The Internal Revenue Service is auditing Tucson's Rio Nuevo Downtown Redevelopment District, aiming to inspect its 2002 bond sales.
The IRS is requesting information related to a purchase and lease-back agreement between the city of Tucson and Rio Nuevo for the Tucson Convention Center, said Fletcher McCusker, the chairman of the board.
In 2002, the board sold $35 million in bonds known as certificates of participation. The money was used to purchase the convention center from the city, and then lease it back to the city, McCusker said.
The IRS is looking into how that money was used, and the board is cooperating, he said.
Rio Nuevo's board membership and its legal status are different now than in 2002. Since then, the Legislature took over the board and appointed new members. Lawmakers also limited the scope of Rio Nuevo to mostly the convention center, as opposed to a broader downtown redevelopment effort.
"At this point we have no reason to believe its anything but routine. We will release the results of the audit as soon as we receive them from the IRS," McCusker said.
Previously, the FBI seized records from the Rio Nuevo district, and the state attorney general was conducting an investigation. McCusker said he has not seen an update on those investigations.