Rio Nuevo has $725,000 left to spend this year, CFO says, as board backs $355,000 Congress Street club

Rio Nuevo has $725,000 left to spend this year, CFO says, as board backs $355,000 Congress Street club

TUCSON, Ariz. — The Rio Nuevo Multipurpose Facilities District has about $725,000 left to commit over the next 12 months after $22 million in project promises, its chief financial officer told the board Sept. 22, minutes before members approved $355,368 for a restaurant, club and speakeasy at 121 E. Congress St. on a roll-call vote with no member opposed.

District CFO Daniel Meyers said Rio Nuevo closed the last fiscal year down $2,880,000 from the prior year and is running 15% below 2025 collections, a level he said "really goes back to pre-COVID numbers." "You talk to people around town in the district. I've talked to several restaurateurs. They're telling me they're down 20%," he said.

Meyers said the district had about $1,900,000 in operating accounts at the end of August, roughly $700,000 of it restricted for a debt service payment. Adding a late June TIF payment of about $1,400,000 and projected proceeds of roughly $3,200,000 over the coming year, he put available cash at about $5,800,000. Against that, the district carries $22 million in commitments, of which $6,500,000 has been paid, leaving about $14,500,000 outstanding — roughly $10,400,000 of it falling beyond the next 12 months. That leaves about $725,000 to spend over the next year, he said.

The state's estimate for July TIF revenue came in at about $1,600,000, Meyers said, but he attributed part of the bump to delinquent taxpayers catching up and recommended the board keep budgeting on $1,400,000 a month until collections show a sustained upward trend. He also said the district's bank has given a verbal commitment to finance projects, and that he intends to ask the bank to cover the $500,000 Friedman Block grant approved last month, freeing that cash. A board member noted the district is spending almost $12,000,000 on two new downtown hotels, much of it deferred.

Chairman Fletcher McCusker closed the meeting on a more hopeful note, saying the district is "doing a lot better in October than I thought" and has "picked up almost a million dollars" relative to a few months ago, when monthly collections had dropped into the $1.2 million range. If monthly collections hold near $1.6 million, he said, "we're gonna be fine." He said the board will approach elected officials after the election about the district's retail slump and the debt load it has carried since taking over from the original board.

The 121 E. Congress project, in the former Zen Rock nightclub space, is being developed by Eleven Eleven Tucson LLC, which presented the concept as a discussion item on Aug. 25. Managing partner Fernando Minjarez told the board the concept was unchanged and that the request had been reduced to half the remaining project balance of $710,736. The board approved $177,684 in cash, payable when the work is completed, plus a sales tax equivalent of $177,684, and authorized legal counsel to document and finalize the agreements. Minjarez said the numbers came from a hard contractor bid and that the owners' share would be funded from an inheritance received by one partner, not from a lender. District counsel reminded the developers that Rio Nuevo's money is typically the last in.

The board took no action, as scheduled, on a request from the owner of 141 S. Stone Ave., the Hampton Inn and Home2 Suites building across from the Catholic diocese, who asked Rio Nuevo to split the cost of building out a vacant ground-floor retail space for a mesquite furniture gallery, up to $200,000 total. Board member Jannie Cox objected that the request included $30,000 in architectural fees, which the district historically does not pay. Board member Corky Poster said the district's standing policy is to contribute up to 50% of hard construction costs attached to the building, excluding architecture and removable furnishings, and asked for a breakdown of an unexplained $6,000 in "other costs." The chairman told the developer to return with a hard contractor bid, potentially at the next meeting in two weeks, under the district's two-week wait between presentation and vote. The developer said the earlier buildout in the same building was approved at $200,000 against a $400,000 estimate but ultimately drew about $130,000.

On the 27-acre former city landfill at the base of A Mountain, the board took no vote but signaled it will authorize a Phase I environmental survey costing a little under $10,000 at its next meeting. The chairman said the district acquired the parcel in a 2013 land swap with then-Mayor Jonathan Rothschild without understanding its toxicity, and that remediating the adjacent Caterpillar site required dredging eight acres — 25,000 dump truck loads — at a cost of $1 million per acre. He said the district has abandoned commercial development of the site and has been approached by the Friends of Tucson's Birthplace, which operates Mission Garden, and a land trust affiliated with the Tohono O'odham Nation.

Poster said the land trust is the actual applicant for the Phase I survey, with other organizations supporting it, and that an appraisal commissioned about six months ago under the district's master plan valued the 27 acres at somewhere north of $300,000. Board member Mike Levin questioned whether a Phase I was worth $10,000 when contamination is already known, and asked whether the district should go straight to a Phase II. Poster said the appraisal specifically recommended a Phase I. A board member said a Phase II would likely follow at upwards of $50,000.

Levin also asked whether the district's self-imposed two-week wait should apply to its own property. Counsel said no legal hurdle barred immediate action but advised waiting, citing no time urgency and the public's right to raise concerns about how Rio Nuevo spends money even on land it owns. The chairman added that the item was agendized as discussion only and would have needed to be listed as an action item. Counsel said he would redline the survey proposal before the vote.

The board extended El Ritual's agreement to Nov. 30, 2026, on a voice vote with no opposition, after delays tied to the project's sauna; the owner said she hoped not to need all the time and invited the board to a mid-October celebration. The board also extended Empire Pizza's economic benefit agreement by one year, to Sept. 22, 2027, by voice vote with no opposition, after the city confirmed permits are being processed. Counsel said about $380,000 remains available to the owners under that agreement, subject to their finalized improvements.

On naming rights for the Tucson Convention Center, the chairman said Legends Global, the venue's new management company, has proposed to run the sponsorship solicitation, estimating the naming rights are worth up to $1 million a year, with Legends taking a 25% commission. The agenda describes the proposal as commission-based with a small monthly retainer. The board will vote in two weeks.

A representative of the district's public relations firm presented results of a stakeholder survey for the district's first executive director search. Of nearly 11,000 people contacted, close to 100 responded. She said more than eight in ten respondents reported downtown has significantly or somewhat improved over the past 10 to 15 years and 83% credited Rio Nuevo as a major or moderate catalyst, while 77.3% favored balancing large catalyst projects with targeted help for local independent merchants. Respondents ranked transparency and public accountability as the top leadership trait for the position — "nothing new there," the chairman said — followed by communication with the community, media and stakeholders. Economic development and urban revitalization ranked as the top desired background at 7.55 out of 10; 45% called prior Tucson or Southern Arizona experience very important and fewer than 10% said national experience alone mattered most. Open-ended responses raised public safety, the transit center, cleanliness and livability. The chairman said the report would be posted publicly and that applications would likely be solicited in October.

Responding to the survey's safety findings, McCusker said, "I would not consider downtown safe or unsafe, but it's an urban environment." He said the district has "increased our police presence dramatically" and its investment in Downtown Tucson Partnership security, and is working with the city and Tucson police on safety and with the partnership on alley cleanliness and lighting. The firm's representative added that the July mass shooting outside Empire Pizza had drawn attention to the district's public-safety spending and suggested telling that story more actively.

Also discussed:

• Counsel reported the Bungalow Block developer has met all milestones — five signed bungalow leases, including Barrio Bread and a coffee business, utility connections and one held event — and may exercise his option, but deed transfers on adjacent city-surplus parcels are stalled because Rio Nuevo does not yet hold title from the city. No action was taken.
• Six of the board's seven members attended; one member was excused. The chairman said he has had no word from the House speaker or Senate president on their vacant appointments and noted board members serve without terms at the pleasure of their appointing officers, a structure the district has asked the Legislature to change.

This report was drafted by Claude Opus 5 from a live transcript produced by Deepgram Nova-2, then reviewed and edited by Nicholas De Leon with Claude Fable 5.1, and published at 4:22 PM MST on September 22, 2026. Read more about how this is made.