The Rio Nuevo District Board is weighing whether to pull its support from the long-stalled Friedman Block redevelopment after balking at a $2 million funding request that includes $1 million just for nearby parking.

Overall, May's numbers were previously a driving concern, with final projections dropping from $1.6 to $1.3 million a year. However, prospects are now looking good as of June, jumping to $1.8 million.

CFO Dan Myers said during the board's Aug. 11 meeting he believes part of the May decrease could be attributed to payments not being credited immediately to Rio Nuevo's account.

"I think there may be still a couple hundred thousand in May that we didn't receive, and hopefully we'll get that in June," Myers said.

Myers said part of the reason for the recent jump was that Rio Nuevo had to push some of its outstanding commitments to the next fiscal year. The district has yet to receive TIF rates for June and July.

Board Chair Fletcher McCusker said a project involving Empire Pizza has been pushed until next fiscal year to ensure it had sorted out communications with the Pima County Historical Society and received its permits from the city of Tucson.

"There's nobody more transparent than us," McCusker said. "I think it just helps to remind people where our money is going."

Rio Nuevo's fiscal year began July 1, meaning any support for Empire's project would come from the district's current budget, pending the outcome of the city's permitting process.

In social media posts published before Rio Nuevo's Aug. 11 meeting, Empire Pizza suggested its Hydra building expansion may be off entirely, citing delays from historic review and more than $500,000 in rent paid on a building that remains empty.

Empire's patio was the site of two of the nine shooting victims struck during the July 19 mass shooting on Congress Street, an incident the restaurant referenced in the same string of social media posts that raised doubts about the Hydra expansion.

According to the Arizona Daily Star, Rio Nuevo has reimbursed Empire Pizza $186,000 so far, out of a total $512,000 commitment under its 2023 agreement.

The board also revisited the long-delayed Friedman Block project, a formerly stagnant site that has since been fenced off for public safety, thanks in part to Rio Nuevo.

Union Hospitality Group's Grant Krueger, who has been working closely with the project, presented the board with an actionable budget for the block's renovation and reopening. Among other funding sources, Krueger estimated that a $2 million contribution from Rio Nuevo would help keep the project on its current 10-year timeline.

With expected outside investment and TPT rebates factored in, Krueger said, funding remains tight.

"Even all of these things combined are just going to be barely enough to bridge the gap to get this thing across the finish line," he said. "It's a big project, it's aggressive, but I think there's a way to get this done."

Part of the block's previously unresolved issues was a lack of parking, and part of the current funding request would pay for an agreement with the nearby Council House apartments to make up the difference. According to the proposal, $1 million of that $2 million request is to pay Council House for continued use of its parking lot.

Board members pushed back against the proposal.

"There's no way we can fund the kind of ask that you're suggesting on the parking side," McCusker said, adding that it was unrealistic to ask for more than $1 million in funds just to provide parking.

He explained that the current plan would give Council House too much leverage over the completion of Friedman Block's renovation.

"What's frustrating to me is that we've been talking about negotiating with Council House, probably for a year and a half, and all that has happened is the number has gone up, not down," said Board Member Corki Poster.

Poster likened the negotiation terms to extortion, implying that Council House has grossly overestimated the value of its parking property.

"In the next two weeks, I think we need a realistic negotiation with Council House," Poster said.

No action was taken on the plan during the meeting, as the board intends to revisit the topic next session. However, members noted that unless a parking solution is reached, Rio Nuevo may have to pull its support for the Friedman Block project.

In other developments, the Cornish Pasty is set to open downtown by early 2027, and the board approved $400,000 toward the expansion of Pueblo Vida brewery to a second location, a rustic brewhouse that is bike and dog friendly.

The board also approved other funding requests that were discussed in previous meetings, including $111,300 for safety initiatives proposed by Downtown Tucson Partnership. This would fund Safe Ambassadors, off-duty officers, downtown cleanups, a marketing campaign and more.

Ambassadors are meant to supplement the physical deterrent of police officers while remaining unimposing, with the goal of maintaining public order and trust while staying in contact with rapid response units when needed.

The partnership is also planning a first-ever Fall Field Day for downtown office workers, an event yet to be formally announced, whose funding is part of the approved request.

The Rio Nuevo' board met again Aug. 25. Look for a rundown of that meeting soon.

Quentin Agnello is a University of Arizona alum and freelance journalist in Tucson. Contact him at qsagnello@gmail.com.

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