Rio Nuevo’s history is as rocky as the Santa Cruz riverbed. Its unkept promises and over-reliance on sales tax are the primary reasons why I oppose carte blanche extension of the Rio Nuevo Tax Increment Financing District in its current form.
Rio Nuevo was created by voters in 1999. I was one of those voters. I remember promise of Rio Nuevo — the new river — the rebirth of Tucson’s birthplace on the banks of the Santa Cruz. Rio Nuevo would develop vacant land and re-create elements of Tucson’s early history.
The concept was to build the Tucson Origins Heritage Park, including the Mission Gardens, Convento, San Agustin Mission Chapel, Carrillo House, Granary and village of S-cuk Son. Like the Desert Museum, Tucsonans envisioned the Origins Park to be an educational and cultural experience, a destination for family vacations, and a source for tourist dollars.
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As Rio Nuevo evolved, other proposals were touted — like building an arena football stadium and constructing the now infamous rainbow bridge.
Under city control, inaction was Rio Nuevo’s legacy. The Origins Park was never completed. After 10 years, all we had were plans, debt and some infrastructure. In 2009, the Arizona Legislature took control of Rio Nuevo and development in Tucson’s core.
Under state oversight, the newly reconstituted Rio Nuevo board parlayed multiple real estate development deals to increase sales tax revenue by building hotels, office buildings and restaurants downtown.
Rio Nuevo boosters point to the gleaming new structures and say, “Look at how Tucson has been transformed!” Yes, downtown is spiffier and more corporate, but is subsidizing luxury hotels the best use of tax dollars in a city with a 25 percent poverty rate?
The basic premise behind Rio Nuevo is that if government gives away sales tax to foster commercial construction, that will generate more sales tax in the future. After nearly 20 years, what is our actual return on investment? In a recent Tucson talk, author and historian John Nichols said that economic development should focus on building the economy of the future and not focus on perpetuating the economy of today. Focusing solely on retail sales tax revenue as an economic development driver is living in the past. It’s so 1999.
Back then, consumers clipped coupons, drove to the store and fought the crowds for bargains. Today, brick and mortar retail is faltering. As online shopping increases, it is clear that Rio Nuevo is banking its future on a dwindling revenue source.
State and city tax and land incentives are at work in downtown Tucson. Rio Nuevo’s City Park project is estimated to create 120 construction jobs, 90 restaurant/entertainment jobs, and 105 office jobs once tenants fill the upper floors. City Park is getting funds from Rio Nuevo and from the city’s GPLET tax-abatement program. How much are we paying for these jobs?
Economic development in Tucson is not on a sustainable path. Instead of subsidizing developers, Tucson should focus on growing our local small businesses. Luring big corporations away from other cities by giving away taxes and/or land is a race to the bottom.
Tucson could be the Athens of the West, instead of the Dusty Pueblo, if we played to our strengths as a center for the arts, music, culture, food and science.
If the Legislature renews Rio Nuevo to 2035, as proposed in HB 2456, it shouldn’t be allowed to continue with business as usual. Tucsonans deserve a voice in our town’s future, and in my opinion, Rio Nuevo should commit to building what we voted for in 1999.
Rep. Pamela Powers Hannley represents Tucson’s Legislative District 9 in the Arizona House. She is a member of the House Banking and Insurance Committee.