Peach-Dabdoub Downtown Tucson Revitalization Projects Underway

Peach-Dabdoub Projects in Downtown Tucson

TUCSON, Arizona — The final piece of a public-private partnership between the Rio Nuevo District, Peach Properties (Ron Schwabe, manager) and Dabdoub Investments (Marcel Dabdoub, manager) has been assembled. Schwabe and Dabdoub acquired 123 S Stone Avenue in Tucson for $1.25 million ($116 PSF).

As part of the Public-Private Partnership (P3) project, Rio Nuevo will invest up to $4.4 million dollars in restorations of four iconic buildings, the projected value of which upon completion will be in excess of $19 million dollars. The four downtown properties include The Chicago Store, the Arizona Hotel, the Brings Chapel on South Scott, and 123 South Stone.

Each of the properties will be a mix of retail, food and beverage which the developers estimate will create over $1.3 million dollars per year in direct tax benefit within the District.

Restauranteur Chris Bianco has announced that he will also partner with the developers to keep his highly rated restaurant in downtown Tucson, along with a number of known businesses from EXO Coffee to the restaurant operators behind Obon Sushi were announced as tenants.

To learn more, see RED Comp #4483.

Much of the Peach-Dabdoub presentation for the Downtown Tucson Revitalization of these properties is posted here for viewing.




Uber / UA Public Private Partnership Opening Soon at UA Tech Center

uber-ua-partnershipAccording to public records, Uber Technologies, the ride-sharing company, is scheduled to have Tenant Improvements completed soon for opening. In partnership with The University of Arizona, the company is researching new mapping and transportation innovations — including driverless cars and is scheduled to open its 40,000-square-feet facility in the UA Tech Center.

The space is to become home to Uber’s mapping test vehicles. As part of the partnership – which focuses on research and development in the optics space for mapping and safety, Uber will donate $25,000 of its vast $7 billion warchest to the university’s College of Optical Sciences for scholarships to help the next generation of scientists, engineers and researchers continue to explore and develop new, innovative technology.

Uber will also partner with the UA on student engagement and a scholarship program in the College of Optical Sciences that will support our efforts in the 100% Engagement initiative as well as those in expanding accessibility to affordable higher education. This is a very exciting new partnership, and I am so very glad that the UA’s global research leadership and commitment to innovation allows us to join in a collaborative effort that will have great benefit for this state. One of the exciting facets of public-private partnerships such as this one with Uber is to see University research engaged at the forefront of commercial and technological innovation. I am impressed with Uber’s vision and commitment to support discovery that will drive Arizona’s innovation and knowledge economy. I am grateful for Governor Ducey’s support for this partnership and for his leadership in helping to facilitate it. I look forward to the great things the partnership will do for our state and its people.

While driverless vehicles are not yet legal on public roads in Arizona and most states, Uber engineers will ply the local roadways, testing new technologies that will eventually enable driver-free vehicles.

Uber CEO, Travis Kalanick, has pointed out the benefits of self-driving cars in the past, highlighting that creating a fleet of driverless vehicles removes most of the cost of the service — which could eventually remove the need for car ownership completely.

Some of that work is already going on in Pittsburgh, where Uber opened an advanced-technologies center at Carnegie Mellon University in February 2015, as it kicked off its driverless-car project.

“This is an exciting new partnership, and I am glad that the UA’s global research leadership allows us to join in a collaborative effort that will have great benefit for this state,” said University of Arizona President Ann Weaver Hart. “Ranked as top-20 public research university by the National Science Foundation, the UA’s role in Arizona’s innovation and knowledge economy is absolutely vital. Our achievements in advanced optics and imaging technologies will help Uber on the ground in Arizona. I’m impressed with Uber’s vision and commitment to this partnership, and grateful for Governor Ducey’s support and leadership in helping to facilitate it.




Tucson’s P3 Hotel Moves Forward with Rio Nuevo Board Approval

Rendering AC Marriott Hotel Tucson
Rendering AC Marriott Hotel Tucson

Developer Scott Stiteler and partners want to build an 8-story, 150-room AC Marriott Hotel at 5th Avenue, between Broadway and Congress in downtown Tucson. The Rio Nuevo Board had been working on this public-private partnership (P3) project since July, 2013 and on Monday, history was in the making as the Rio Nuevo Board approved this P3 hotel project.

It does seem ironic that with the mandate for a district hotel about to be lifted with the passage of SB 1351, that it is now a P3 project for a hotel comes together. However, it was started long before anyone knew the law would pass.

The deal itself is a little complicated, as most public-private partnership are, and the Rio Nuevo board members spent several hours in discussion, asking questions of legal counsel and Stiteler before being assured the taxpayers would be secure – no matter what happened.

Here’s how it is structured: Rio Nuevo agrees to buy the hotel’s parking structure once complete for $4.3 million in a sale / leaseback agreement with developer. Secured by approximately 200 parking spaces and leased to the hotel for $80 per month per space with escalations up to $100 per month over a seven year term with renewals. The developer can purchase the parking garage in those seven years using a complex formula that equates to 50% of the rent paid Rio Nuevo and a contingency that TIFF revenues from the hotel are 3 times higher than rent. The price to extend the option purchase past seven years is an additional $1 million.

The parking garage is to be built by the developer and transfers to Rio Nuevo only after certificate of occupancy is obtained. That could be as early as two years from now when Rio Nuevo would actually make payment of the $4.3 million for the garage. The leaseback payments start 6-months after close of escrow and is a true triple net lease, with developer responsible for all operating and maintenance costs of the garage. Full terms and conditions were laid out in a 40-page document between Rio Nuevo and hotel developer including all the various “what-if’s” scenarios.

The land costs for the 25,000-square-foot lot and construction will probably exceed the $4.3 million Rio Nuevo is paying, with no other costs passed on to the District. The construction cost for the whole package is nearly $32 million, with most of the money coming from the developer and an $8 million HUD loan.

The lease rate per space provides income to Rio Nuevo at rates higher than normal in the central business district. Stiteler reported that Depot Plaza is leased at $60 per space per month and Plaza Centro is $70 per space. Both are City operated and maintained, while the hotel parking will be lessee maintained and operated.

Stiteler claims, “The hotel will create 220 new jobs downtown and more than 220 construction jobs plus multipliers.”

With Rio Nuevo approval in place, Stiteler is seeking the City of Tucson approval at its June meeting. The project already has approval from Marriott for the hotel, HUD loan approval contingent upon the City of Tucson, GPLED and tax incentives for sidewalks and Arizona Avenue are being requested of the City. Stiteler feels optimistic it will all come together, “We’ve come a long way and I’m eager to build this hotel in this community,” Stiteler said.

The developer behind Proper, Diablo Burger, Hub, Sparkroot, Playground and other popular locations downtown, Stiteler has been a placemaker for downtown for some time, developing and promoting the downtown core as a truly urban destination that models the live, work, play ideal.

As Mark Irvin, Secretary of the Rio Nuevo Board said after the meeting, “This deal really makes sense; I’m proud we voted to move forward.”

For AC Hotel marketing brochure click here: ac hotels