Downtown Rio Nuevo District News
The Downtown Rio Nuevo District has been moving quickly of late with decisions being made to invest in a hotel parking garage, TCC repairs getting done and negotiations for an 8.5 acre property being used by the Greyhound Bus Depot that may cause more litigation, just as Rio Nuevo was finally free of all law suites. The Rio Nuevo District will soon have a new name, so to keep our readers up to date on all these changes, we thought it would be helpful to give an update of the significant happenings in one place. We’ll continue to track news on all these projects or any new ones, as they break in the Real Estate Daily Buzz.
STITELER EXPECTS TO BREAK GROUND ON 7-STORY, 150-ROOM HOTEL
Developer Scott Stiteler says his upcoming downtown hotel project, a 150-room, seven-story tower at the Northwest corner of Fifth and Broadway, is now about two months into its design phase. The hotel, tentatively to be called AC Tucson, will reflect the European boutique style of the AC Hotels brand, which Marriott acquired in 2010 and will soon reveal across the country, mostly in major urban centers like Manhattan, San Francisco, Chicago, and Miami. The average daily rate would be about $145, Stiteler told the Rio Nuevo board in July. Stiteler said the hotel is now about two months in to its design phase. Project leaders have traveled to Spain, the birthplace of the AC brand. He expects construction to begin this summer, with the hotel completed about a year and a half later.
The property will sit on the roughly 80-space parking lot behind the Hub restaurant and will require the demolition of the Bellovin Karnas Camarena building. The hotel includes one level of subterranean parking with seven above-ground stories. In July, the Rio Nuevo board agreed to fund $4.3 million of the $27 million project, which would give Rio Nuevo ownership of the more than 200 parking spaces in the hotel’s subterranean garage. Stiteler will lease back the spaces at $80 per month per space to pay back the loan. The hotel is expected to generate about $10 million to Rio Nuevo District TIF fund over 12 years.
TCC Repairs
The Rio Nuevo board unanimously approved a general contractor last week to begin the pre-construction process on $4.9 million in repairs to the Tucson Convention Center arena. Concord General Contracting was awarded the contract for $35,160 to begin planning for renovations to the TCC’s bathrooms, ceilings, concession areas and more. Concord President John Nyman said his company is looking forward to working on this important project to our community and wants to do its part to make sure it is a success. Concord is asking for $257,250 to oversee the entire project. Once a contract is finalized, Concord would e responsible for any costs that exceeded the budget. Construction is scheduled to start in March 2014 and last around nine months. Rio Nuevo is also replacing floor seats and fixed seats, but those will fall under separate contracts. Overall, Rio Nuevo will put $7.8 million into TCC renovations.
The board also approved $39,970.00 for Stantec Engineering to complete the engineering work to prevent flooding on the Arena Lot.
Greyhound Bus Depot Property
The Rio Nuevo board also unanimously approved taking over the downtown city property near Cushing Street and Granada Avenue where an arena was once planned. The 8.5-acre property, now the site of the Greyhound Bus depot, was part of the district’s settlement with the city. While Rio Nuevo did accept title to the land, it still must resolve a $1.9 million claim by Peach Properties asserting that the city reneged on a deal to award the property to the company. The board directed its attorney to enter into talks with Peach. There also remains questions about 137 parking spaces the city currently leases to Parkwise for $35 a month per space. Board member Mark Irvin said these spaces could generate a consistent income for the district. The board tentatively agreed to consider the issue at the next meeting Nov.19th. If the board does come up with a development plan for the site, it must give Greyhound a one-year notice to relocate. The city is responsible for Greyhound’s relocation costs.
District to Change Name
The Rio Nuevo board also approved 4-1 a naming contest among high school students to give a new name to the district. Seniors from 13 schools will submit suggested names.
Each City Council member will then select one winner from his or her ward who will receive a $500 scholarship. The Rio Nuevo board will then select the overall winner. A consultant was hired for up to $1,500 to orchestrate the contest. The entire contest is expected to cost $6,000. Board member Jeff Hill opposed the idea and allocation of funds. “No matter what our name is, it is going to be referred to as the former Rio Nuevo anyway,” said Hill. “It’s just an exercise in futility.”
2013 AUDIT APPROVED
The board also unanimously approved the 2013 independent audit, the second year in a row where the District received an unqualified opinion regarding the District’s financial books and records. 2010 and 2011 annual audits were “qualified” by the auditors due to inaccurate accounting and record keeping.
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