Monday, June 29, 2009

Cloth Conundrum

The developer bifurcation between Rialto Theater president Michael Crawford and the DTDC (Don Martin and business ethics superstar (takes after dad) Scott Stiteler) just climbed a notch with a Crawford email to the Cloth Council, i.e. the board of the Downtown Tucson Partnership, about as thread infested a group one will ever find.

Fellow Board Members,

I would like to add the Rialto Theatre/Land acquisition issue to the Agenda for discussion and action.

I would also like, after discussing the current state of the issue, to have the DTP vote on a resolution that recommends to the Mayor and Council that the City/Rio Nuevo District 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.

To read a very well written explanation of the current status of this issue please read the link below.

Also, to see a story done about the Theatre for Arizona Illustrated click the following link.

This is the kind of issue the DTP was formed to take a leadership role on. I hope after discussing the issue that will occur.

Thank You,
Michael J. Crawford

Crawford is proposing the radical concept that the DTP do something, a jaw dropper in the Clothiverse. The bifurcation also provides a sense of the gaming that can develop in a world of smoke and rhetoric where competence, results, and common sense play no role. The best analysis available is Donovan Durband’s online piece at the Citizen.

In a separate but thematically related article Rob O'Dell notes the profitability of consultants who know how to weave the community fabric.


Anonymous retrorv said...

I doubt that the City could condemn the Rialto portions even if it wanted to. Prop 207 limits condemnation to only public uses and getting improvements in a theater isn't a public use. Here's the link to the law:

6/29/2009 10:59 AM  
Anonymous Anonymous said...

Let's see: The public owns the Rialto Theatre, the public derives major benefit from its asset, the asset requires additional property to function. Ergo, the city can condemn the property necessary to protect its asset.

6/29/2009 11:01 AM  
Anonymous Anon2 said...

You should have mentioned this part in O'Dell's story.

Through the end of May, Rio Nuevo has spent nearly $118 million redeveloping Downtown. The city has only $25 million left from its $78 million bond sale last December, and $17 million of that is legally obligated through contracts, leaving only $8 million to spend.


6/29/2009 12:58 PM  
Anonymous retrorv said...

Excellent legal analysis Anonymous. Here's the definition of public use in the proposition:







I don't see anything in there about the "public deriving a major benefit from its asset" as a public purpose. In fact, the proposition specifically excludes economic development as a public use. The Rialto Theater is a business and can be entered by the general public only upon buying a ticket-not exactly like condemning land for a park. It is a public asset only in the ethereal sense. It is at the very least debatable; ergo, not susceptible of blanket statements.

6/29/2009 4:36 PM  
Anonymous Observer said...

The wrangling will be as political as legal, and there is plenty of blame to go around here. Sometimes developers get to go, as x4mr writes, $Ka-ching!

Yet at other times, sometimes undeserved, developers get stalled, thwarted, screwed and outright betrayed. I know a developer who was told to pay Hecker and Eckstrom almost a hundred grand to get a sweet hotel deal worth many millions. They paid the schmucks, and the deal went to someone else.

How does one work the levers of right vs. wrong, sound vs. stupid, value vs. waste in a system that cares about none of the above? DTP (TREO, blah, blah) will move forward with one question in mind, "What's best for ME, ME, ME, and ME?"

6/29/2009 6:47 PM  
Anonymous Anonymous said...

No, retrorv, the Rialto Theatre is owned by the public and the public enjoys it, as does the public agency, e.g., the City of Tucson. It can be litigated, but in the end, I'm sure the will of the people will prevail. The Rialto Theatre most certainly is not a business. It's a nonprofit corporation operated exclusively for the benefit of the public, under an agreement with Rio Nuevo and the City of Tucson.

Legal minds far more expert than my own have already done the due diligence. The property owned by Martin and Stiteler is eminently condemnable.

6/29/2009 6:52 PM  
Anonymous Anon2 said...

I'm sure the will of the people will prevail.

The question, Anon, is the will of which people? The Hatfields (DTDC and friends) or the McCoys (Crawford and friends)?

My bet is on the McCoys, since the closure of the Rialto is more problematic than a pissed off DTDC.

6/29/2009 7:21 PM  
Anonymous Anonymous said...

I'd agree with you, Anon2, but does DTDC really have any friends?

I heard the Rialto has an email list in the tens of thousands and marshalled hundreds of calls in emails in a 48 hour period before the last council meeting.

Who cares about some greedy developers who are obviously intent on grabbing property?

6/29/2009 7:59 PM  
Anonymous Thomas said...

Don't cry in your Wheaties over the poor "screwed" DTDC, Observer. They have enough millions under their belt and will be ok.

Their sophomoric response to the delay (walking out, but more so, the back rent) has cemented support for the Rialto, and Anon2 is absolutely right. There is no way the theater goes bankrupt. Anonymous is also right (though I don't know about "tens of thousands") that the Rialto has a formidable network of support.

The city will probably end up throwing some money at DTDC in exchange for a resolution minimizing the embarrassment of all involved.

6/29/2009 8:40 PM  
Anonymous Henry said...

No one has asked a serious question: With Williams and Dame gone, who is really qualified in DTDC to do anything in regard to downtown revitalization?

My understanding is that Stiteler is largely a hard money lender with some sprawl home building experience and Martin, well, doesn't his company suck off the military tit and punch out parts for aerospace companies? I don't think he's ever "developed" any real estate in his life, let alone taken on a complex project like the one envisioned in the DTDC development agreement.

Seems like our best hope is to let these guys self-destruct, and maybe the last will be the best in terms of seeing some genuine developers appear on the scene.

6/29/2009 8:52 PM  
Anonymous Thomas said...

Well said, Henry. Stiteler is a bad daddy's baby as x4mr hinted. Martin sold his soul long ago to dark masters, the dollar most of all, and really doesn't know jack about development.

The problem is whether "genuine developers" will appear in such a dysfunctional scene where one has to stroke the likes of Eckstrom and Hecker to get a deal.

6/29/2009 9:31 PM  
Blogger Liza said...

I just have one question for the insiders. Does Tucson actually have some light at the end of the tunnel when these good ol' boys finally die or become too demented to attend meetings? Or, is a new generation of replacements already being groomed?

6/30/2009 9:06 AM  
Anonymous Another Anon said...

Al Franken gets MN Senate seat!

6/30/2009 11:45 AM  
Anonymous kaneui said...

It certainly would be enlightening to have more details regarding the Williams & Dame departure from Tucson. (An e-mail to them requesting an explanation continues to go unanswered.)

Did the other DTDC partners actually fire W&D once they got their tentative development deal with the city? Or, did the partners themselves have too many disagreements to move forward, as suggested by the ADS? Or--did W&D just throw in the towel, realizing they were dealing with amateur partners as well as incompetents at City Hall, and decide the aggravation in Tucson just wasn't worth it?

In any case, it was a shame, as they represented a firm with a bonafide track record of redevelopment success. And I'm afraid until the city--among other things--removes the approval obstructions in Development Services and demonstrates more competence in putting together development deals, qualified folks like W&D will continue to run in the other direction.

6/30/2009 2:16 PM  
Anonymous Anon2 said...

Kaneui must be pretty close to the action. Those interested can read the ADS (mostly O'Dell) articles about the project in the middle of December 2008. W & D bolted late January and the article about it is in the 2/5/2009 Star. Jim Campbell was the primary mouthpiece for the DTDC, not Martin or Stiteler, and he said the split occurred because they couldn't agree on a contract, but don't forget W & D was involved in other projects and trying to become a player in town with Rio Nuevo projects (succeeding in at least one).

When they left, they left it all and wouldn't discuss it. My sense is that they got disgusted with the whole town in general.

This blog went after Rio Nuevo in spring 2008, and related or not O'Dell followed suit a few months later. By November 2008, the city council was getting very antsy about progress in Rio Nuevo. The press published many articles about this deal in mid December, not to mention the approval of the hotel. I think there was desperation to show progress in answer to the mounting criticism.

In response to Liza's question, I don't know when or if real change can occur, but a lot of variables are getting messy. The state is financially broker than broke. Some of the local icons are getting old and fat. Dan and Art Eckstrom are cholesterol bombs that could exit Michael Jackson style any day, and although they are grooming Valadez, Ramon will never be like them. South Tucson is a whole subject in itself, and dismantling that regime, where public office is decided by bloodline, would help with some of the corruption and cronyism.

I don't know how old you are, Liza, but if you're much older than twelve, don't count on it in the current life.

6/30/2009 5:13 PM  
Anonymous Robish said...

My understanding is that Scott Stiteler fired Williams and Dame (specifically its Tucson representative Matt Brown) within 24 hours of getting the predevelopment agreement passed by the city council.

Matt Brown used to work for the City of Portland and had worked with WDD for at least a few years before all this. He was in Tucson regularly looking for opportunities for WDD after the streetcar became a viable opportunity. My sense is that he understood fully how inadequate the Tucson political and city administrative environment is to get smart development moving forward.

Kaneui is correct in all of his speculations, I believe.

6/30/2009 7:35 PM  
Anonymous Anon2 said...

Robish - Are you saying the DTDC went before everyone with W&D as legitimizing partners, but then when the predevelopment agreement was approved by the council, Stiteler tossed them in the trash so he could proceed with only Martin and Campbell?

6/30/2009 7:57 PM  
Anonymous Robish said...

That's what I am saying.

Everyone should understand that Williams and Dame Development was held up as evidence that Tucson's downtown effort was on track; we had attracted big-league developers with a track record in a city (Portland) that both Tucson's Cloth and Tucson's more Progressive community envy and admire.

Homer Williams himself came down from Portland to address the city council that night last December. Matt Brown, who had done the Tucson legwork, took on the role of the guy who moves the placards and maps around, so that Homer could step up to the mic and close the deal.

Williams and Dame's presence in this partnership gave it Tucson's Good Housekeeping Seal of Approval. After the PDA was approved, they were expendable.

A reputable local developer, Ron Schwabe, was also kicked to the curb.

Later, Campbell left the DTDC partnership. Martin was only in the game because he had delivered the Rialto block after his odd pairing with Doug Biggers in a 50/50 partnership.

6/30/2009 8:26 PM  
Anonymous kaneui said...

If that is all true, Robish, the council should have good legal grounds to terminate the PDA and be off the hook for at least a good part of the $950k they would have otherwise owed DTDC.

The crazy thing is that Trasoff was pushing for the final agreement as proposed by Stiteler and Martin, rather than protecting the Rialto's interests as an important asset of the city. If she wasn't doomed before, maybe that move will be the final nail in her coffin come November.

6/30/2009 10:02 PM  
Anonymous Robish said...

City Attorney Mike Rankin has suggested that the City's legal position will be that the parties to the PDA have substantially changed, therefore nullifying it.

In a rational political universe, all of the sitting city council members would be in trouble politically, especially those up for re-election this year, and especially those that chaired the council's subcommittee on Rio Nuevo.

But this is Tucson, after all, not such a rational body politic.

The Rio Nuevo Board of Directors met for the final time today, assuming the Legislature passes a budget. They sent out a notice little more than 24 hours in advance of the meeting, minimally hitting the mark to comply with the state's open meeting law.

I wonder what mischief they got themselves into. Perhaps Rob O'Dell will tell us.

They probably gave Greg Shelko a plaque in recognition of his great work over the last five years. Don't let the door hit you on the way out, Greg.

6/30/2009 10:42 PM  
Anonymous kaneui said...

In their recent last-minute attempt to demonstrate some degree of transparency, Rio Nuevo has posted numerous documents on their city website, including the June 30 meeting agenda and proposed resolutions to accept a fiscal 2009-10 budget and reimburse up to $250M of TCC expansion/hotel expenses.

For 2009-10, projected revenues include about $10M from TIF, and expenses of $24M for the TCC expansion/hotel and $16M for "Other Project Obligations."

Whether any of these resolutions will hold water with the new Rio Nuevo board chosen by the state remains to be seen. (Not to mention how DTP will be involved with Rio Nuevo, if at all.)

7/01/2009 5:39 PM  
Anonymous Robish said...

DTP will be running whatever is left of Rio Nuevo to the extent that the City of Tucson can get away with DTP running Rio Nuevo (within the confines of whatever restrictions the State ends up imposing on the collection and disbursement of TIF).

7/01/2009 8:35 PM  
Anonymous kaneui said...

It will be interesting to see if any of the current Rio Nuevo Board--Eckstrom, Russell, DiGregorio, et al--end up on the new board, and what duties/responsibilities they might defer to DTP. If the state can ever finalize a new budget, we may get an answer.

7/01/2009 11:41 PM  
Anonymous Robish said...

If the legislation that ends up being signed by the governor stipulates that the only members of the new board will be those that are chosen by the House, Senate, and Governor, you can be assured that none of those three, or the fourth member (from South Tucson) will be on it.

Their only chance to stay on is if there is some compromise to roll the existing board into a larger new body. That idea was being circulated a few months ago, but I believe they have settled on 3-3-3 (appointed by House, Senate, Governor).

7/02/2009 12:39 AM  

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