Restoration of historic Otis Hotel underway again after delay

Restoration work on the Otis Hotel has started again, following a three-month construction delay while state inspectors investigated complaints that cancer-causing asbestos had not been appropriately handled and removed from the building.

Curtis Rystadt, an Oregon-based mortgage broker who owns the building, said he was “extremely frustrated” with the delay in work, and denied any wrongdoing. He said he had hired a contractor licensed to deal with the carcinogenic substance, and his documentation to prove so has been ignored by the inspectors.

“The only thing that’s going to hold the building up is government agencies,” Rystadt said, pointing specifically to the state Department of Labor and Industries, Department of Ecology and the Spokane Regional Clean Air Agency.

“I’m willing to roll up my sleeves and get the work done. I’m not looking to point fingers. I just want to get the work done. I had to pull a crew off of it more than once that was willing to get the work done.”

Considering the delays, Rystadt was unwilling to provide an expected completion date for the rehabilitation of the historic hotel on the outskirts of downtown.

Regardless, it will once again be a hotel, a definitive improvement from the squalid and abandoned state it’s been in for more than a decade. This week, it was announced that the Otis will officially be known as the Hotel Indigo Spokane, part of the global hospitality chain, InterContinental Hotels Group.

The hotel will have 112 rooms, a restaurant and a bar, and open spring 2019, according to a statement from the hotel group.

Rystadt said he planned to keep the iconic sign on the building’s exterior and incorporate other historic elements in the finished building, including an original steam pump once owned by James Armstrong, a Civil War veteran who became an early Spokane business and mining entrepreneur.

The conversion of the hotel on the west end of downtown is yet another signal that a part of town once derided as the city’s “most dangerous” is transforming.

The Otis was built in 1911 as the Willard Hotel, a place for transient workers who needed a place to sleep and bathe. None of the rooms had a bathroom, but instead shared a communal bathroom on each floor. The hotel changed hands and names many times over the years – in 45 years it went from the Willard to the Atlantic to the Milner to the Earle to, finally, the Otis in 1956.

While the hotel was always linked to a hardscrabble lifestyle, more recently it was converted to low-income apartments. In the mid-1990s, a Spokesman-Review article on the “litter-strewn, two-block strip of West First” described the grim situation.

“There’s the Handy Market, a sex arcade, the Coach House Restaurant, a homeless-aid office and a place to get free needles, condoms and popcorn,” the 1995 article read. “This slice of Spokane has a high crime rate and such weak political pull the city rarely bothers to clean its streets or sidewalks. It’s so bleak its lone bar is called the Dead End Tavern, where beer pitchers sell for $2, and razors go for 50 cents.”

The 400 people living in the city’s “most dangerous downtown neighborhood” paid as little as $140 a month.

In 2007, the investment group that owned the Otis evicted its tenants, anticipating renovations “to transform the building into sleek stores and possibly apartments.” Instead, the building sat vacant for a decade following the economic crash of 2008.

In 2017, Rystadt, who purchased it that year for $1.4 million, unveiled plans to get the building back up to code for development. Work went apace until March, when it was halted by the state Department of Labor and Industries after air quality inspectors received complaints that Rystadt didn’t hire a certified contractor to deal with the asbestos, a charge he has denied.

Rystadt said he had spent more than $50,000 disposing of the asbestos, and had 4 Aces Restoration in the building “three or four times” to dispose of floor tiles, popcorn ceiling and insulated pipes embedded in the walls. Each time, he said, workers wore masks and used a negative-pressure enclosure.

On June 1, state inspectors allowed work to begin again, but said the investigation into the asbestos handling and disposal continues.

Rystadt said he was “going to overcome whatever issues there are. We’re looking forward to overcoming this.” Still, he expressed deep frustration with his dealings with state inspectors, and noted his project has passed air and leeching tests.

“They’ve done what they’re supposed to do to start up the work again,” said Tim Church, spokesman with Labor and Industries.

“The main issue early on was that they were having people remove asbestos-contaminated debris who did not have appropriate certifications and training. They do have the correct training now. They have paperwork to show they have a certified asbestos removal contractor and they’ve showed us that.”

Church said the asbestos work at the Otis is expected to be complete on July 17, but the state has until September to complete its investigations into Rystadt, 4 Aces Restoration and Santiago’s Handyman Services, of Oregon.

“Those investigations are not final yet,” Church said. “There has been no conclusion yet. We continue to investigate those complaints. There have been no findings in either direction. There have been no findings that anyone did anything wrong or that anyone didn’t do anything wrong.”

Rystadt’s project is one of many in the west end, which are being developed near the long-standing Carnegie Square complex and a new park the city is developing on top of storm- and wastewater infrastructure.

Jerry and Patty Dicker of GVD Commercial own the Montvale Hotel, the former International Order of Odd Fellows Lodge and Music City Building, all on First Avenue. They also have a minority stake in the old New Madison Hotel on the same block, and have proposed a new parking structure.

A few blocks west, a team of developers has plans to build a seven-story residential tower, and develop a brewery and restaurant in adjoining historic buildings.

This week, the InterContinental Hotels Group inked a deal with Rystadt to develop the Otis as the Hotel Indigo Spokane, joining the development of the Hotel Indigo Vancouver Downtown and Hotel Indigo Everett, both of which are new construction, unlike the Otis.

The Hotel Indigo brand was created in 2004 and now has 88 hotels worldwide, including in Los Angeles and Bali. A statement from the hotel group said the completed project would have 112-room hotel with a restaurant and bar, fitness center, business center and 1,500 square feet of meeting space.

If these multiple efforts in the west end of downtown are successful, the desolate stretch connecting the city’s core with the Browne’s Addition neighborhood may just get a new reputation. Rystadt said he was confident his project would be something to be proud of.

“At the end of the day, we’re going to end up with a fantastic hotel that is a credit to all the working men who helped to make Spokane,” he said. “I’m excited and positive about how the finished product will look.”