The City Council voted Tuesday afternoon to end all mediation with the Rio Nuevo District after receiving a $25 million notice of claim against the Tucson Convention Center.
The vote was calculated to force the dispute between the city and state-appointed Rio Nuevo Board over who owns what property and owes what money to go to a judge to decide.
"If trying to talk to (the Rio Nuevo Board) about putting $1 million into the TCC generates a new $25 million notice of claim," said City Attorney Mike Rankin, "I think my responsibility is to tell the mayor and council that there is no reason to spend time in mediation."
Rankin said his next step will be to advise Rio Nuevo that the mediation is off, "and that any offers that we had put on the table are no longer on the table. And we'll let the litigation play out."
Last October, the district filed a notice of default against the city, contending the city failed to make improvements to the TCC, but it has not yet gone to court to enforce that notice. Rankin said the claim is based on a misrepresentation of the facts.
The city and the Rio Nuevo Board seemed to be working things out and were considering putting $1 million each into urgently needed improvements at the TCC, but could never agree on details of the plan.
Rio Nuevo District Chairwoman Jodi Bain said the city continues to be in default on its TCC lease agreement, and the notice of claim was necessary to protect the district due to a statutory requirement.
"If you don't issue it with a very fixed dollar amount, you lose the right to do it potentially," Bain said. "But this is not a lawsuit. This is to presume the right to follow through with the 2011 default."
Bain said she doesn't believe the district will decide to move forward with a lawsuit in the near future, but it is a possibility.
Rankin said the dispute arose from the city having "been engaged in discussions with them that if we were going to spend money on the TCC, what would make sense. So we identified capital investments up to $40 million that could be invested in it."
Rankin said the list was intended to show possible improvements at the TCC, but the district interpreted the results differently.
"So they used that list and turned around and said: 'Look at these needs. You are not maintaining the building properly, and that's your responsibility,' " he said. " 'And therefore you are in default.' "
Although the two sides agreed to mediate the dispute, the mediation only exacerbated the problems as both sides accused the other of negotiating in bad faith and withholding information, a situation that Bain hoped would have ended when a new city administration took charge.
Bain said she would like to sit down with city officials in a public forum so all the issues over the years can come to light, but she isn't certain the city can set politics aside. "I am told, in some respects, that the new administration in the city is so partisan Democrat that they are going to say 'kiss off' to the Republicans.
"But this should not be, in my personal opinion, about Democrats, Republicans or aliens. I think partisan politics need to be set aside, consistently, and understand that we are here for a greater purpose, and it's about the greater community."
Mayor Jonathan Rothschild said the city has been working on constructive ways to find a solution, and from his perspective, the issue is purely nonpartisan.
"I can advise you that people of all political parties, Democrat, Republican, independent, are upset with the current behavior of the Rio Nuevo Board," he said. "It doesn't have anything to do with politics. It has to do with being sued for $72 million, and from all our examinations we find it to be frivolous."
Despite the dispute, both sides said they remained optimistic the issue can be resolved before it heads to court.
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Contact reporter Darren DaRonco at firstname.lastname@example.org or 573-4243.