The Rio Nuevo District Board met yesterday to consider a counter offer from the City of Tucson in its ongoing settlement negotiations. The negotiations are a result of lawsuits filed by the newly reconstituted Board against the City after the City squandered over $230 million for pet projects and lining cronies’ pockets.
Prior to 2010 when the Arizona Legislature intervened and took over control, the City managed Rio Nuevo has essentially one of its own departments. It moved money around whenever and however it wanted to.
Two weeks ago, the newly reconstituted District Board had made what was considered a very generous offer to the City over a week ago, but the City refused a provision that called for binding arbitration. The District Board, tasked with development downtown, was trying to safeguard taxpayers’ monies that could be recovered as a result of audits of past projects in which the City misspent monies.
The City has done all it could to avoid responsibility for past bad actions. The City is still working feverishly from all angles to avoid legal and financial exposure.
The District Board chairman, Fletcher McCusker, after a lengthy Executive Session, initiated a Motion to instruct the District’s attorney to draft a counter offer to the City that would secure the properties involved including the TCC, Arena Parcel, depot Garage, and the Westside properties, as well as contract language that would force the City to matching funds for development projects. McCusker told the public at the hearing that “We have a resolution to the City of Tucson’s refusal to binding arbitration. Of paramount importance is that the City addresses the matching funds portion.”
For years the City used the funds provided by the Rio Nuevo taxing district to fund projects for which the City would have normally been responsible. In the City’s last counter offer, the City attempted to avoid their financial role in the revitalization of Tucson’s downtown area.
McCusker did not hide his frustration with the City when he addressed the public, “We are optimistic that the City is finally getting it. We are not that far apart, it is a test of time and patience. We must insist that the City cooperate with us.”
The City is facing a deadline in the lawsuits next Tuesday. The District must either proceed with one of the lawsuits against the City by next Tuesday or waive their right to sue. As a result, the District agreed to enter into a tolling agreement with the City to extend the deadline in the lawsuit in order to give the City a chance to come up with an offer the District could accept on behalf of the taxpayers of Arizona.
The new Board also voted to indemnify past Board members, Jodi Bain and Jonathan Paton, as well as all current and former board members dating to March 2010.
Garfield Traub sued the district for breach of contract and wrongful termination for canceling a contract that the district claimed was overly expensive for a design project in July 2011. Garfield Traub also named Bain and Paton personally in the suit for comments they made about the company’s performance.
“This will hold them harmless for anything they did while they were Rio Nuevo board members,” Rio Nuevo Chairman Fletcher McCusker said. “The lawsuit against the district remains. The only thing we’ve done is protect them as individuals.”
The District has filed a Motion to Dismiss Garfield Traub’s claims.