Rio Nuevo District

BizTUCSONSeptember 30, 2026

3 minutes read

ROI on Rio

By Jay Gonzales

When the history of Tucson is written 25, 50 or 100 years from now and it continues to grow into a thriving tourist and commerce center, Rio Nuevo and what it has done for Downtown Tucson will be the center of the story.

The argument can be made that the Rio Nuevo Tax Increment Financing District, or TIF, has essentially saved Tucson from being just another dot on the map with basic amenities and little to captivate the metropolitan population base of more than 1 million.

Through the mid-2010s, downtown was on the ropes. Government and business offices were the primary occupants. As they used to say, the streets rolled up at 5:00. There was little activity in the evenings and on the weekends outside of the events taking place at the Tucson Convention Center and few others.

The Rio Nuevo TIF had collected – and spent – hundreds of millions of dollars with little to show for it. But a band of community members invested in making downtown an economic driver for the community formed a board that has, in the last 15 years, led to a transformation of the city center.

Entertainment, dining, hotels, event centers and a base of residents who live a modern urban life have turned downtown into a bustling hub of activity. A few notable corporate headquarters – Caterpillar, Tucson Electric Power and Hexagon among the most prominent – have set downtown as their base.

When businessman Fletcher McCusker was asked by the Arizona Legislature to chair the Rio Nuevo board in 2012, a relatively simple plan was developed by McCusker and those who joined him on the board to give downtown the shot in the arm it needed.

“We believed two things then, and we still believe two things now,” McCusker said. “The things that attract people to an urban environment are, No. 1 food, and No. 2 music.

“If you look at any other successful urban downtown − Austin, Nashville, Cleveland − they thrive on destination dining, destination bars and music. Our initial focus was to create entertainment-type activity that would bring people downtown to step over these broken-down sidewalks and vacant alleys and boarded-up buildings.”

From then until now, Rio Nuevo has helped 66 restaurants open or helped them stay in business, provided investment for eight hotels, and put more than $200 million in TIF money into the projects that have brought downtown to life.

That $200 million has generated more than $800 million in private investment in downtown, which has generated momentum for people to live there. With the $89 million that Rio Nuevo has invested directly into projects like the revamp of the Tucson Convention Center, more than $1.2 billion has helped turn downtown into the economic driver that every community needs.

The tax base in the district, which stretches from west of downtown along Broadway to Park Place mall, has doubled. TIF revenue, which is 50% of sales tax revenue above a baseline amount in the district, was $9.8 million in the 2013 fiscal year. It was $19.9 million in FY 2025.

Still, with all the highly visible progress Rio Nuevo has made downtown, the Arizona Legislature sought to shut down the voter-approved TIF in the 2026 budget process even though the district was extended by then-Gov. Doug Ducey through 2035.

“What’s so weird about the (attempted) repeal is that in our 15 years, we doubled the tax base,” McCusker said. “There’s a group of Republicans that hate what we’re doing. We’re the only TIF in the state and they’re very envious of that. Tempe’s tried to get one, Peoria, Glendale, they’ve all been denied. So one of the ways they can deal with that is to eliminate the only other one.”

In addition to the fact that Gov. Katie Hobbs was not going to approve a budget that including killing Rio Nuevo, McCusker said he got legislative leaders to actually visit Tucson and see what the TIF revenue was doing to be the economic driver that it is.

“We got the speaker and the president of the Senate to visit Tucson,” McCusker said. “They were astonished at what they saw. We learned the hard way that you’ve got to see it to believe it.”