Tucson's Rio Nuevo District has made great strides, but there are necessary goals still to be reached, the Arizona Auditor General has concluded in a new report.
One of those mandates — increasing the number of hotel rooms downtown to support events at the Tucson Convention Center — has been criticized by some Tucson residents who think the expenditure is unnecessary.
“The audit ... confirms our duty to continually improve the convention center and increase hotel properties downtown, after we were ranked last among the 11 convention centers evaluated,” Fletcher McCusker, chairman of the Rio Nuevo board, told the Star. “In spite of the recent criticism regarding the district's momentum in supporting new hotel properties, the auditors made it clear that adding hotel beds must remain the district's primary focus.”
Oregon developers are working on a new downtown Tucson hotel that will include a festival alley, lined with stores, bars, restaurants and outdoor seating for entertainment.
The upcoming development of the Moxy Hotel and Tucson Inn and Market downtown would move Tucson into ninth place, when compared with other special taxing districts.
Those districts Rio Nuevo was compared with are in Long Beach, Palm Springs and San Jose, Calif.; Albuquerque; Austin, El Paso, Fort Worth and Irving, Texas; Spokane, Wash., and Phoenix.
“This is one of the most important characteristics for event planners, as it serves as an indicator of the market’s ability to have adequate room blocks available within a close proximity to the event facility,” the audit says.
A state audit of Rio Nuevo says the district must prioritize more hotel rooms near the Tucson Convention Center.
The ranking is based on the total number of hotel rooms within a half-mile of the event venue. Tucson currently has 993 rooms near the TCC.
Local developer Tucson Urban LLC is working on The Moxy, a Marriott brand hotel at 55 N. Fifth Ave, immediately above the Depot Plaza parking garage.
And Oregon developers are working on Tucson Inn & Market, a hotel with restaurants, shops and entertainment at 75 E. Broadway, adjacent to the Old Chicago Store.
A planned downtown hotel, Tucson Inn & Market, includes a "festival alley" that will features stores, bars, restaurants and outdoor entertainment.
The Rio Nuevo district’s finances are audited annually, and its performance is reviewed every three years.
The audit found the district has made substantial progress since its reorganization in 2010 and achieved “compliance with statutory mandates, prudent financial management and use of public funds to stimulate downtown redevelopment.”
Since its last review in 2022, auditors noted the district has made $115.8 million in financial commitments and secured $420.2 million of private sector investment.
Oregon developers are working on a hotel on the vacant downtown lot at 75 E. Broadway.
The district was praised for having the highest number of events at the TCC when compared to the other markets.
TCC hosted 633 events in 2016, and that grew to 1,044 events in fiscal year 2025.
The Moxy Hotel will be located on vacant downtown Tucson lot next door to the MLK Apartments on Fifth Avenue and immediately above the Depot Plaza parking garage downtown.
“In large part, this is due to the variety of facilities within the district’s portfolio, which keep the TCC campus constantly activated between conventions, banquets, sporting events, entertainment and performing arts,” the audit says.
The auditors recommend a master plan with local governments to increase the number of city-wide events hosted in the district and that it should strive to replicate the convention district in Phoenix or Long Beach — given that the latter has similar facilities.
That recommendation is particularly challenging because Rio Nuevo would need significant support and collaboration from the city and the county, and a regional master plan, McCusker said.
The Moxy Hotel by Marriott will be built on an empty lot downtown next to MLK apartments, 55 N. Fifth Ave.
“Launching a plan to compete with Phoenix’s and Long Beach’s convention business seems unrealistic,” he said, “but we are ready to address this grand challenge.”
Aside from adding more hotel beds and developing a master plan, the audit recommends Rio Nuevo add more staff and develop budget projections that extend beyond the upcoming fiscal year.
The audit was issued Nov. 18, and Rio Nuevo has 45 days to file a formal response.
