Mayor’s negotiations with developer leave city responsible for remediation work

In the summer of 2013, as Walt Worthy’s plans for a new downtown Spokane hotel were being finalized, Mayor David Condon met with Worthy and promised more than $3.3 million in city funds for the project.

In his hand, Condon held a memo written by Jan Quintrall, who led the city’s Business and Developer Services Division, and Scott Chesney, the city’s then-planning director, that laid out “partnership parameters” between Worthy and the city, including up to $2 million in funds to alleviate any pollution in the ground beneath the proposed hotel. The other money went to sidewalk and streetscape improvements and to fee waivers.

Last week, a bill came in from Worthy for $318,000 in soil remediation – far less than the $2 million Condon offered and less than the $500,000 contributed to the cleanup by the Spokane Public Facilities District.

The bill shocked City Council members, who said they were not involved in discussions to contribute city funds to Worthy’s hotel efforts, even though they have to approve the payment.

“I was never part of the conversations. As far as I know, the council was never part of the memo or negotiations,” Councilwoman Amber Waldref said. “There never was an official sign-off by the council in terms of dollar amounts. What makes me a little uncomfortable is the administration making deals. It puts us in an awkward position.”

Condon dismissed such criticism and said he discussed the matter with Council President Ben Stuckart. Condon linked the effort to clean up land adjacent to a former rail yard as part of the city’s larger goal to encourage more development in the city’s core, where former industrial sites are more likely to be located.

“Anytime we can remediate anything over the aquifer, we should take a leadership position on that,” Condon said. “We need to partner to take up issues that are part of the public domain.”

Stuckart said he was shown the memo but was not allowed any input and had no ability to influence its details.

Since Condon’s assurances were made, the Worthy hotel – officially called the Davenport Grand Hotel – has risen above the east end of downtown across from the Spokane Convention Center and been lauded by downtown developers as the impetus for a new era of growth in the core. Also in that time, Chesney has been pushed out of City Hall by Quintrall, who resigned under fire. Her last day at the city is April 1.

The $138 million hotel, which is expected to welcome its first guests in June, will have 716 rooms – nearly twice the 375 rooms at the nearby Doubletree Hotel. The new hotel will have 40 suites, 25 meeting rooms, an 18,000-square-foot ballroom and 940 covered parking spaces.

The land beneath the hotel, however, has a complicated past. In 2002, voters authorized a significant expansion of the Convention Center, which led to the Spokane Public Facilities District purchasing the land now beneath Worthy’s new hotel from the city.

At that time, Worthy was critical of the Convention Center expansion, calling it “Doubletree’s convention center. It’s not Spokane’s convention center.”

Worthy had just renovated and reopened the historic Davenport Hotel, and suggested the Convention Center’s eastward expansion would hurt his new venture.

“They’ll fill up by default and the rest of us will get the scraps. It’s a totally unfair competitive advantage,” he said of Doubletree. “The pie is going to be bigger, there’s no question about it. It’s just going to be three-quarters eaten by the time we get any of it.”

An attempt to reach Matt Jensen, Worthy’s director of sales and marketing, was unsuccessful Tuesday.

Waldref and other council members say they’ll approve the $318,000 request and are supportive of the new hotel, but said they wanted more input in similar situations in the future.

“If we’re going to promise somebody something, it needs to be ratified beforehand,” said Stuckart, noting that he had seen the memo in 2013. “Just because I saw the memo doesn’t mean I approved of the memo or had any input on the memo.”

Gavin Cooley, the city’s chief financial officer, said the memo was “a roll-up of a lot of conversations.”

“In all of those, everybody was saying pretty much the same thing. ‘We want to do all we can. It’s an extremely important project,’ ” Cooley said. “The asks weren’t large. We all at the time agreed that these were the general parameters.”

Cooley pointed to Portland’s strained efforts to build a hotel near its convention center. Funding for the $212 million hotel has been tied up in courts, as opponents of the hotel argue that $60 million in public bonds promised to the hotel require voter approval. Another $18 million in public subsidies have been pledged to the Portland hotel.

“We were faced with the opportunity to have a local developer do that unilaterally,” Cooley said.

Waldref said such arguments miss the point.

“When you’re committing money, it has to be budgeted. If that was a commitment that was made, it should’ve been budgeted in our 2015 budget,” she said. “I was surprised that the administration two years ago didn’t say, ‘Will you sign off on this agreement?’ And the council would’ve done it. If this happens again, I’m not going to approve it. This should be a learning experience, and the administration should apologize.”