TUCSON - Rio Nuevo now has two proposals to develop land it owns near the Tucson Convention Center. The Rio Nuevo Board voted 4-1 Tuesday to publicly interview the two bidders in a final evaluation before it selects a winner to purchase and develop the approximately 8.5 acres of land now occupied by the Greyhound Bus Depot.
In May, the district sought bids on the property behind the TCC along Granada Avenue, east of Interstate 10 and north of Cushing Street.
One bid for $5.3 million ($14.31 PSF) and the other for $250,000 more ($14.99 PSF) for the 8.5 acres lot. Both bids promise to transform the site of the current Greyhound station into a vibrant western gateway to downtown. To accomplish that, both include plans for a hotel, parking garage and some mix of apartments, office space, and restaurants and shops.
The first bid, for a $100 million development, is from Allan Norville, who owns land adjacent to the property. The other, for nearly $112 million, is from Peach Properties (Ron Schwabe) with pre-leased office space for 160,000-square-feet office space.
Once the Rio Nuevo Board picks a winner, it would then enter into negotiations to develop a final agreement.
Both bidders also have a history with the property.
Developer Allan Norville owns about 10 acres adjacent to the property. Earlier this year, the board agreed to a stipulation that whoever winds up developing the Rio Nuevo land would build Norville a 1,200-space parking garage for his planned 120,000-square-foot exhibition center.
The other bidder, Peach Properties, won a bid for the parcel in 2009 when the city ran Rio Nuevo. But Peach wound up filing a $1.9 million claim when, according to Peach, the city reneged on the deal.
Peach has yet to file a lawsuit. If it does, and prevails, Rio Nuevo would pay for the city’s costs as part the two entities’ 2013 settlement.
So how do the two developments stack up?
Norville proposal
- Estimated cost of $100 million.
- Would pay $5.6 million for the land.
- Hotel with 140 rooms.
- Eight buildings, including Norville’s exhibition hall, which he will build on his existing property. Ninety-six unit apartment complex.
Peach proposal
- Estimate cost of $111.8 million.
- Would pay $5.4 million for the land.
- Hotel with 160 rooms.
- Twelve buildings.
- Three-hundred twenty apartments.
Both development plans would seek various forms of tax and other incentives from the city and Rio Nuevo to partially fund their projects.
Rio Nuevo board members ranked the two proposals prior to Tuesday’s meeting but weren’t comfort able picking a winner just yet.
Board member Mark Irvin said while both proposals looked solid, he still had plenty of questions to pose before he could support one over the other.
The majority of the board concurred and voted to hold a special meeting within the next few weeks to interview representatives for both proposals to flesh out more details.
Board member Alberto Moore opposed the interview plan, fearing it could drag the process out for weeks or months and cost both developers more money.
Norville had hoped the board would have settled on a final decision yesterday.
“We would prefer that they picked a winner,” Norville said. “But it’s the process, so we’ll adhere to it and prepare for it. We have a great team and will be ready for the presentation.”
Ron Schwabe of Peach Properties said it’s been a long road regarding his company’s pursuit of the property and he is looking forward to stating his case during the interview. Schwabe is teamed up with Ryan Cos. US Inc.
Since opening its Southwest office in 1994, Ryan Cos. US Inc. has built more than 18-million-square-feet of office, industrial, medical and retail space in Arizona including the Uni Source Building in Downtown Tucson. This year, the company worked on GoDaddy’s 150,000-square-foot office building at the Arizona State University Research Park in Tempe. The two-story facility eventually will house more than 700 employees in GoDaddy’s global technology business segment – many of them new hires. Ryan is serving as the developer owner, builder and manager for the project. The company also initiated work on Marina Heights, a 2 million-square-foot, five-building project along Tempe Town Lake in which State Farm will lease approximately 1.9 million-square-feet.
Rio Nuevo Chairman Fletcher McCusker said unlike some past Rio Nuevo deals, a final agreement would likely entail provisions that would revert the property back to the district if development falters.
“We don’t want to turn a development loose and then not have any benchmarks tied to it,” McCusker said.
Portions of this story are from the Arizona Daily Star to see their story go to : https://bit.ly/1l4bElk