Top Firms Hold Secret Talks On Hotel Oil Spill

Three powerful Spokane companies are holding secretive meetings this week to resolve their dispute over how best to handle an underground oil spill downtown.

Gonzaga University Law School Dean John Clute is mediating talks involving principals from Washington Water Power Co., Metropolitan Mortgage and the Davenport Hotel.

The outcome of the talks, which began Monday, could affect the lawsuit the Davenport owners filed against WWP regarding the spill. It may also determine whether Metropolitan Mortgage sues the utility, too.

The mediation is so important and sensitive to the parties, sources say they considered asking former House Speaker Tom Foley to referee the talks.

“We have begun discussions with the Davenport and Metropolitan Mortgage,” said Rob Strenge, WWP spokesman. “We’re trying to settle our differences.”

Strenge declined to further discuss the talks, noting a strict confidentiality pact until the discussions end. Davenport and Metropolitan officials also refused to discuss the negotiations.

The mediation comes as the state Department of Ecology reviews WWP’s proposal to dam the oil at First Avenue and monitor the spill.

Some neighboring property owners fear an underground wall is only a temporary solution. They would rather see WWP dig up the oil-soaked dirt located about 30 feet below the city streets.

Utility officials say that would be ridiculously expensive and unnecessary, considering the state determined the oil is not a threat to public health or the environment.

The clash over the spill began in 1993 when Davenport and Metropolitan owners read in the newspaper about an underground spill near their multimillion-dollar properties.

WWP hadn’t informed its corporate neighbors about the oil, which leaked from massive underground fuel tanks at its now-defunct steam plant. The utility had also vastly underestimated the size of the spill.

An in-depth analysis discovered that about 75,000 gallons, not 1,300 gallons, had seeped 400 feet south - stopping across First Avenue from both the Davenport and the Metropolitan properties.

Davenport owner Ronald Wai Choi Ng maintains the threat of the spill foiled a long-sought financing package to renovate the Davenport in early 1994.

He filed a lawsuit last August seeking unspecified damages.

The oil spill mediation is in the hands of a veteran corporate attorney. Gonzaga’s Clute was the senior attorney for Boise Cascade Corp. before taking the law school post four years ago.

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