City’s Role In Garage Questioned Northtown Owner Sabey Seeks Answers In Meetings With Council Members

NorthTown Mall’s owner is raising questions about the city of Spokane’s involvement in a proposed $100 million retail project downtown.

David Sabey, his attorney and an attorney for Spokane developer John Stone questioned the River Park Square project’s viability during meetings this week with City Council members.

“All we’re doing is walking around to the council members and saying, ‘Hey, can you explain this to me?”’ said Laurent Poole, executive vice president of Sabey Corp. “I have yet to meet anyone who can explain this whole project in detail. For a public/ private partnership, it’s not very public.”

Sabey did not return a phone call Wednesday, but Poole spoke for him.

Poole said Sabey’s questions include: Why would the city pay more than fair market value - which Sabey claims is about $7 million - for the project’s parking garage? Why is public money needed for a private project, and why hasn’t the city solicited bids if the garage is needed for municipal purposes?

The city and River Park Square are negotiating the price of the garage based on its investment value, estimated by appraisers at up to $30 million.

“The way he sizes it up, it’s not a good project and that’s his opinion,” Mayor Jack Geraghty said after his meeting Wednesday with Sabey.

The mayor has said he believes the city’s proposed purchase of the parking garage is both solid financially and good for the city.

The City Council has scheduled a public hearing about the garage purchase at 6 p.m. on Oct. 17 in council chambers.

The garage would be attached to a revitalized River Park Square shopping center, which would include a 24-screen cinema and a new store for its chief anchor tenant, Nordstrom.

The city plans to buy the garage in 1999 by issuing about $30 million in bonds and paying them back with revenue from the garage. No tax money would go to pay off the bonds, city officials said.

The city also plans to rent the land the garage will sit on from the developers for 20 years - beginning at about $610,000 per year. The rent also would come from parking revenues generated by the garage.

A 1995 study commissioned by the developers said the project would generate up to $2.5 million in taxes for the city and provide up to 2,800 jobs.

The developers say they can’t afford the redevelopment without the city’s help.

“It’s too bad Mr. Sabey doesn’t see the vision,” said Betsy Cowles, president of Citizens Realty Co. and Lincoln Investment Co., the owners of River Park Square. “I believe a downtown full of exciting shops, restaurants and businesses is better for Spokane than a boarded-up downtown.”

Sabey once operated his own businesses downtown. He bought the J.C. Penney building in 1990. The retailer subsequently pulled out of downtown and relocated at NorthTown Mall in 1991. The building now is occupied by the Burlington Coat Factory.

Sabey also bought Frederick and Nelson in 1989, which went bankrupt in 1992. The downtown store was unoccupied for two years. That building is now the Crescent Court.

Poole described the project as “mortgaging the city.”

He also alleged the city is gambling with public money by applying for a federal Housing and Urban Development loan for construction of the Nordstrom building. The city has received tentative approval for the $23.8 million loan.

The HUD loan would be repaid with rent and lease payments generated by the project, along with contributions from River Park Square and other downtown property owners.

The city would be at risk only if the entire project were to fail. Then, the federal government could dock the city’s annual community block grant money.

Poole said Sabey is interested in the River Park Square project because NorthTown is one of the city’s largest taxpayers and he is concerned about the city’s long-term growth.

Councilmember Jeff Colliton said Sabey raised some valid questions during a meeting Wednesday, but none that he hadn’t considered. Colliton said he hasn’t decided how he’ll vote on the parking garage proposal.

“I’m honestly right in the middle,” Colliton said. “I don’t want to end up mortgaging the city on something that’s doomed to failure.”

The City Council could vote on the parking garage proposal as early as Oct. 21.

, DataTimes MEMO: This sidebar appeared with the story: MEETING The Spokane City Council will hold a special meeting at 6 p.m. on Oct. 17 to hear public comment and questions about the proposal for the city to buy the River Park Square parking garage. Legal documents regarding the deal will be available for review Friday at City Hall.