Construction activity on the site of the future Caterpillar Inc. building near downtown has been authorized after a brief pause to negotiate lease terms.

The Rio Nuevo Multipurpose Facilities District board on Monday voted unanimously to issue a site mobilization notice to proceed.

While the lease between Rio Nuevo and Caterpillar is yet to be signed, Rio Nuevo attorney Mark Collins told the board assurances are now in place that the lease will be signed without material changes to the draft presented at Monday’s meeting.

Caterpillar’s Surface Mining & Technology Division, with Caterpillar Corp. as a guarantor, will enter into a 25-year lease with a guaranteed interest rate of no more than three percent for the first 10 years.

The draft lease also asks Rio Nuevo to take necessary action for Caterpillar to qualify for the Government Property Lease Excise Tax, or GPLET. Rio Nuevo cannot guarantee that, since it must be voted on by the City Council.

Chairman Fletcher McCusker, however, pointed out that there is no reason the city would not approve the GPLET since it gets no revenue from the site now.

“In my opinion, there’s no way… they can deny it,” he said.

Application for the GPLET requires a signed lease and a delivery date of March 1, 2019 as part of the deal.

Collins said he expected a final lease to be available for signature by the board’s next meeting.

Rio Nuevo had agreed to secure $43 million to construct the office building, west of Interstate 10 and Cushing Street, and lease the property to Caterpillar.

Workers will begin digging up a landfill at the site and transporting the material to the Los Reales landfill later this month.

Last year Caterpillar announced it would move its Surface Mining & Technology Division to Tucson with more than 600 executive jobs over the next five years.

Employees who have already made the move are temporarily housed in a county-owned building at 97 E. Congress St. while the new headquarters is being built.

Contact reporter Gabriela Rico at