Meet Me Downtown

A largely-dead block on the north side of Congress Street continues to show signs of new life with the imminent opening of A Steak in the Neighborhood.   The new restaurant is to open this Friday, and preparations for the opening moved forward on Tuesday with the installation of signage over the tile facade. 

Owner Luke Cusack opened the Zen Rock nightclub earlier this year, three doors west of the new steak restaurant, which is his first Downtown restaurant venture.  Just west of A Steak in the Neighborhood, The Screening Room renovated its facade and installed a marquee, which was lit on October 30. 

The space at 135 E. Congress now occupied by the restaurant has been a gallery, salad bar restaurant, and a playhouse over the last ten years.

Cusack is opening another bar, Sapphire, one block west of Steak, at 61 E. Congress Street, in the former Heart Five space.  Sapphire may open in December.

With the polls closing less than 48 hours from now, here are seventeen suggestions—in no particular order—I have for the Tucson City Council, with respect to Downtown Tucson:

1. Do an audit of Rio Nuevo.  Don’t wait for the State to do it.  Get all the skeletons out of the closet. 

2. Stop tolerating the insider favoritism that’s run rampant.

3. Put more funding into the Façade Program.  A relatively small investment in fixing up old buildings makes a big difference in downtown’s image and in facilitating vibrant downtown activity.  Façade improvements provide a big bang for the buck.  Allocate some TIF funding to the Façade Program.  The lawyers have said it’s okay, I know they have!

4. Support the existing businesses that have toughed it out through the hard times.  A well-known community leader said to me, when the Downtown Tucson Partnership was forming in 2007, that he didn’t want anyone involved in Downtown up until that time, including businesses, to be part of the new regime.  That is so wrong-headed on so many levels.  Existing businesses should not be displaced to make room for new businesses if at all possible (especially not seven of them at a time!).

5. Get out of the entertainment business.  Stop messing with the Rialto Theatre and running the Fox Theatre.  The Rialto is doing just fine, and stop pretending that everything is headed in the right direction at the Fox.  Renegotiate the Fox’s loan and insist the Fox Theatre Foundation board add some new members dedicated to fundraising, and encourage the board to operate independently.  Let the Foundation hire its own director and other staff.

6. Discourage the further demolition of historically significant buildings and older buildings with character.  Encourage new construction on empty lots and surface parking.

7. Focus energy and resources on saving the Gem Shows.  Suck up to the Gem organizations as much as needed, although the time for sucking up without action has passed. Which leads right into . . .

8. Build a more affordable, more realistically-scaled convention hotel that won’t put the City’s finances at risk. 

9. Hit the reset button on a master plan.  What can still be done with the remaining 15 years of TIF? What projects do Tucson citizens consider important? What projects from the original master plan are critical and must be given top priority, and which ones should only be done if there is an unexpected windfall?  Communicate this plan to the public.  Don’t spend additional money on the planning process, just engage the public, use the available information, and show leadership.  Tell us why you’ve decided to establish the priorities you have.

10. Support the development of some student housing—especially along Broadway (on empty lots!).  This will create demand for downtown businesses.  Perhaps the UA will elect to locate some academic programs downtown as well, once the Streetcar is operational.  Everyone says they are in favor of more downtown housing, and this is the most ready source of demand for residential space—college students.  This would also take pressure off the neighborhoods experiencing mini-dorm development.

11. Keep pushing forward on the Modern Streetcar.

12. Wash the sidewalks.  The BID maintenance crews are doing a good job of picking up litter and sweeping, but the sidewalks need to be power-washed too—badly. An entertainment district needs good security and attentive maintenance.

13. Stop blaming the Legislature for problems that we’ve created for ourselves here.

14. Stop acting out of desperation.

15. Get out of the real estate business, but have a fair and open process for disposing of city-owned property.  This is where there is great risk of approving insider deals.  Don’t give land away.  Downtown development requires that the banks see some comps.

16. Take positive action to implement prior commitments.  The Warehouse Arts District is one of those commitments.

17. Think and act “Urban”!  Be guided by urban principles, not suburban principles.

With a countdown from local newsman and former downtown resident Dan Marries,  the brand-new marquee at The Screening Room on Congress Street was lit up Friday night to the cheers of a crowd of a couple hundred celebrants who filled the north lane of Congress.

The obligatory self-congratulatory build-up included on-stage recognition of people that made it happen, such as Michael Keith and architects Ibarra and Rosano, joyful appreciation from Arizona Media Arts Center denizens Giulio Scalinger and Claudia Jesperson, and political speeches.

After the new marquee was lit up, the Fox Theatre marquee–one block to the west, and the Rialto Theatre marquee–two blocks to the east, were turned on as well, in a symbolic reference to the fact that the three marquees have been installed and lighted just within the last several years.

Even as controversy envelops the property one block east of The Screening Room, the north side of the 6th Avenue to Scott Avenue block seems to be on its way back to vitality.  The Screening Room’s bright, but appropriately-scaled marquee, is the new visual anchor of that block, but it is flanked by the new Zen Rock nightclub, and the soon-to-open steak restaurant, A Steak in the Neighborhood.

That’s the parking lot that covers the entire city block bounded by Church, Council, Court, and Franklin in the El Presidio district. That’s the parking lot owned by the Downtown Development Corporation, charged more than twenty years ago with spurring downtown redevelopment and given property such as this one to achieve just that objective.

While I hadn’t parked there, and in fact, almost never do as a matter of principle, I strolled over to see how many patrons of El Charro and Old Town Artisans (which was hosting a concert in its patio), and how many guests at the wedding across Church Avenue at the Z Mansion, had been given tickets for not paying voluntarily. I could see about ten cars in the lot had tickets on their windshields, including a few on the east side of the lot, closest to the Z Mansion. Those cars closest to the Z had parked in “Permit Only” spots, leased most likely to attorneys or other office workers in the area to park during their weekday work hours.

There are a few issues here. One is, how much responsibility do these people bear for not paying their fee?  Some responsibility, of course;  however, the metered on-street parking on three sides of this block (which is owned by a quasi-public entity) is free after 5:00 and on the weekends, so it’s reasonable to assume that many of the people who park in the lot on a Friday night don’t realize that there is a fee for parking inside the area at that hour, since it is surrounded by free spaces.

The signage inside the lot announces that the numbered spaces must be paid for and that those not paying will be given a $25 ticket, but the message “No free parking at any time” gets lost at the bottom of a long list of verbiage.  

And, there are no lights in the parking lot that allow for easy reading of the signs, or encourage anyone to park there with a sense of security. In other words, they charge $5 to park in an unlighted lot. No amenities at all.

Moreover, the Church Avenue entrance to this lot, where the Z Mansion guests most likely would have entered, doesn’t lead into a place where the signage is obvious. Drivers entering here would most likely—and quite reasonably—conclude that the sea of empty Permit Only parking spaces are fair game during evening hours.

The larger issue is whether it makes sense, from a strategic standpoint, to aggressively enforce at a lot that serves one of the few islands of nighttime activity in Downtown—especially at a parking lot that was funded by taxpayer dollars, even if it is being operated by a quasi-governmental entity now.

Is Downtown so flush with customers that it can afford to annoy those who come down for a special event or dinner? Shouldn’t anyone associated with Downtown be encouraging visitors to enjoy themselves and return soon, rather than driving them away?

Just a few months ago, a flurry of parking tickets written to visitors to the Spring Street Fair on 4th Avenue produced a frustrated response from the Fourth Avenue Merchants Association to ParkWise, the agency that was the author of the tickets.  A few hundred guests had parked illegally near Catalina Park in West University Neighborhood; during the Street Fair, parking options are limited.   

Yes, the parking facilities must be paid for, but my experience working almost ten years at the Tucson Downtown Alliance has informed me that the number one public relations problem from which Downtown Tucson suffers is the perception of parking obstacles. Expensive and often unexpected tickets are a big part of that perception.  Get a ticket after enjoying a Downtown meal, and you may think twice about coming down again soon.   Parking tickets are bad for business, plain and simple.

I hesitate to write about these things because I don’t want to discourage people from visiting Downtown; however, in the case of the parking lot across from El Charro, visitors have safe alternatives to parking at that lot. There is abundant metered on-street parking in the area that is free after 5:00 pm and on weekends, and is quite legal. On the night in question, I parked at a meter along Council, just half a short block from El Charro. Another member of our party parked just a little further away, near Old Town. A shorter distance than you would walk if you parked outside one of the malls.

The DTDC/Rialto saga has taken another bizarre turn, as the developers of Downtown Tucson Development Company—Don Martin and Scott Stiteler—have demanded the payment of back rent for a small building on Broadway behind the Rialto Theatre used as a “green room” by visiting performers.  The amount of back rent that DTDC is demanding approaches $40,000.

Don Martin told the Arizona Daily Star’s Rob O’Dell last week, just days after the City Council voted to delay approval of the Development Agreement with DTDC, and DTDC said that it was pulling out of further negotiations, that he figured the deal he and his partner have offered the Rialto–$15 per square foot—is generous because it is only 75% of “fair market value” of $20/sq.ft. 

For a professional opinion on Martin’s estimate of fair market value, O’Dell sought the input of “Mr. Downtown”—Buzz Isaacson, who has put more downtown property under lease than anyone else in the last 25 years.  Now a first vice-president at CB Richard Ellis, Isaacson is quoted in last Tuesday’s article by O’Dell, saying that there is much variability in downtown retail rents. 

Isaacson said that antiquated retail space downtown can rent for as little as $8 or $9 a square foot, while lease rates for newer and more functional space can be $23-$25 per square foot.  Think Café Poca Cosa-type space on the upscale end.   Think “Downtown Wigs” on Broadway on the other end. 

Which end of the downtown retail spectrum do YOU think the Green Room is closer to, in terms of real market conditions–$8/sq.ft., or $23-$25/sq.ft.?

While the impact of the DTDC deal on the operations and sustainability of the Rialto Theatre has grabbed the headlines, other aspects of the deal deserve even more scrutiny and suggest important policy questions:

• Is offering free land to be developed at an unspecified time in the future the best way to incentivize current development?

• Is the value-for-value tradeoff realistic?  Is the City getting equal value to what it is giving away?  Is it important that the City get equal value?

• What assurance is there that DTDC will actually develop the properties it is being given—rather than sit on them indefinitely or flip them for a profit?

• Is there legal recourse for the City to take back the land it gives to the developers if they don’t perform in a reasonable period of time?   The last thing we need is a repeat of the Thrifty Block debacle. 

Late-Breaking Development!

In a Sunday afternoon email to his fellow Downtown Tucson Partnership Board members, attorney Michael Crawford, the president of the Rialto Theatre Foundation, asked that the DTP consider approving a resolution requesting the City of Tucson/Rio Nuevo to “attempt to purchase the 4,000 square feet the Theatre needs to perform its essential functions and if those discussions do not result in the purchase of the property or if during those discussions the owners of that property take action against the Theatre that threaten its existence, then the City should move for immediate condemnation of the property.”

This request will undoubtedly put the Partnership’s leadership group—Steve Lynn, Larry Hecker, and Glenn Lyons—in the awkward position of having to decide whether or not to honor Crawford’s request to ask the DTP board to either support the City’s intervention on behalf of the Rialto, a Rio Nuevo asset, or hold out hope that a development agreement with DTDC that might involve a resolution with the Rialto can still be salvaged.  The decision hits closer to home for DTP than just choosing between Doug Biggers, Michael Crawford, and the Rialto on the one hand, and Don Martin and Scott Stiteler on the other, however.

In effect, the decision to agendize this issue would force DTP to either support the Rialto’s position, or support the position of Council Member Nina Trasoff, which is essentially that the development agreement with DTDC as presented two weeks ago is fair and should have been approved.  Trasoff said subsequently that the Rialto Foundation was being “selfish” with its demands of DTDC. 

The awkwardness for DTP goes beyond not wishing to antagonize an elected official.  Trasoff is a non-voting member of the DTP Board of Directors and was one of the founders of the organization in 2007, and has close ties with incoming Board President Larry Hecker. 

My guess is that DTP CEO Glenn Lyons will be asked to broker some kind of deal. 

A familiar figure is the man behind the curtain this summer at the Fox Theatre, Fox Foundation Founder Herb Stratford. 

Stratford couldn’t stay away from his baby, the 1930 Southwest Art Deco treasure on Congress Street.  A year removed from active duty at the Fox, Stratford is volunteering for the Fox Tucson Theatre Foundation by programming and managing the Summer Classic Movie Series.

This Saturday is the second Saturday of the series, which runs through August 15.  It features children’s matinees at 1:00pm, and classics at 7:30pm for an older crowd.  This Saturday’s shows:  “The Wolf Dog” and “The Searchers”, starring Rin Tin Tin, Jr. and John Wayne, respectively.  The matinees are original serials, with each matinee showing four chapters of programs that last approximately 15 minutes each.

Interestingly, a quick look at the Fox’s website, www.FoxTucsonTheatre.org, reveals that the 4^th Annual Summer Classic Movie Series is the only action at the Fox all summer.  No shows are scheduled through August on any other day, so the six days each week not named “Saturday” are dark.  That’s it.  Nada.  Nothing else.  What a shame.

While Stratford is volunteering his time and effort, the Foundation is contracting with Tucson Convention Center staff for, uh . . . the other events??   I mean, TCC events?  

Perhaps the TCC staff is too busy with TCC activities to put much into the Fox? 

A look at the summer calendar at the Tucson Convention Center (www.ci.tucson.az.us/tcc/subpages/eventcalendar.htm) reveals a lineup of:

Festival de Danza at the Music Hall on June 21

Vicente Fernandez on July 11 (website does not specify the venue, but “Tickets on sale soon!” wherever it is)

2009 Custom Motorcycle Show, August 21-23

Please attend any or all of these three summer events at the TCC, and support one of the area restaurants before or after.  Cushing Street, Ascolese’s, El Minuto, Chris’ Café, Deb’s, Enoteca, and others are all within an easy walk. 

Anyway, back to the Fox Theatre.  Stratford has drawn from his experience of having programmed all four of the Fox Summer Film Series since the theatre reopened at the beginning of 2006.  He programmed the 2008 series before resigning in April of that year—in case that last statement confused anyone who knows that Jim Williams was the executive director during the summer of ’08 and for a few months thereafter.

But in addition to his duties of overseeing and planning the series as he did when he was the Foundation’s executive director, Stratford is managing this series from soup to nuts—or is that, from cleaning the bathrooms to changing the marquee?   He’s acting as House Manager, booking the shows, and doing the PR.  And clearly, doing his part to keep management costs down.

Stratford points out that the Fox was the place to be in the hot Tucson summers in the early days, as it was the only venue around with air-conditioning.  Film selection is tricky, since he tries to avoid competing in the art house niche filled by The Loft, contemporary films that have been overexposed, and Disney films, which are off-limits.  “I try to show films that were meant to be seen in a movie palace – films that directors created with the final screening venue in mind. Not like today where directors have to imagine their films on TV, cell phones and in tiny-screened multiplexes,” he explains.

Each year has had a theme, and Stratford says, “This year I went back to the ‘Best of’ lists for film and looked for films that I had not been able to show at the Fox before I left. I came up with 9 films that I wanted, that were classics, and were available. A theme emerged of  “Women, War & Westerns”. None of these films had ever shown during their original release at the Fox according to my records, so that is cool too.”

Up ahead:  Classic Serials, The Wolf Dog, The Undersea Kingdom, The Green Archer; Classic Movies, The African Queen, The Great Escape, It Happened One Night, The Misfits, Sunset Boulevard, The Bridge on the River Kwai, and Dr. Strangelove.

Tickets for the serials are $5, regardless of age, and $8 for the movies ($6 for seniors, students, and military), and while you enjoy a unique social experience in a gorgeously-restored venue, you may see ushers in period costume and learn a bit of history on the film delivered pre-screening. And as Stratford asserts, “Our popcorn is better.”  Stratford poses the challenge: “Try to find that experience anywhere else in Arizona.”

(Disclosure:  Herb Stratford has been my friend for about ten years.  One of my first meetings with Herb was inside the darkened, pigeon-putrified interior of the Fox Theatre, which we explored with flashlights.  That was several years before Herb’s perseverance led to the reopening of the theatre on New Year’s Eve 2005. 

You’ve probably noticed that Herb is a fellow TucsonCitizen.com blogger, under “Artistic Tucson”.  Since I’m sure he feels that covering the Fox would be self-serving of him, I decided to alert you all to the Classic Summer Film Series in his stead.)

Desperation. It’s not the proper mindset from which to make sound public policy, yet desperation seems to be the dynamic that is leading the Tucson City Council down a path that it may regret for years to come.

The City is desperate to make positive things happen in Downtown with Rio Nuevo. How much of that desperation is about concern for the upcoming election and how much is a desire to hold onto the TIF funding, I do not know.

The City Council seems set to approve a Development Agreement with the Downtown Tucson Development Company (DTDC), a partnership between Scott Stiteler and Don Martin. In exchange for free land, the City expects DTDC to make contributions to the Rialto Theatre, Warehouse Arts Management Organization, Skrappy’s, and possibly the Facade Improvement Program.

(My disclosure: As the former executive director of the Tucson Downtown Alliance and Downtown Tucson Partnership for several years, I know the properties and most of the characters very well. I don’t know Scott Stiteler, but I have been friendly with Don Martin for about five years. The Rialto Theatre Foundation’s executive director Doug Biggers and board president Michael Crawford are friends of mine. I used to be an active board member of WAMO, and more recently, an inactive board member of WAMO. I support the missions of both the Rialto and WAMO, and I support the City’s efforts to improve Tucson’s downtown.   I also wish Stiteler and Martin the best with the development of their properties, and I hope they make lots of money doing it.  Just not at taxpayer expense.)

The main element of this agreement is the giveaway of $4 million or more in City-owned real estate to DTDC, with contributions from DTDC to the Rialto Theatre, WAMO, and Skrappy’s that add up to far less than $4 million in real value. DTDC is a new company, formed after Martin bought out the interest of Doug Biggers in the 50/50 partnership of Biggers and Martin in the Rialto Block. Stiteler has been the man behind Williams and Dame Development, which left Tucson several months ago, just after their presence helped sell the first part of this deal to the City Council.

Last December, desperation led the City Council to approve the Pre-development Agreement for this deal, without proper due diligence, without proper consideration of the consequences, without proper public vetting. People were warned that they had to fall in line behind it, or else.

It was the same month when desperation led the Council to sell $80 million in Rio Nuevo bonds at the worst time imaginable in terms of financing costs, so they could tie up the TIF revenue stream before the state legislature could take the funding away. That act of desperation will cost the taxpayers of Tucson millions of dollars in excess interest.

Now, six months later, the City Council is up against a deadline it never should have faced; make a deal now with DTDC or pay up. Around $950,000 to reimburse DTDC for costs they’ve incurred. Wow, I know of developers who were induced to spend a lot more than that on projects they thought they were being awarded in Downtown Tucson, and they didn’t get reimbursed a nickel.

What happens if the deal goes through? Well, the City must pay DTDC $800,000 for the completion of the Concept Plan. The City pays (overpays) for that work either way. For perspective on that, consider that the entire Rio Nuevo Master Plan, adopted in 2001 with multiple consultants and lots of public outreach, cost the City $600,000!

The idea of giving away valuable real estate that fronts on Speedway, on Congress, and on Broadway should give all Tucson citizens pause. But when you consider how little is being required of the developer to provide, it is truly disturbing.

When you break it down, the developer is promising to invest in his own property, and to invest a little more in the theater, which obviously enhances the value of DTDC’s property. The developer is throwing a little money ($300,000) at Skrappy’s, the Downtown Façade Program, and the Warehouse Arts Management Organization (WAMO), and it has until 2014 to make all those payments.

In exchange, they get credits for $4 million in City real estate, which may be paid with the conveyance of the old Broadway Volvo site, the Congress frontage to the Ronstadt Transit Center, and part of the corner of Speedway and Stone. This after the same developer got a gonga deal on the Martin Luther King Apartments ($350,000) and also has air rights over the Depot Plaza garage to construct another residential building. And, the Rialto Block (the developer’s property) has been awarded one of four façade improvement grants from the City, for six figures. (More disclosure: I supported the Rialto Block’s façade grant award when I was on the selection committee at the Downtown Tucson Partnership last summer.)

Some property is being conveyed to the theater, but it holds nowhere near the value that makes this deal fair to both the City and the developer. And the developer is counting the construction of an elevator that the foundation does not want or need as a contribution to the theatre, in order to earn part of its credit.

Why is the City not protecting the viability of its own asset, the historic Rialto Theatre? This is the time to ensure its future, by requiring the developer to whom it is giving valuable downtown real estate, to convey all of the portions of property the developer already owns and that the theater needs, to the Rialto Theatre Foundation, which manages the theatre on behalf of Rio Nuevo.

The Rialto is one of a very short list of Rio Nuevo successes, yet the City acts as if it were a nuisance, and as if the City/Rio Nuevo doesn’t in fact own the building.

And of course, the City needs to get true dollar-for-dollar value on the deal overall. The contributions made by the developer need to have the same real value as the properties that the City is promising to give up.

Five years ago, desperation led the City Council to approve an ill-advised deal on the former Thrifty Block. Whoever won the competition for the rights to build on that site would get the land, cleared of the old buildings, and the Indian Village Trading Post building next door, for $100. Bourn Partners won that competition, and they worked diligently to make The Post condo project work. Whatever combination of factors (mostly the housing bubble bursting) led to that development not getting off the ground, the City failed to include a reversion clause in its sale and development agreement. Once the deed was transferred to Bourn, there was nothing the City could do. So now it sits, the empty land, and the empty building. Even the Indian Village shop has long since relocated to La Placita in expectation that the Hotel Arizona was going to be redeveloped next door—two years ago!

Ask a General Manager from a pro sports franchise: Sometimes the best deal you can make is the one you don’t make. Two years from now, we should be out of the recession and the modern streetcar will be almost ready to roll into Downtown. Developers will be lining up, looking to pay the City market value for those properties, especially the one in front of the Ronstadt Center.

The developer should already be properly incentivized to lease out his own space at One North Fifth and in the 200 E. Congress block. But with this deal, fully 40%, or $1.6 million in credits, is “earned” by the developer simply for leasing out space that he already owns.

Why let desperation to make something happen lead us to giving away the store?

Donovan Durband