Local opinion: Rio Nuevo supports more than 100 local small businesses

Recently, Michael Chihak provided a guest opinion to the Arizona Daily Star entitled “Rio Nuevo Needs to Rethink a Distorted Vision”

His column was in response to the recent dust-up about Live Nation’s desire to bring their new comedy club to Tucson and invest millions of their dollars with about 25% funding help from Rio Nuevo. The rumors that two cherished local operators were being evicted somehow by Rio Nuevo created a viral moment.

The Punchline Comedy Club, owned by Live Nation, has very popular and successful locations in Houston and San Francisco and selected Tucson as the most desirable location in the United States for a new club.

Indeed, we consider that a great story. The world’s largest entertainment company selected Tucson over dozens of other options. The reason they selected Tucson is due to the work we have done, along with our private sector partners, to make Tucson, Arizona, one of the most rapidly developing downtown areas in all of America.

We have accomplished that by supporting over 100 small, local businesses that have created an eclectic, walkable, dining and entertainment district. However, the biggest economic impact to downtown Tucson comes from large, out-of-town developers that have joined with our local operators to create a downtown that features a unique mix of historic properties mixed with new developments, all attached to a modern streetcar line, making Tucson one of the top rated TIFs in the United States, according to the Arizona Auditor General.

Mr. Chihak reacted, a little too early, to the social media frenzy about the evil Live Nation and Rio Nuevo running out local brewery Borderlands and children’s activity center, Playformance. First and foremost, Rio Nuevo does not get involved in landlord/tenant negotiations or relationships. We will support any development in our geography that increases the sales tax base, our statutory mandate.

We recently gave the Borderlands team almost $400,000 to enable the newly opened Sonoran Moonshine downtown but we remained concerned about the financial viability of the brewery, which stopped brewing beer some time ago. Rio Nuevo also paid for the food truck you see at the Borderlands location to help them increase traffic, but Borderlands had informed their stakeholders they can’t survive. Playformance was given their space temporarily after their location burned down. The Borderlands lease subsidizes Playformance. If/when Borderlands fails the building is likely to sit vacant. Rio Nuevo has told both tenants if they are moving that we would help them, or in Borderlands’ case, help them focus on their other downtown location. Live Nation completing their deal with Peach Properties is a long way from being done. No one got evicted or ran off.

Chihak mentions that maybe we gave a little money to small businesses but favor big businesses. Easy to fact check, every transaction we do is posted and audited by the Arizona Auditor General. Let’s do that math.

Ten years ago, the Rio Nuevo tax base was about $9 million a year. Today that is approaching $1.6 million a month, more than double. We plow all that money back into the development of our downtown area and now, east, along Broadway. Our local projects include the $76 million renovation of the Tucson Convention Center and approximately $58 million into local businesses including:

The MSA Annex (container village with 14 small and local businesses including Decibel Coffee, Kukai, Westbound, Avenue Boutique, Mesa, Why I Love Where I Live, Turntable, Now or Never, Transit Cycles, Luca Ryann and Beaut Burger), the Hexagon Headquarters Building with Hee Mee and The Monica at ground level, The Saint Augustine Cathedral and Marist College remodel, the Hub and Playground, the Monier (apartments and 13 local, small shops at ground level, The Century Room, the National, Wooden Tooth Records, BATA (a USA today top 50 restaurant), Batch Whiskey and Donuts, Reilly Craft Pizza, The Kava Den, Tabu Restaurant, Zemam’s and Z Street, Sonoran Moonshine, The Grand Event Center, Crescent Smoke Shop remodel, Highwire, Basqueria, La Estrella Bakery, Miss Saigon, The Fox Theatre block, Roadrunner Coffee, Chela’s, The Children’s Museum expansion, the Sosa Carrillo House remodel, Ceres and the El Presidio Activation, Treasury 1929 with Danny Scordato, the Bautista (apartments and 16,000 SF of retail), De Novo, Herbert’s Deli, Vertigo Wines at the Depot, 123 Stone with Charlie Levy, the Sol Plaza with 16 local shops including Studio Hair Salon, The Broadway, Quisty’s, Caps and Corks and Rocco’s, the Friedman Block (coming soon, 16 local shops and restaurants), the former Country Home block (coming soon, bar, entertainment, restaurant). If I did not miss anything that is over 100 locally owned and operated small businesses that would not exist “but for” Rio Nuevo. Oh yeah, a couple of chains: Le Macaron, Cornish Pasty and Starbucks.

The dreaded out-of-town developers make up our largest tax-producing projects: the AC Marriott, the Doubletree and El Mezquite Restaurant, the Hilton and Hampton Inns, the Leo Kent Hotel and restaurant and The Corbett. However, Rio Nuevo invested only about $20 million in total for those “big business” projects, a third of what we have invested in locally owned small businesses. Our private sector partners have invested almost $160 million in the same five projects. All this activity represents over $700 million of private sector investment. Without projects on this scale, we could not afford to help so many local operators.

As a result, we are Travel and Leisure’s number 2 food destination in the US, (that is not a typo), North America’s first City of Gastronomy, the 7th ranked music city in the US and a top five American street. Conde Nast recently designated downtown and the surrounding barrios as the best place to visit in the US.

On our upcoming agenda are two new hotels, new apartments, new restaurants, ongoing grants for small business startups, a million dollars a year in support for downtown festivals and events, along with several new Rio Nuevo sponsored murals. Twelve years ago, we set out to establish a food and music zone, not a retail zone, and the State has extended us to 2035 because of that success.

If Live Nation ends up dealing with Peach Properties, we will help them. We have also offered to help the current tenants.