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Tucson Partnership poised to absorb Downtown Development Corp.

Negotiations are nearing conclusion to fold the long-dormant Downtown Development Corp. into the Downtown Tucson Partnership in May.

In November, DDC in shed itself of the Lot 175 parking space across Court Avenue from El Charro Café, and a second nearby parking lot at Council Street and Stone Avenue.

The parking lots have been an enduring controversy since Doug Kennedy took charge of DDC in 1995 and made no effort to develop Lot 175, which many consider downtown’s prime remaining building-free lot.

Kennedy is transitioning out of DDC as its board of directors, with Kennedy as president, negotiate to have the downtown partnership serve as DDC’s executive director and also expand and appoint a new DDC board, DDC and partnership board member Larry Hecker said.

This is the resolution of a six-month transition designed to revive DDC’s development function and settle a 24-year dispute between DDC and Tucson Industrial Development Authority. DDC and IDA jointly bought the two parking lots in 1985, with IDA a 49 percent partner.

IDA ended its relationship with DDC with a Nov. 24 winding-up agreement that transferred full ownership of the parking lots to IDA. The Authority loaned DDC $907,000 in 1985 to partially fund the purchase of the parking lots, but that sum was never repaid, former IDA President Jaime Gutierrez said last year.

The agreement included a $50,000 DDC payment to IDA “to assist the Tucson IDA in carrying out its public purposes.”

Acquiring DDC would give the Downtown Tucson Partnership a separate development arm to go along with its marketing, maintenance and economic development functions, chief executive Glenn Lyons said.

May 6, the partnership board will consider acquiring DDC, and subsequently the DDC board would consider relinquishing its independence, he said.

Lyons said the move would create a strategic alliance with the partnership, DDC and IDA.

Hecker said the time has come to bury ancient animosity.

“Without characterizing past relationships, what we currently have is an opportunity to combine the resources of three organizations to provide real opportunity for downtown revitalization,” Hecker said.

The Downtown Tucson Partnership is a public-private nonprofit to promote, improve and revitalize downtown. The partnership was established in 2007 as a reorganized and expanded outgrowth of the Tucson Downtown Alliance.

The City Council established DDC in 1979 as a private nonprofit with an operating agreement with the city to develop wide swaths of downtown land on both sides of Interstate 10. Most notably, DDC developed the 400-unit La Entrada apartments and townhomes on Granada Avenue; several apartment complexes near St. Mary’s Road and Grande Avenue; and the initial development around Commerce Park Loop, but DDC has built nothing since the early 1990s.

Tucson IDA was established by the City Council, which appoints its board members, unlike DDC, which has had no formal relationship with the city for many years. IDA is a financing entity especially focused on affordable housing and downtown neighborhood and community development.

IDA in recent months has also undergone substantial transformation after having the same board members in place for 10 years. The council recently expanded the board from seven to nine members. Only four of the longtime board members remain, two of whom are likely to leave soon, said Gary Molenda, president of the Business Development Finance Corp., which serves as the administrative adviser to IDA.

The IDA board will have officer elections in June and after that will start considering how to possibly develop the two parking lots.

“The new board will develop a strategy for the properties,” Molenda said. “(Developing the property) was the concept behind the acquisition.”

IDA brought in PuebloParking Systems on April 1 to manage the lots. Pueblo manages two other downtown parking lots and one garage.

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