Lawsuit against Rio Nuevo for development deal

Posted: Updated:

TUCSON, Ariz. -- It was a deal intended to revitalize downtown.  A whole downtown Tucson block sold to a group of investors for just $100.

Now taxpayer advocate John Kromko is suing Rio Nuevo and BP Post Investors. Because years later that block is far from developed.

In 2006 the Rio Nuevo board sold almost an entire city block on Congress Street.

Don Bourn of BP Post Investors bought the so-called "thrifty block" and in return they promised to build condos and retail space.

Several years later the lot is empty.

"He never built anything so we filed this complaint saying that was an unconstitutional gift to this developer," said Kromko.

John Kromko and his lawyer David Hardy filed the lawsuit in front of city hall. They claim that the sale represents a gift.

"The Arizona Constitution has a clause in it that forbids using public property as a gift, I think this is a conspicuous violation of that," said Kromko.

Kromko and his supporters are not asking for money.  They just want the block to go back to public ownership and the developer to get his $100 back.

"We're just asking that it be undone as it should be the developer didn't perform the city council should of taken this back long ago," said Kromko.

City councilmember Steve Kozachik was not a member when the city approved the deal, but he says Kromko has bad timing in filing this complaint.

"The developer is right in the middle of trying to get financing for a boutique hotel that is going to be perfect for this space and so to interrupt that right now with this kind of thing is untimely.  It's unfortunate," said Kozachik.

Kozachik says starting over with this project is not the right idea.

"Now we have a project that is ready to start to pull that off the table and rewind the tape and go back to where we were however many years ago this thing began is the wrong thing to do," said Kozachik.

Kromko thinks it's the right thing and is pretty confident in his case.

"We should win this easily, because there was no question that it was a gift," said Kromko.

During the demolition of the thrifty block, Rio Nuevo spent almost $900,000 to clear the lot.