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Hein’s firing puts future of Rio Nuevo funds in limbo, lawmakers say

2 Tucson legislators say financing in peril, but that shift in control could help

This site west of Interstate 10 is the proposed location of several Rio Nuevo projects planned to help revitalize downtown.

This site west of Interstate 10 is the proposed location of several Rio Nuevo projects planned to help revitalize downtown.

City Manager Mike Hein’s dismissal could sink Rio Nuevo’s tax increment financing unless Rio Nuevo is taken out of the city’s hands, three Tucson legislators said.

State Sen. Jonathan Paton, a Republican, said the Senate Appropriations Committee is working with a single option: permanently repealing state general fund contributions to Rio Nuevo, except for debt service, which largely involves the $80 million bond issued in December.

“I think it’s going to make our job a little harder at the Legislature,” Paton said about Hein’s firing. “The only way I can see this going forward is if (Rio Nuevo) is taken out of the city’s hands and put into another entity.”

State Rep. Steve Farley, a Tucson Democrat, thinks Hein’s firing could help salvage Rio Nuevo.

“I think this could be a positive step forward,” Farley said. “The Rio Nuevo board could reassert its control of the district. You could have the board go with an outside project manager with expertise in such projects.”

The Rio Nuevo Multipurpose Facilities District is under the jurisdiction of a four-member board that includes chairwoman Anne-Marie Russell, executive director of the Museum of Contemporary Art; Jeff DiGregorio, owner of the Royal Elizabeth Bed & Breakfast; Roman Soltero, principal of Tully Elementary Magnet School; and Dan Eckstrom, a former Pima County supervisor.

The board has statutory authority to make all decisions for the district, but the board entered into an intergovernmental agreement with the city in 1999 through which the city manager serves as Rio Nuevo’s executive director and the city finance director serves as treasurer, City Attorney Mike Rankin said.

Rankin said both the Rio Nuevo board and the city would have to concur to end the agreement. The Rio Nuevo board had rarely met in the past two years before new board members were installed last year.

Farley said some legislators are proposing having the Legislature take charge of Rio Nuevo, but he doesn’t think that has a lot of support. State Rep. Frank Antenori, a Tucson Republican, said firing Hein will affect Rio Nuevo funding dramatically.

“You don’t give money to a ship adrift at sea without a captain,” Antenori said. “The (legislative) leadership will have a hard time sending money down there to Tucson.”

Antenori has been a vocal critic of Rio Nuevo, but he criticized the City Council’s abrupt decision to dismiss the city manager.

“It was a huge error on the City Council’s part to do that,” Antenori said. “It probably has jeopardized any effort to save the TIF revenue.”

Three years ago, Hein asked Rio Nuevo director Greg Shelko to report directly to him after the departure of Assistant City Manager Karen Thoreson, who had responsibility for Rio Nuevo. There will be no immediate change in the hierarchy, interim City Manager Mike Letcher said.

“Our structure hasn’t changed at all,” Letcher said. “People will report to me as they were reporting to Mike.”

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