City Council OKs deal with GSI to continue business development, federal lobbying

Greater Spokane Incorporated will keep the business of City Hall, at least through the end of December.

The Spokane City Council voted unanimously Monday to extend a contract with the regional chamber of commerce worth $46,220. A little less than half of that will go toward federal lobbying, with the rest laid out for business recruitment services.

Council members met individually with Todd Mielke, GSI’s chief executive, over the past several weeks following a request earlier this summer to delay the contract extension so they could ask questions about specific services offered by the organization. The contract, which expired June 30, has been amended to require GSI to ask at least 70 area companies about Spokane’s business climate.

The information could then be used as the city looks to expand its business development and retention services, said City Councilwoman Amber Waldref.

“We could hear what businesses are saying about challenges to expansion, or why they like doing business in the city, and why they don’t,” Waldref said Monday at a meeting of the city’s Finance and Technology Committee.

Mielke said that in his discussions with City Council members, he pointed out the GSI contract focused specifically on business recruitment, but the organization provides many services including workforce development, retention services and supporting infrastructure. He said GSI is capable of providing those services if requested.

“Certainly, we want to partner with the city for economic development opportunities, not just for businesses wanting to relocate, but also businesses in our area,” Mielke said. “We should look at new businesses, but also businesses that are already in our area with a desire to grow.”

City Council members also required the contract extension include a clause that they would be notified if the federal lobbying firm they share with GSI takes action that “conflicts with the City Council’s federal legislative agenda.” The language was prompted by a dispute over the Spokane Tribe’s proposed casino and commercial development center on the West Plains.

The City Council initially opposed the casino project but later voted to take a neutral stance. GSI has opposed the project, saying it imperils training operations at Fairchild Air Force Base and makes the installation vulnerable to closure as the military cuts costs. The tribe has said it will start construction later this year following Gov. Jay Inslee’s approval.

The city pays GSI $3,000 monthly, which is forwarded on to K&L Gates, a global law firm with offices in the nation’s capital providing lobbying services. Most of that work is geared toward securing grants, Waldref said.

But in June, the firm billed GSI an additional $15,000 to research potential legal challenges to Inslee’s approval of the casino project. Attorneys at the firm were researching cases and developing strategies to appeal the approval within a week of the decision, according to an invoice.

Mielke described K&L Gates’ work on the casino approval as “a very vanilla explanation” whether there were any additional legal challenges that could be mounted after Inslee’s decision.

“It wasn’t to advocate one way or another,” Mielke said.

City Councilwoman Candace Mumm said she received the invoice showing the spending on the Spokane Tribe Economic Project appeal after asking for GSI to provide proof of the work K&L Gates had done on behalf of the city.

“We need to look at making sure they’re getting our stated policies on federal issues, so they don’t find themselves in this position,” Mumm said.

City Council President Ben Stuckart, who has been a vocal supporter of the STEP project, said the invoices showed the problem with GSI performing dual roles as a contractor for City Hall.

“You can’t be an economic development agency, trying to attract new businesses, and at the same time talking to current businesses and protect their interests,” Stuckart said.

Waldref said it didn’t appear that city money had been spent on the work relating to the casino project, but the language in the contract extension would ensure that didn’t happen.

Mielke said the lobbying contract was a good deal for the city.

“All I can tell you is, $3,000 a month retainer is on the extremely low end of what most firms charge in Washington, D.C.,” he said.

The contract extension will go to Mayor David Condon for his signature. The city intends to solicit bids for economic development services this fall, ahead of the expiration of the extension, City Council members and the mayor’s office said.