Rio Nuevo's board filed a $47 million claim against the city Friday in an effort to recover money it spent to acquire and improve land downtown.
The claim, a precursor to a lawsuit, also demands that the city give the board nearly all the land on the west side of downtown and the site for a proposed arena along the Interstate 10 frontage road between West Congress and West Cushing streets.
The land on the west side includes most of the land where Tucson Origins Heritage Park would have been built, the site of a proposed University of Arizona Science Center and Arizona State Museum, and an adjacent property that has been excavated that is commonly known as the "hole in the ground." The only public land on the west side area that has been excluded from the board's claim is Mission Gardens, which is owned by Pima County.
The city improperly kept the land instead of giving it to Rio Nuevo, failed to convey properties to the board and spent significant amounts of the district's money on those properties, the claim contends.
Friday's filing is the first of a group of claims that the board will file against the city regarding properties and spending downtown, said Jodi Bain, who chairs Rio Nuevo's board. "That's where we are," she said.
Last month the board canceled a planned agreement with the city over money and ownership of downtown land. Board members said then they would use legal claims to assert Rio Nuevo's rights.
The two entities have been at odds since the Legislature stripped control of Rio Nuevo from the city after the city-controlled downtown redevelopment district spent $230 million downtown with little to show for it. The Arizona attorney general and the FBI have launched an investigation into how the $230 million was spent.
Since Rio Nuevo had in essence been a city department, creating an entirely new entity outside the city has been a painstaking process.
Both sides have blamed each other for the impasse. Rio Nuevo has said the city hasn't given proper financial records and left the redevelopment district as an utter mess. The city contends the board is stalling, misrepresenting its financial situation and trying to get media attention.
The governor, Senate president and speaker of the House name Rio Nuevo board members, and the district is funded by tax-increment financing that is returned to Rio Nuevo instead of given to the state.
Bain said the claim won't necessarily result in a lawsuit if the city gives Rio Nuevo what it is asking for. She said giving the land to the district will allow the new Rio Nuevo board, which was formed in the spring of 2010, to move forward and do projects.
"Just give it to us, leave us alone and we'll do something good," Bain said.
However, when the Legislature stripped control of the district from the city, it mandated that all new money be spent on the Tucson Convention Center or a new downtown hotel, which has since been nixed.
City officials had not seen the claim as of late Friday.
However, Councilman Steve Kozachik said the two sides should meet in public to hash out the issues, because lawsuits waste taxpayer money.
"It's unfortunate. It's a waste of taxpayer money," Kozachik said. "I'm discouraged that's the route they've chosen."
Despite the claim, Kozachik wants the two sides to work together to fix up the TCC, which he said is the one thing everyone agrees on.
City Attorney Mike Rankin scheduled an executive session during Tuesday's council meeting in case the city was served with a claim from Rio Nuevo. Rankin said there are several reasons claims are filed: because it's required to start a lawsuit, to meet legal deadlines to protect rights, to create leverage and bolster a bargaining position, or sometimes for media value.
The city has 60 days to review the claim and either accept it, reject it or try to negotiate the issues in the claim, Rankin said.
Contact reporter Rob O'Dell at 573-4346 or firstname.lastname@example.org.