Spokane’s Carlyle Hotel sold to Portland investors

Once a potential home for the next model of the House of Charity, the former Carlyle Hotel instead has been purchased by a group of investors from Portland.

The group led by Rudy Munzel, owner of Ascent Design Build, recently purchased the building at 206 S. Post St. for $2.14 million from Seattle-based nonprofit Pioneer Human Services.

Hilary Young, vice president of advocacy and philanthropy at Pioneer, said in an email that her organization, which has provided low-income housing at the building for the past 13 years, could no longer financially support that program.

“The program had incurred significant losses over the last 13 years and it was unsustainable,” Young said in an email.

Rob McCann, president and CEO of Catholic Charities of Eastern Washington, said his organization looked at the Carlyle for three days before Ascent Design Build stepped in with an offer.

“The Carlyle is one of about five different locations that we have looked at and explored in the past three years as possible sites to do a new level of trauma-informed care for those experiencing homelessness in Spokane,” McCann said in an email.

He said the idea was to convert the seven-story former hotel, which has about 74 units, into something similar to the Catholic Charities Eastern Washington Catalyst project, which created transitional housing in a former Quality Inn. It opened in December 2022 for about 100 people.

“Within only days of first exploring it as an option with the city of Spokane, we heard from other downtown stakeholders that they felt the location was too close to the downtown core,” McCann said. “Within a few days from that moment, we learned that another offer for the Carlyle had already been tendered, and it was a much more attractive offer, on a faster timeline for the owners than anything we could provide.

“At that point, we abandoned any pursuit of the Carlyle as a viable option for Catholic Charities.”

Reached Friday, Munzel said he was traveling and unable to discuss his group’s plans for the Carlyle.

But he told the Spokane Journal of Business that he and his group’s plans for the next two years will honor the existing agreement to keep 51% of the units for low-income tenants.

“Our long-term goal, after these agreements burn off, is to gradually move it into market-rate housing,” Munzel told the Journal.

Built in 1892, the seven-story Hotel Carlyle had fallen into disrepair by 2000, when Jim and Fay Delegans kicked off a $12 million renovation. Debt from the upgrade hampered the Carlyle, and U.S. Bank foreclosed on the building in 2006.

The City of Spokane purchased the building that year and began looking for buyers willing to uphold the Carlyle’s mission. A series of unsuccessful bids followed. Then, in late 2010, Pioneer made an offer of $3.46 million.

The nonprofit bought the building the next year after lowering its bid to $3.2 million.

Munzel said the building will require upgrades, including to the heating and cooling systems.

“A building at that age always needs investment, so we’re going to be investing hundreds of thousands of dollars in upgrades for mostly equipment. The units are not in bad shape, and there’s been a lot of upgrades in the building,” Munzel said.

While the Carlyle may be getting renovated to potential new uses, it leaves McCann continuing to find a solution for the community it supports.

“Having looked at multiple sites in recent years, with none of them coming to fruition, demonstrates how difficult it is to locate any social service facility or housing of any kind, in any part of the Spokane region,” he said. “Unfortunately, we live in a moment in our country and in our community when virtually any proposed social services facility, especially ones that could serve persons experiencing homelessness, are immediately met with opposition from virtually every neighborhood or area that we explore.”

He called that opposition “heartbreaking.” Catholic Charities has 2,600 apartment units for lower-income people and families in central and Eastern Washington, according to the organization’s website.

McCann also noted that Catholic Charities added four new housing projects this year that are fully funded and are in progress.

“We continue to look at all options and all locations, and we will continue to serve the poorest of the poor in our community in the most trauma-informed way that respects both the people we serve and the neighborhoods in which we operate,” McCann said.