Rio Nuevo is prepared to give businessman Ray Flores a $250,000 loan to help him reopen three downtown businesses.

In a unanimous vote Tuesday, the board of the downtown revitalization district backed in concept a loan to Flores, the president of a company that owns El Charro Café, Sir Veza’s Taco Garage and several other restaurants, to buy out three long-term leases for street-front locations on East Congress Street.

The board authorized district officials to negotiate and finalize the loan to Flores. The loan would be repaid with interest and secured with assets and a guarantee.

Two of the venues are nightclubs known as Zen Rock, at 121 E. Congress, and H20 Discotec, at 61 E. Congress. Both clubs are no longer open on a regular basis, Flores said.

A third venue, known as the Betty Gay Space, at 125 E. Congress, has not been open for several years and needs significant renovations before it can be reopened.

It is likely the two clubs would be reopened under new names and the third location would be a retail space.

Flores said if a deal with the current owner of the leases associated with the three properties can be reached — the six-figure deal is still being negotiated — he would bring in new concepts for the three aging spaces.

Backed by his family’s various restaurant businesses and a commercial kitchen the company operates near downtown, Flores said the two clubs would be expanded and could serve almost any type of food for lunch and dinner. Both have active liquor licenses.

Rio Nuevo board member Edmund Marquez favored the deal, saying he didn’t believe the lenders would not be willing to back a loan for such a venture.

The Flores family has a long culinary history in Tucson, opening its first El Charro Café in 1922.

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Fletcher McCusker, Rio Nuevo board chairman, said the loan made good sense for the district, noting its mandate is to increase sales taxes in the downtown area.

Figures released by Flores show sales taxes from the three locations have declined from roughly $133,000 in 2014 to about $51,000 in 2016.

Flores told the Rio Nuevo board that he hopes to reopen two of the businesses by the end of the year.

By the end of 2018, he estimated that the three businesses could generate a total of $215,000 in sales-tax revenues — based on $2.5 million in sales.

In addition to the loan, Flores is planning to make a $250,000 initial investment as well as pay for building improvements needed for the three locations.

Contact reporter Joe Ferguson at or 573-4197. On Twitter: @JoeFerguson


Joe has been with the Star for six years. He covers politics as well as the city of Tucson and other municipalities in Southern Arizona. He graduated from the UA and previously worked for the Arizona Daily Sun.