Rio Nuevo is suing the owner of a downtown Tucson hotel that it financed after the owner announced the hotel would close.
The lawsuit, filed in Pima County Superior Court on Wednesday, May 17, alleges breach of contract and seeks $333,333 that Rio Nuevo provided to Citizen Hotel owner Moniqua Lane to renovate the former Tucson Citizen building at 82 S. Stone Ave. into a 10-room wine-centric boutique hotel.
The lawsuit alleges that Lane misrepresented herself as the sole owner of the building when she requested Rio Nuevo’s support in March 2022.
Lane had a minority ownership in the property with Sofonias Astatke and Equilibrium Real Estate Investments, listed as Equilibrium QOZB2C LLC. in Pima County Assessor records.
Equilibrium bought out her share early this year, Lane said on Monday when news broke that the hotel and its lobby bar were closing on Sunday, May 21, after only 15 months.
Lane on Thursday said she had not seen the lawsuit and could not comment. She also owns the Downtown Clifton and Red Light Lounge at 485 S. Stone Ave.
Also named in the suit is Lane’s construction company MKL Devco, LLC, which worked on the $2.5 million Citizen Hotel renovation project.
Citizen Hotel is the first Rio Nuevo-funded project to fail, said longtime Chairman Fletcher McCusker.
“It’s the first time ... where a business went out of business abruptly,” he said.
In its April 2022 economic benefits agreement with Lane, Rio Nuevo initially pledged to provide $500,000 in total support for the Citizen Hotel, with some $200,000 set aside as rent relief for Sand-Reckoner Vineyards. Sand-Reckoner was supposed to lease the 5,000-square-foot basement to create a wine-tasting room and barreling facility.
When Sand-Reckoner pulled out of the project, Rio Nuevo withheld the $200,000.
Astatke has not responded to calls for comment about what will become of the building.
The Citizen Building, which dates back to 1913, was the original home of the now defunct Tucson Citizen newspaper. For years it was used as office space for doctors, dentists, lawyers and other professionals.
Rio Nuevo works to revitalize downtown Tucson using funds generated from a portion of state sales tax from businesses within its district.
Tucson's Department of Transportation and Mobility shared an aerial view of the latest progress in phase three of the Downtown Links project on Jan. 6. The new roadway and multi-use path are part of the lengthy city project that will connect Barraza-Aviation Parkway and Interstate 10. Video courtesy of Tucson Department of Transportation & Mobility.
