $4,375 a month in rent on the spaces they've been using for free since October, when Stiteler bought out Biggers' interest in the Rialto block. As a condition to approving the month-to-month lease, the developers also expect the Rialto to pay back rent, which comes out to somewhere around $40,000. That's a ballsy request, since there had never been any agreement between the parties to pay any back rent.

It's obvious that the squeeze is on. In response, the Rialto Foundation is suggesting the city take another step to preserve its asset: Condemn the property the theater needs through eminent domain, pay an appraised price for it, and let the developers get on with whatever projects they plan to do downtown.

[kaneui]

render of Fire Dept. hqtrs. conversion to new Museum of Contemporary Art
(render: MOCA)




MOCA receives $80,000 Andy Warhol Foundation grant
By Teya Vitu
Downtown Tucson News
June 24, 2009

The Museum of Contemporary Art was recently got notified of its third grant from the Andy Warhol Foundation for the Visual Arts, which has given the museum nearly a quarter million dollars in the past two years. The $80,000 exhibition-programming grant comes from a program for which the most prestigious art museums compete, said Anne-Marie Russell, MOCA’s executive director. “I didn’t think we’d get it,” Russell said. “I thought if we got it, we’d get $25,000.”

The money will allow MOCA to upgrade the exhibitions at its first museum when it opens early next year in the current Tucson Fire Department Headquarters. Russell said the prestige of this Warhol grant would allow her to leverage it toward other programming grants. “I plan to double that with other grants,” she said.

MOCA received a $110,000 capacity building grant in 2007 from the Warhol Foundation that was used to acquire financial management, donor management, art tracking management and archives systems. It also provided a cash reserve for working capital, Russell said. A second Warhol grant for $50,000 in 2008 will fund construction work to convert the fire station into an art museum. “This continues to demonstrate to politicians and business leaders that this is a quality organization to be taken seriously,” Russell said.

[kaneui]

Any bright ideas for the city's dirt pile west of I-10? The Gadsden Co. wants to begin developing the parcel early next year, so send your creative suggestions to Rio Nuevo staffer Jessie Sanders:




The dirt piled up west of I-10 was meant to raise cultural elements of Rio Nuevo
above the flood plain. But those projects look mighty iffy, so the dirt sits there.
(photo: James S. Wood)



What will we do with all that dirt?
By Josh Brodesky
ARIZONA DAILY STAR
06.28.2009

One of Downtown's most prominent monuments will soon be moving — although no one yet knows where. Over the past few years you may have noticed a massive pile of dirt along Congress Street just west of Interstate 10. It seemed temporary enough at first. Just an enormous mound of earth briefly caught between two projects. Maybe the sheer volume — 70,000 cubic yards, about 8,000 dump trucks — seemed a little odd, but then the years passed and the dirt remained, blending into the background. It sort of became our dirt. But now the city has to move the dirt, most likely by the end of the year. It sits on land optioned to The Gadsden Co., one of the builders connected to the Mercado San Agustín, a private mixed-use commercial and residential development. Gadsden has plans to build some rental commercial buildings on the corner of West Congress and Avenida del Convento. The project will start in the first quarter, so the dirt must go. "Our lenders looked at that and asked us what it was, so we made a request" for the city to move it, said Jerry Dixon, a partner with Gadsden.

Briefly, here's the dirt on the dirt: It hails from the Cherry Field Detention Basin. The city had planned to use it to raise many of the cultural and heritage projects in and around the Mercado San Agustín out of the flood plain at the site. But now those West Side Rio Nuevo projects — museums, underground parking, a cultural plaza — may never happen as the city, under scrutiny from the state, has shifted its focus for Rio Nuevo to the Downtown hotel and Convention Center renovation. So instead of moving the dirt, the city has left it alone until it can figure out the right use.

For builders involved with the Mercado San Agustín, which features high-end custom homes starting right around $300,000, the dirt has become an extra challenge in what's already a brutal housing market. It's an eyesore that also kicks up dust and sometimes scares away prospective buyers who look at it and wonder, "What the?" It doesn't help matters that there is also a big hole in the ground just south of the Mercado District. The hole was once going to be a parking garage and some of the dirt was supposed to go towards that project, but now it's on hold, and the hole is surrounded by chain-link fence. "You see the pile of dirt all around," said Dante Archangeli, a partner in Tucson Artisan Builders, which has built six custom homes in the Mercado District. "If it gets windy, the dirt blows off the pile. … A lot of people do come down and the major number one question I get is, 'What is the city doing with all of their stuff?' They see the big hole in the ground, and they see the big pile of dirt."

Enter Jessie Sanders, who was named Rio Nuevo project coordinator a few weeks ago and is now tasked with solving the dirt riddle. "It doesn't matter what we do with the dirt, someone is going to have a problem," he said. Consider the options Sanders is facing. The city could keep the dirt on site, but that doesn't work because Gadsden needs it to be moved. The dirt could be moved to a new location, but that's expensive. The city could sell the dirt, but then what if the city needs the dirt in the future? Or finally, the city could fill the big hole near the development, which would look pretty dumb if the underground garage ever happens. "We are looking at options right now," Sanders said. "The best scenario is to work it in to whatever (other construction) is going on."

One of those options might be spreading the dirt over the back 13 acres where the Science Center was supposed to go. Even though the project is on hold, the site still needs to be above the area's flood plain. But I sort of think the city should turn it into an attraction called "The Mound of Dreams." People would come from miles around to marvel at it. If you dump it, they will come. I'm kidding, of course. And the truth is there is nothing funny about the challenges the builders at the Mercado are facing as the city struggles to finish/start projects there. "The dirt isn't the point. The dirt is really kind of secondary," said Albert Elias, the city's planning director. "If you are one of those builders, what you want the city to do is build out the project because that is ultimately going to enhance the value of their lots."

Indeed, while the dirt is an immediately pressing point, the private developers working in the Mercado District have invested roughly $25 million largely based on the assumption the city would deliver on cultural projects. "The question is, what is the appropriate stuff to put there?" said Tom Wuelpern, of Rammed Earth Development, which has built eight homes in the Mercado. "If stuff is on hold, maybe it's time to revisit what belongs there."

[kaneui]

A creative and cost-effective solution--instead of the usual banners tied to light poles, the Tucson CVB will use numerous artistic panels to serve as downtown guideposts and promote local events:



The panels have a motif that includes a Gila monster and desert peaks.
(photo: Tucson CVB)



New Downtown art to serve as welcome guideposts for visitors
10 panels will formally debut this week and can be fitted with varied messages

By Enric Volante
ARIZONA DAILY STAR
06.29.2009

Workers are to install 10 15-foot-tall works of "directional art" around Downtown this week to welcome and guide convention groups and other visitors. Tourism officials said the steel-and-glass structures, commissioned for $25,000, will be good for Downtown and business. "When groups come in and they feel welcome and appreciated, they'll come back," said Kimberly Schmitz, public-relations director for the Metropolitan Tucson Convention and Visitors Bureau. The community used banners to welcome visitors to gem shows, baseball spring training and other events. But banners were expensive and unwieldy to change, Schmitz said. The 10 art structures all look the same, but a 4-foot-wide slot accommodates different promotional banners.

Eight months ago, the bureau approached the Tucson Pima Arts Council, which put out the word to artists and helped choose the winning design, Schmitz said. Artist Alex Heveri said the groups wanted a theme "that would be iconic of Tucson." Her design includes a solar lighting system that turns on at night, plus images of a Gila monster and peaks that resemble the Tucson Mountains. "While Gila monsters aren't specific to Tucson, they're specific to the Southwest, and I didn't want to do another cactus or saguaro," Heveri said. Heveri, an attorney with the Pima County Legal Defenders Office and an artist for 14 years, said she spent her $25,000 fee on materials. Friends pitched in to help with the work. The art will be placed at sites within a one-mile radius of the Tucson Convention Center plaza and unveiled Thursday.

[kaneui]

New restaurants and club coming to downtown:



Jimmy John’s Gourmet Sandwiches coming Downtown
July 01, 2009
By Teya Vitu
http://www.downtowntucson.org

Jimmy John’s Gourmet Sandwiches is destined to move in next door to the On a Roll Sushi restaurant on Congress Street later this year. McLellan Building owner John Wesley Miller signed a five-year lease last week with Tucson franchise owner Nick Schaffer to bring Tucson’s fifth Jimmy John’s to Miller’s building at Congress and Scott Avenue. Schaffer said the eatery is expected to open in three to six months. “I feel a lot of dedicated business people and entrepreneurs are really committed to turn (downtown) around,” Schaffer said. “People are so passionate about it that it will happen.”

Shaffer opened his first Jimmy John’s in July 2003 near the University of Arizona at 749 N. Park Ave. In 2007 and 2008, he opened other Jimmy John’s at 5411 E. Broadway, 2485 N. Swan Road, 4695 N. Oracle Road. Schaffer said Tucson has the only Jimmy John’s Gourmet Sandwiches in Arizona. The Champaign, Ill.-based company has 690 stores across the country, according to its Web site. Schaffer describes Jimmy John’s as “fast, casual, quick service, with emphasis on quick. We don’t serve bread older than four hours.”

Miller is also in talks with potential tenants for the corner space next to Jimmy John’s in the former department store. “In the last few months, more and more people are thinking of moving downtown,” Miller said. Miller said he still has 20,000 square feet available to lease at McLellan, including the entire lower level underground. On a Roll fills 2,700 square feet, Jimmy John’s will take 1,500 square feet, and Miller’s office in the back uses about 1,000 square feet.


---------------------------------------------------------------


Club, maybe steakhouse, to open in Downtown Tucson
By Coley Ward
ARIZONA DAILY STAR
07.01.2009

Luke Cusack, who owns Pearl Nightclub, is getting ready to open a new Downtown club called Zen Rock, in the space that used to house Asylum. Cusack didn’t deliver on a past promise to open a new Downtown club — remember talk in early 2008 about a “party club” at 61 E. Congress St., the spot that once housed Heart Five? But he seems serious about this one at 121 E. Congress St. He’s even begun hiring.

Cusack says the decor at Zen Rock is Oriental meets rock ’n’ roll, and the music will be mostly dance music. “We’ve got autographed guitars from Sammy Hagar and Bon Jovi,” he says. “And a drum set from Mick Fleetwood.” Cusack says the club will usually have a $5 cover, and mixed drinks will cost $3.75. He hopes to launch his new club on July 16, and he says he’ll also open a second Downtown club later this summer with a Downtown steakhouse, tentatively named Steak In The Neighborhood, to follow.

[kaneui]

In spite of impassioned pleas such as this one, the city's Historic Preservation Committee signed off on TEP's demolition permit for the historic Santa Rita Hotel:



The Santa Rita's demolition continues downtown's trend of destroying history
by Ken Scoville
Tucson Weekly - Guest Opinion
June 18, 2009

Will the relocation of Tucson Electric Power's headquarters to downtown Tucson become the latest tragedy in the revitalization of downtown? Typically, corporate headquarters become trophy buildings that have a revitalization impact similar to that of a mausoleum. The chosen location is the property at Scott Avenue and Broadway Boulevard, where the grandest of our downtown hotels stood until the wrecking ball was brought in on a cold December day in 1972. The original Santa Rita Hotel of 1904, designed by Henry Trost, was demolished, but an addition constructed in 1917 was retained. In grand Tucson style, this landmark hotel was replaced by surface parking and a single-story restaurant.

Now, the current owners plan to "improve" the site by demolishing the 1917 addition as part of the sale to TEP, thus continuing the mentality that any existing resources on site are of little value from an historic or green perspective. Nothing says "no way" like a speedy demolition before any real plans are completed. Any claim that the 1917 addition might be historic has been all tidied up with an evaluation that looks at the stucco-ed 1970s exterior. It gets messy if you ask whether there are resources underneath that have integrity. The city always supports the "one blind date" approach, and there is never time for a second look, even though we will soon have another vacant lot in the name of downtown revitalization.

The city of Tucson historic preservation officer endorses this "don't look" approach. He is quickly becoming the Neville Chamberlain of historic-preservation, given this endorsement and his recent support of demolishing more than half of the Ghost Ranch Lodge on Miracle Mile Road. We are told not to harbor any thoughts that this project could become another Thrifty Block, since TEP is all ready to go and will be bringing 300 employees. And it's too big to fail. The 1917 addition is constructed with reinforced concrete and certainly could be reused, but TEP is taking the same stand with this as it is the historic issue. Their preliminary plans choose demolition, despite all the green issues regarding the energy used to make the materials, build the 1917 addition and demolish the building. TEP wants a shiny new green building, and one of the closing requirements is that ever-important vacant lot when the deed is recorded.

A successful downtown revitalization needs to restore what made this a major gathering spot for the Tucson community in decades past. There is plenty of space on the site to accomplish this and allow the headquarters for Tucson Electric Power. The 1917 addition could be retained and restored for office use now, with design elements that would allow residential use in the future. Could we actually plan for future uses or expansions rather than mimic La Placita and other downtown buildings with little flexibility for residential use? This could be a great opportunity for future TEP employees who might like to walk to work and have an urban experience. A new lobby could connect the 1917 addition to the TEP building and serve as a community-gathering spot, as did the original lobby of the Santa Rita Hotel—a public lobby that is designed for people rather than just as a passageway to the elevators as can be seen at the UniSource Tower.

The original Santa Rita Hotel quickly became the place in small-town Tucson during its grand opening in 1904. The two-story lobby was a marble showplace that in later decades became famous as the site of cattle auctions, with straw laid down before the cattle were checked in. The Mission-Revival-designed hotel also featured a rooftop patio where the community danced almost all night during special occasions. This rooftop gathering spot could be brought back on the top of the new lobby, or even the parking garage, as a completely "new" venue for downtown. Downtown revitalization is about incorporating the past with the future, and constructing buildings that can be adapted for different uses and desires for future urban experiences. This is not interfering with private-property rights, but changing the mentality and egos of our movers and shakers, elected or not. The real tragedy is that except for the protection of a few landmark buildings, we continue the very actions that have brought our downtown to its knees.

[kaneui]

The Ritz-Carlton, Dove Mountain, seen in an aerial photo, will open on
schedule in October despite shaky market conditions, officials of
the Marana resort say.
(photo: Ritz-Carlton)



Ritz stays the course amid uncertainty
Posh resort in Marana nearly finished, on track for opening in late fall

By Dale Quinn
ARIZONA DAILY STAR
07.04.2009

It may be one of the toughest years to open a full-service luxury resort and spa, but the Ritz-Carlton, Dove Mountain, is pushing full-steam ahead. The hotel bustled with construction activity Thursday, and resort officials said the work will be done in October. The 250-room resort should open in late fall, said General Manager Michael McMahon, but he wouldn't get specific about an exact date. Fully staffed, the resort will employ between 350 and 450 people, with most coming from the Tucson area rather than transfers from other Ritz-Carlton hotels, McMahon said.

But by any measure, it's not an ideal time to be opening a resort. Occupancy rates are at historic lows. Luxury digs in Tucson and across the country have slashed prices to attract customers. And that means resort owners are pulling in less money from each room. Resort officials likely would prefer to open under better circumstances, said Brian Baltin, a senior vice president with PKF Consulting, which tracks the hotel and resort industry. "They are going to have challenges, many more than they would have if they opened in 2005 or even 2006," Baltin said. "But assuming they're financed adequately and they've got the financial staying power, in the long term, they won't be affected."

McMahon is optimistic that the Ritz-Carlton, which sits in the Tortolita Mountains northwest of Tucson, will open as the hotel industry rebounds. He said Ritz-Carlton is growing despite these tough times. The brand has plans to open four hotels in the United States. "You have to focus on delivering value and I think in difficult economic times, people migrate to brands they can trust and brands that can deliver extraordinary resort experiences," McMahon said. The resort at 15000 N. Secret Springs Drive in Marana will offer Ritz's level of luxury — the linens will have a 400-thread count, the pool will feature a slide four stories tall, and the spa will offer tanning areas where water bubbles up from under rocks. Added to this will be a distinctly "Old West" flavor, McMahon said — the woodwork is hewn of mesquite and Arizona juniper, for instance. He said Ritz-Carlton aims to have the resort become the first in the Tucson area to achieve AAA's highest rating of five diamonds.

Under normal circumstances, the emergence of a luxury brand like Ritz-Carlton and the prestige it carries would benefit all Tucson resorts, said Brian Johnson, the managing director of Loews Ventana Canyon Resort. But these aren't normal times, he said. "When you add new inventory to an already depressed market, we start seeing pricing coming down," Johnson said. "And I'm sure Ritz is not going in with their normal plan in opening a hotel." In fact, it's probably the worst time to open a luxury property since World War II, said David Brudney of David Brudney & Associates, a hospitality marketing consultant based in Carlsbad, Calif. "They're going to be hard-pressed to do well," Brudney said. He based that assessment on occupancy rates and revenue per available room for Arizona resorts. Luxury resorts have felt pressure from both the bad economy and the "AIG effect," Brudney said. The "AIG effect" has led many companies to reconsider spending cash on luxurious retreats at posh getaways since the notorious retreats taken by executives from the insurance company American International Group, or AIG, which got billions in taxpayer bailout dollars.

The resort could succeed and eventually thrive, though, if it does three things, Brudney said:
• Ensures it has proper funding to cover the first six to nine months of operation if occupancy rates are lower than expected.
• Does proper sales and marketing connected with its target audience of both leisure and group business travelers.
• Secures bookings from the group market in advance of the opening date.

McMahon said the main draw for the Ritz-Carlton is that it provides an ultimate package of golf, spa and outdoor activities. "If we're not dealing an extraordinary experience with the perception of value, we're failing," McMahon said. And when it comes to business travelers, the Ritz-Carlton, Dove Mountain, has 10,000 confirmed group room bookings for meetings and special events starting in January, he said. But while McMahon stressed value in the Ritz's packages, he acknowledged it's a brand associated with luxury and that comes with a cost. "They will pay a premium for a premium experience," he said.