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Rio Nuevo makes crucial vote in Caterpillar's move to Tucson

Published: May. 4, 2016 at 10:08 PM MST|Updated: May. 5, 2016 at 7:16 PM MST
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TUCSON, AZ (Tucson News Now) - The Rio Nuevo Board voted unanimously late Wednesday afternoon, May 4, to spend $52 million as part of an incentive package to help Caterpillar consolidate its surface mining division to Tucson. 

"This is the most aggressive package the state has ever done," Rio Nuevo Board Chair Fletcher McCusker said.

If the final contract is approved, Rio Nuevo will spend $2 million to help defray the company's moving costs from the midwest to Tucson.

The Arizona Commerce Authority must still approve another $4 million as part of the state's deal. 

Rio Nuevo will also finance the construction of a new headquarters which will cost up to $50 million. It will lease the buildings to Caterpillar for 25 years. 

The Rio Nuevo vote was the first step in the process. As well as the state, both the city of Tucson and Pima County must approve their incentive deals. The county will vote on May 17. 

Caterpillar is expected to have a $1.9 billion impact in Tucson and provide up to 700 high paying, high tech jobs. 

It was a competitive process with several other cities but in the end, Tucson beat out the other finalist, Denver.

Much of the credit for bringing the company to southern Arizona is given to Gov. Doug Ducey, who first approached Caterpillar's site selector and offered "to do what is necessary to be competitive."

"This is a competitive situation among states," Ducey told KOLD News 13. "There were other states at the table."

But Arizona was able to put together the best possible package which sold the company.

The site selected for the headquarters is what is affectionately called "the big hole in the ground west of the freeway."

It's a five-acre parcel which is owned by the city, but if approved, will also become part of the deal. Its location gives it easy access to the Caterpillar Proving Grounds near Green Valley.

It's where the company takes potential customers and other executives to show what its equipment can do and to make the sale. 

It is also close to Mexico which has a large Caterpillar footprint and is a lucrative market. 

Caterpillar is in the process of restructuring and consolidating. It is laying off 10,000 employees and closing five plants in its downsizing efforts. 

Tucson will benefit from the restructuring process. 

If there are no roadblocks, the first Caterpillar employees will start arriving in the summer.

Sun Corridor President and CEO Joe Snell, who visited with company officials in Milwaukee, described some of the concerns the workers had about "living in the desert."

Tarantulas, scorpions and other desert creatures came up in conversation.

"There is a learning process," he said. 

As far as luring such a large company to Tucson, McCusker opened the meeting by calling it "astonishing and unimaginable after Tucson has suffered failure after failure."

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