Union Pacific Jumps The Track In The Drive To Restore Tucson's Downtown Depot. By Dave Devine ALMOST A YEAR ago, Southern Pacific Railroad, then-owner of downtown Tucson's 90-year-old train depot, arranged with Great Western Realty to seek tenants for the buildings. Other than the AMTRAK waiting room, most of the large complex had sat vacant for years. The fact that the railroad was willing to lease depot space came as welcome news. Many people interested in preserving the historic buildings--and in returning the site to the important role it once played in our community--were enthusiastic about the possibilities. Depot conversions to leased retail and office space have succeeded all over the country, and Tucson's depot also appeared to have a bright future. Also welcomed were the lease terms Southern Pacific was offering. The company would allow tenants to reduce their rents over a period of years in exchange for the structural and code-related improvements needed before the buildings could be occupied again. Based on these terms, and an attractive downtown location, Richard Melikian of Great Western Realty says he had "lined up an all-star cast of tenants" for the property. Combined with the recent small expansion of the AMTRAK facility in the main building, the future for the depot looked promising a few months ago. One of the prospective tenants was Clarke Romans, who wanted to locate a micro-brewery in a secondary building on the property. Romans began negotiating with Southern Pacific last April, asking for a 15-year lease. By September Romans thought they were very close to finalizing an agreement. But then Union Pacific acquired Southern Pacific and things changed. In late November, Romans received a letter from the Union Pacific officials informing him of a new lease provision which was being included in the deal. The newly inserted clause in the lease required a tenant to vacate the premises on 90 days notice. No compensation would be paid, according to the draft document, for improvements which had been made to the property. Thus, tenants would be gambling on any investment in structural changes they made on the assumption their lease wouldn't be terminated prior to the end of its term--not a very business-like bet. Based on his negotiations with Southern Pacific, Romans had spent a few thousand dollars having the building he was interested in analyzed for required code-related changes. He expected to spend $100,000 on building rehabilitation, and several times that for fixtures and other improvements after the lease was signed. But, of course, he won't do that if the 90-day termination clause remains. Romans told Union Pacific in early December the new lease provision was unacceptable. He says if the company doesn't drop it, he thinks they wouldn't have negotiated in good faith with him. After all, he'd based his plans and spent his money on the lease terms negotiated with Southern Pacific, and the 90-day clause hadn't been included then. Romans is interested in pursuing a lease for the building if the clause is dropped. But he hasn't heard back from the company. Union Pacific officials ignored numerous phone calls from The Weekly. Meanwhile, Melikian believes Union Pacific will change its mind free up the complex for rental. It's important for this to happen, he says, because the depot is a key site for improving downtown Tucson, and he doesn't want to see the buildings mothballed. But he understands it takes time for a large company to make a decision, especially when it requires officials reversing themselves.

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