‘As Albuquerque, you deserve that’: Tucson business leader shares how the city revitalized its Downtown

It’s best to have a “yes mentality” when looking at ways to improve an area like Downtown Albuquerque.

Those are the words of Edmund Marquez, a Tucson, Arizona, business magnate and vice chairman of Rio Nuevo, Downtown Tucson’s Tax Increment Finance District.

Marquez was the keynote speaker at the Economic Forum of Albuquerque on Wednesday, laying out to business leaders how Tucson took its Downtown from rags to riches — an area that now generates millions of dollars in revenue and has seen a resurgence in new businesses across food, entertainment, residential and retail — through tax increment financing.

In his roughly 50-minute speech, Marquez spoke about how Rio Nuevo failed at first — mired in scandal in the early days from misspending more than $200 million on government projects that weren’t visible to the city’s residents — and how it rebounded to a district that, as of fiscal year 2024, generated nearly $18.6 million in revenue. That’s something Marquez, whose family is from Mora, New Mexico, said is possible for Albuquerque’s Downtown.

“I did a tour of your Downtown. I like your Downtown. It’s a great footprint. It’s nice,” Marquez told Forum members. “It’s just dead. There’s not much going on. There’s not much activity.

“Downtown (Tucson), if you go down on a Saturday night, it’s booming. It’s packed. There’s music going on. There’s restaurants that are packed, just slammed. There’s lines to get into the restaurants we have activated Downtown. And you deserve that. As Albuquerque, you deserve that.”

Marquez, appointed by former Arizona Gov. Doug Ducey to the Rio Nuevo board back in 2015, said the district, which collects a portion of sales taxes from businesses in the area, was on pace to collect nearly $18.6 million in revenue in fiscal year 2024 — a record and up from roughly $9.9 million in fiscal year 2013. On average, he said, the Rio Nuevo tax district in Downtown Tucson generates about $1.3 million a month.

That money is then reinvested into businesses in the area, a mechanism that also incentivizes current and new investors. For example, of the many projects Rio Nuevo has partnered on, it invested $1 million generated from the TIF into the Leo Kent, a four-star hotel in Downtown Tucson. Project developers, he said, invested about another $30 million.

In another instance, Rio Nuevo invested $1 million in Zemam’s Ethiopian Cuisine, which was recently completed and features a coffee shop, sports bar and outdoor dining.

“We’ve invested a ton into them, more than we typically would,” Marquez said. “Home run. It’s basically packed. We changed their entire campus.”

But tax increment financing is not new to Albuquerque’s Downtown, said Terry Brunner, the director of the city’s Metropolitan Redevelopment Agency, which is currently in the process of setting up a TIF District of its own.

City officials announced last month their intent to create a TIF District for the Downtown area, one that will pull revenue from both property taxes and, eventually, gross receipts taxes.

Brunner told the Journal Wednesday that the district will start taking up to 75% of the increment of growth in property taxes starting next year, with the city likely asking the county to join in. And, by 2026, MRA hopes to start collecting from gross receipts taxes from the city, state and county — though it needs approval from Albuquerque City Council, which MRA will ask for this fall, and from the State Board of Finance, which is “working on those rules as we speak,” Brunner said.

“Under that scenario, (the New Mexico Taxation and Revenue Department) would start their baseline calculation for Downtown in July of next year, let that run for a whole year and then start taking collections in July of 2026,” Brunner said.

He said the district is estimated to bring in about $10 million in revenue a year over 20 years, though he said if the city runs the district like Rio Nuevo, “you’re going to raise that number even higher because of how you’re reinvesting.”

City officials also want business owners to create a Business Improvement District — which was also announced last month — in which property owners pay a fee that is collected by the city and then returned to the district for things like cleaning services, security, special parking deals and marketing.

Brunner said the city expects an application for a BID from property owners in the next few weeks, which would then “trigger the process for us at the city, commissioning a study for that BID and then going from there to get it organized.”

Brunner, who was in attendance for the Forum where Marquez presented on Tucson’s Downtown improvements, said he was impressed with what Rio Nuevo was able to do with tax increment financing.

“I hope it opens Albuquerque’s eyes to the potential of this type of financial tool, and in thinking about how a city that’s so similar to Albuquerque was able to transform itself,” Brunner said. “I was struck by the fact that they aren’t using their TIF money to invest 100% in a project. They’re clearly scattering it through many, many projects, which is a good strategy. ... They’re not interested in financing just anything that comes along; it’s got to be generating tax, and that’s an important perspective.”