The city and Rio Nuevo are close to a deal that would have both entities put $1 million each into the dilapidated Tucson Convention Center.
But the deal isn't finalized yet because the city objects to the Rio Nuevo Board putting a provision in the agreement requiring the city and Rio Nuevo to hold discussions with neighboring landowners about developing the area in a coordinated way.
The two landowners in question are Allan Norville, who owns land in between the TCC and property to the west where an arena was once planned, and potentially with Humberto Lopez, the owner of the Hotel Arizona. The more immediate focus of the agreement seemed to be involving Norville, however.
The Rio Nuevo-proposed language calls for including "without limitation" the former arena site on city-owned land along the Interstate 10 frontage road.
People are also reading…
The more immediate part of the agreement would have the city put up $1 million to fix the TCC's aging bleachers, and Rio Nuevo would put up $1 million to fix the restrooms.
On Tuesday, the council voted unanimously to approve that part of the agreement, but strike the language to have the parties engage in discussions with "essential third parties" and negotiating over the arena parcel.
The city also wanted other tweaks to the language, including a provision ensuring the city would not have new responsibilities under the Americans With Disabilities Act.
Councilwoman Regina Romero said the two sides already had agreed to the language of the deal, but then Rio Nuevo inserted new language into the agreement before approving it by a 5-0 vote last week.
Rio Nuevo Board members said the agreement was supposed to be a show of good faith in what has become an acrimonious and bitter dispute between the city and the new Rio Nuevo Board about who owns what properties downtown and which government owes the other money.
Board Chair Jodi Bain said the agreement was taken out of the mediation between the two parties in the hope the warring sides could start with an agreement "that's positive so we can trust each other."
"It is supposed to be the start of a positive relationship," she said.
The agreement was not changed "to my knowledge" Bain said, but she said she could not be sure.
She said she felt there was always language in the agreement to talk about working with interested parties.
Bain said she wasn't sure about the ramifications of striking the third-party language from the agreement, but she said there is a meeting with Norville this week.
She said the language in the agreement is more so the city and Rio Nuevo can try to coordinate the development with neighboring landowners so the area is not developed piecemeal.
Board member Alberto Moore said the two governments should be working together with landowners to ensure that the development in the area makes sense.
He said Rio Nuevo is not negotiating with Norville about developing the property, although he said Norville is clearly interested in developing the area.
The city was supposed to approve the agreement two weeks ago but delayed it. "The city didn't want this story out," Moore said.
In other business, the city challenged a Rio Nuevo Board audit that questioned $4.6 million worth of spending on the Depot Plaza Garage, which was built underneath the new Martin Luther King Jr. housing project near East Congress Street.
The forensic audit, done by Regier Carr & Monroe, said $4.2 million was not approved by the board or had minimal or no supporting documents to back up the spending.
City Finance Director Kelly Gottschalk said the auditor was not independent and made errors in its calculations. She said only about $50,000 of the spending was questionable, and contends the Rio Nuevo Board owes the city $2 million in unpaid bills on the garage.
Contact reporter Rob O'Dell at rodell@azstarnet.com or 807-8465.
