CITY ENDING $1-A-YEAR RENT FOR ATC

Cost may go to $57K for ATC to rent Temple of Music and Art

2013-01-29T00:00:00Z 2013-01-29T12:22:40Z Cost may go to $57K for ATC to rent Temple of Music and ArtDarren DaRonco Arizona Daily Star Arizona Daily Star
January 29, 2013 12:00 am  • 

Rents have gone up for many folks in recent years. But probably not as dramatically as what the city of Tucson has in mind for the Arizona Theatre Company.

As part of a 2011 city ordinance doing away with $1-a-year agreements for city-owned property, the city plans to charge ATC around $57,000 a year to stay in the historical Temple of Music and Art.

ATC won't have to write a check for the entire amount to the city, though. Instead, most of the money would come from the theater company assuming some of the approximately $180,000 the city incurs in utilities, repairs and other upkeep for the building at 330 S. Scott Ave.

The rent increase comes as no surprise to ATC, which planned for it in the company's current budget.

"The city has pressing needs," said Mark Cole, ATC's managing director. "I don't have any problems with it; we are willing to pay more for the temple."

ATC became the Temple of Music and Art's major tenant in 1990, after the city sunk about $4.9 million into purchasing and restoring the historical building. In addition, ATC paid about $342,000 for renovations needed to make it usable as a theater, and over the years has invested close to $1 million for capital improvements and equipment.

The city stepped in in response to a community outcry after the former private owner of the temple announced plans to replace the 1927 Spanish colonial revival community icon with an office building.

Cole refused to give details of what ATC will be obliged to pay because negotiations are ongoing.

"I think we have something on the table that's going to pass," he said. "We want to make sure the deal is fair and appropriate."

While the final amount may be below market value for the building, Cole said a bargain rate is justified.

"We are the major arts anchor and a reason to come to downtown," he said.

History of deals

For decades, the city entered into a series of $1-a-year lease agreements aimed at assisting community betterment programs, primarily nonprofit cultural, educational or social welfare programs.

That changed in 2011 when Councilman Steve Kozachik pushed for enforcement of an already-existing city policy.

"There was a city administrative directive that covered these leases that was implemented during (former City Manager) Mike Hein's tenure," Kozachik said. "But the directive didn't apply to the City Council, who routinely overruled it. So when I got to the city, I asked, "How come we weren't doing this?"

Now, when a $1-a-year lease expires, said Hector Martinez, the city's real-estate program director, the city must charge market rate prices or, in the case of nonprofits, 25 percent of the market rate for commercial properties or unimproved residential properties.

The city has 37 properties it leases out. About half have already had their rent adjusted, ranging from $250 to $11,232 a year.

Also gone are the 99-year lease terms. Under the new rules, the city can't sign a lease agreement for longer than five years.

Although many of the remaining dollar-a-year leases expire within the next 10 years, four of them have more than 50 years to run. The last one, with El Pueblo Health Center, doesn't expire for another 95 years.

Final terms haven't been decided yet with the ATC, but Martinez said they likely will be established within the next few weeks because the item is set for a City Council vote in late February.

Other properties leased out by city

Other $1-a-year city property leases (Tenants may be responsible for building maintenance or restoration in lieu of direct rent.)

Lessee Use Location Lease Expiration Date

Tohono O'odham Nation Parking lot 5990 W. Ajo Way M2M*

Child Parent Center Headstart program 2160 N. Sixth Ave. M2M*

Tucson Community Cable Offices and studio 124 E. Broadway June 2014

Sonoran Art Foundation Education facility 633 W. 18th St. M2M*

Brewster Center (Emerge) Victim services 2711 E. Broadway December 2013

Museum of Contemporary Art Museum 265 S. Church Ave. November 2014

La Pilita Association Wishing shrine 420 S. Main Ave. December 2015

Child Parent Center Headstart program 701 W. Tipton St. April 2017

Marshall Home for Men Men's shelter 3314 S. 16th Ave. March 2019

Pima College Adult Ed Classes 1390 W. Speedway August 2023

Tucson Children's Museum Museum 200 S. Sixth Ave. September 2023

Tucson Airport Authority Airport ground lease 7000 S Country Club October 2023

Pima College Parking Bonita Ave. and Commerce Park October 2049

Tucson Museum of Art Museum 180 N. Main Ave. November 2072

National Law Center Ground lease for office 440 N Bonita Ave. April 2074

Chamber of Commerce Ground lease for office 465 W. St. Mary's Road January 2078

Catholic Community Services Center for Handicapped 1023 N. Tyndall Ave. December 2082

El Pueblo Health Center Health center ground Lease 4902 S. Missiondale Ave. May 2108

* M2M is a month-to-month lease.

- Source: city of Tucson

Did you know?

According to the American for the Arts' "Arts and Economic Prosperity IV" study released last year, ATC generated $69,184 in sales tax in the 2011-12 season. The company has a little more than 100 employees in Tucson, which brings in close to $200,000 a year in taxes.

Star editor Kathy Allen contributed to this article. Contact reporter Darren DaRonco at 573-4243 or ddaronco@azstarnet.com.

Copyright 2014 Arizona Daily Star. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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