The Rio Nuevo Board has released a legal opinion issued by legislative counsel and forwarded to Senate President Steve Pierce that was requested by Rio Nuevo in an effort to clarify the authority of the District to invest in projects other than the convention center and convention center hotel. The 2009 legislation required that the Rio Nuevo board issue a Notice to Proceed on a hotel and convention center project before spending any public monies on anything else other than day to day expenses.
Such a Notice was issued and amended in October of 2010, although the project was never initiated. The drafters of the legislation have reviewed the notice and minutes and have concluded the a proper notice was issued in October 2010 ( see attached opinion).
“We are grateful that legislative counsel has responded so quickly and are consulting with our attorneys on how this opinion should be incorporated into Rio Nuevo planning for future projects”, said Fletcher McCusker Rio Nuevo Chairman.
“While the opinion supports flexibility in the go forward authority of the District we know that we cannot act unilaterally. The city is required to match Rio Nuevo funds and, by law, has to agree on any and all Rio Nuevo projects. This opinion also doesn’t change our economic development priorities: The TCC, a headquarters hotel and initiating projects on the Westside.”, McCusker added. “Furthermore the Rio Nuevo board has committed significant financial and auditing resources to a forensic examination of the district’s expenses during the time it was city controlled and that remains our primary focus,” McCusker concluded.
Last week, the new Rio Nuevo Board voted to go forward with the purchase of an option on the Manning House. The step was taken, in part to force a legal decision on the matter of the District’s operating parameters.
The entrepreneurs on the Board, Fletcher McCusker and Alberto Moore, believed that the Manning property could lure hoteliers and other business interests into the area.
The District Board will take up in next meeting Thursday. According to McCusker, “Rio is not capable of that kind of project by ourselves, look at the Mansion on Turtle Creek in Dallas as an example, a Rosewood 5 star hotel that started out as a mansion. We will be looking for partners, our primary objective was to stop the sale of valuable assets ( which just our showing of interest did, Colleen canceled the equipment sale, did have a garage sale) and then stop the foreclosure. The option idea would do that but it has created an undue amount of controversy and debate and the Manning is not our primary focus, the TCC is, headquarters hotel is and Prop 400 projects are. This property, however, could become the headquarters hotel.”
The City had wanted the District to pay for repairs to the TCC. Those bills are legally the responsibility of the City.
Some want the District to be completely shut down, leaving the taxpayers with a bill, and the City off the hook. Kozachik wanted the District shut down altogether and replace it with a City-controlled taxing district of some kind.
Appearing on a local radio show yesterday, Kozachik claimed that he tried to get the District under Bain to spend bond money on TCC and they refused; now he says they have missed the opportunity and the money must be spent on bond service. Kozachik complained that the District made cosmetic improvements” to the TCC but did not make repairs which are the contractual obligation of the city.
When pressed Kozachik acknowledge that the repairs are the responsibilities of the City, but did not tell the public that the City failed to approve the Bain/Grinnell board’s unanimous decision to spend $1 million rehabbing the TCC bathrooms in a collaborative memorandum with the City.
General Counsel Greg Jernigan’s opinion:
At a meeting on October 10, 2010, the board of directors of the Rio Nuevo Multipurpose Facilities District adopted the following motion:
The Rio Nuevo Multipurpose Facilities District hereby issues a notice to proceed to the City of Tucson that will be good for 90 days pursuant to ARS 48-2404(B) on a proposed hotel convention center and garage project with the following parameters . . . .[1]
The motion then set out thirteen requirements for the project. At its meeting on October 20, 2010, the Board revised the notice to proceed by adopting changes to some of the thirteen requirements. The City of Tucson apparently later rejected the project.
QUESTION
Did the Board’s actions comply with Arizona Revised Statutes (A.R.S.) section 48-4204, subsection B?
ANSWER
The Board’s actions appear to have met the statutory requirement that it issue a notice to proceed for a hotel and convention center located on the multipurpose facility site before allowing the expanded use of tax monies generated in the district.
DISCUSSION
A multipurpose facility district is a type of county stadium district that is formed pursuant to and governed by A.R.S. title 48, chapter 26. If approved by the voters, a multipurpose facility district may levy a transaction privilege tax or other taxes or charges as specified in statute. A.R.S. section 48-4237. Revenues generated by these taxes and charges may only be used for the components of a multipurpose facility that are owned by the district or that are publicly owned. These monies may only be used for four purposes specified in statute “until a notice to proceed is issued for a hotel and convention center located on the multipurpose facility site”. A.R.S. section 48-2404, subsection B.
Language in a statute is given its ordinary meaning unless it appears from the context or otherwise that a different meaning is intended. Southern Pacific Company v. Maricopa County, 56 Ariz. 247 (1940). The statutes do not prescribe any special meaning to the condition for expanded use of the tax and charge monies, so the language must be given its ordinary meaning.
The Board clearly intended to comply with the notice requirement or A.R.S. section 48-2404, subsection B, because the language of the motion mirrors the statutory language. By the original and the revised motions, the Board did issue a notice to proceed for a hotel and convention center on the multipurpose facility site.
The fact that the notice was good for only 90 days does not negate the fact that the notice was issued. The statute does not specify any particular requirements or limitations in the notice. Also, nothing in the notice indicates that it was not given in good faith.
The statute does not require that the hotel and convention center project be started or completed for the expanded use of the tax and charge monies to come into effect. Therefore, the fact that the City of Tucson rejected the notice does not negate the effect of the notice.
CONCLUSION
The Board is not limited to using the tax and charge monies to the four purposes specified by statute, because it has issued a notice to proceed for a hotel and convention center project. The Board may use these monies for any costs of the components of the multipurpose facility that are owned by the district or that are publicly owned.
At the time voters approved the Rio Nuevo District, they were promised a multi faceted project, including cultural and recreational amenities, historic recreation, new and expanded museums and mixed use developments.
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