Earlier this year, Governor Doug Ducey signed into law a 10-year extension for the Rio Nuevo Multipurpose Taxing District, which will allow it to operate until 2035. The extension will allow Rio Nuevo to take on future projects over the next few years such as the proposed 20-story office tower in Downtown Tucson and the redevelopment of some of the city’s historic structures along East Broadway between Park Avenue and Country Club Road. 

Rio Nuevo, which is a tax increment financing district administered by the state, receives approximately $12 to $15 million dollars a year in locally generated state tax dollars. The rejuvenation district was first envisioned by Arizona state legislators and approved by Arizona voters in 1999. Though the design was to retain existing businesses as well as to channel funding toward the improvements of distressed, underdeveloped, or underutilized parts of a jurisdiction where development might otherwise not occur, the plan failed prior to 2010. Lack of accountability and poor management lead to a storied history of $230 million spent with little to show for it. 

But the current board has learned from its predecessors and is now celebrating the approval of a 10-year extension, allowing them enough time to finish projects in the works as well as devise an exit plan to ensure that Rio Nuevo tenants eventually have the option to buy the land their business is located on. With a clear exit strategy as well as a promise to present projects to a joint committee of both the state Senate and the House, the board is attempting to show how downtown rejuvenation can be conducted responsibly. 

Per a press release from Rio Nuevo, along with the extension, the board also took the the necessary actions to finalize a $34-million, mixed-use project at 44 East Broadway, which includes the renovation of 26,120 square feet of office and retail space in an existing building and 79,477 square feet of office and retail space in two new buildings to be constructed on a nearby vacant parking lot. 

Courtesy of Rio Nuevo

The extension has also paved the way for the board to take charge of approximately 40 properties along Broadway. Board Chairman Fletcher McCusker, says that the properties that they will be rehabbing will hopefully become retail spaces. But he doesn’t want to stop there. Looking into the future, and even when current projects have been completed, he foresees using the remainder of the extension to do more good in the blighted areas of Downtown Tucson, noting “anything…vacant is in our target.”

McCusker also said of the new 10-year extension that he estimated Rio Nuevo would receive an additional $150 million in sales tax revenue returned by the state over the additional 10 years. In addition, through their track record of attracting private partners and leveraging the district’s investment with private dollars, “we could be stewards of something like $1 billion.” 

Prior successes of the board can also be seen in their ability to contract a 25-year lease with the new headquarters for Caterpillar, the world's leading manufacturer of construction and mining equipment, which the company will pay a guaranteed interest rate of no more than three percent for the first 10 years to Rio Nuevo. The new headquarters will also provide more than 600 executive jobs over the next five years, making this part of the city a more vibrant spot for new job seekers and other companies.

Another project is The Mercado San Agustin Annex, which is a series of retrofitted shipping containers turned into a village for businesses. The project is a $12 million expansion of the vibrant Mercado San Agustín Public Market. The 31,755-square-foot, mixed-used space will incorporate 38 modified shipping containers west of downtown and feature restaurants, bars, a retail mall, a 500-seat outdoor entertainment center, and a festival venue.