Davenport Owner Files Lawsuit Over Wwp Spill Ng Claims Leaked Oil Thwarted Chances To Finance Renovation

The owner of the Davenport Hotel slapped Washington Water Power Co. with a lawsuit Thursday, claiming the utility’s downtown oil spill nixed a loan that could have renovated the hotel by now.

Filed in Spokane County Superior Court, the lawsuit doesn’t cite specific damages, but the Hong Kong owner of the massive landmark hinted he will ask for millions of dollars.

“The simple fact remains that the oil is still present and results in the halting of our effort,” Ronald Wai Choi Ng said to a small crowd in the Davenport lobby. “When WWP’s mess is cleaned up, hopefully, bankers will be eager to take on this important project.”

WWP spokeswoman Judy Cole said the company was disappointed with news of the suit. “This is a time for the community to come together, not tear apart.”

The lawsuit, which comes after almost two years of rancorous relations between Ng and WWP executives, also irked members of Spokane’s business community.

Gordon Budke, president of Momentum, asked Ng after his speech if he has even tried recently to get a local loan for the project. Budke said Ng “ducked” his question.

Budke said bankers assure him the oil spill shouldn’t spoil the project: “If the project makes economic sense financing should be available.”

Ng said his company, Sun International, has already spent $12.5 million on the Davenport. He said he will continue to renovate the hotel “out of pocket” until the lawsuit is resolved, hopefully within two years.

The international hotel and gold mine owner had a retort for local bankers who have insinuated the oil spill shouldn’t foil his efforts.

Ng said he would fly to China and buy the finest red silk carpet and roll it out on the lobby floor of the Davenport to greet them if they offered to financed his project. “I would welcome any banker with open arms.”

Ng has said that when he bought the hotel in 1990, he believed he had a financing agreement with some Spokane bankers. The deal collapsed and Ng felt betrayed.

The bankers blamed the national savings and loans crisis, and Ng’s inability to provide a conventional financing package for them to evaluate.

Ng, who has run his own independent spill analysis, would not discuss Thursday his evidence of financial loss, or oil contamination of Davenport property.

The lawsuit notes the oil has polluted the hotel’s vacant property across First Avenue where a parking garage is planned. It also states the oil possibly contaminated the hotel site, too.

The Department of Ecology has received no evidence so far that any of the oil has contaminated the hotel grounds.

WWP’s Cole said the company has spent $2 million studying how best to handle the spill - culminating in a proposal to the state Department of Ecology to dam the oil along First Avenue and remove some oil from the ground.

She also noted WWP has protected property owners against financial losses caused by the oil spill with an indemnity agreement.

The agreement was reviewed by Spokane bankers, said John Wagner, Seafirst Bank vice president. “My opinion would be that that significantly reduces the impact that oil spill would have on any loans in that area,” he said.

Ng said he filed suit Thursday because his Seattle attorneys told him time was running out.

He had up to two years to file a suit from when he first learned of the spill - Aug. 27, 1993 - when a story about the spill ran in The Spokesman-Review.

But the hotel owner has been openly considering a suit since early 1994 when Ng reported he was ready to begin renovation. He had a Swiss bank poised to loan $19 million to finish the project before it learned more about the spill, he said.

Ng sent attorneys to Spokane in June from Preston Gates and Ellis, the Seattle firm that filed the suit. They questioned at least two Spokane businessmen, asking for details about the history of Ng’s acquisition of the hotel, and if Ng could get a fair trial, taking on the region’s big utility in a Spokane courtroom.

Last week, Ng hired Kip Nedved, of Nedved Advertising, to handle public relations for him in the city.

The lawsuit states that the oil spill not only cost the hotel owners a loan, but also reduced the value of the hotel and delayed its renovation and reopening.

“WWP failed to warn the Davenport Sun of the Oil Spill,” the suit states, noting the spill has “caused annoyance, injury and endangerment to the comfort, repose, health and safety of the Davenport.”

The oil spill was first detected in 1982, when workers noticed oil seeping into the elevator shaft of WWP’s aging steam plant - between First and Second and Lincoln and Post.

WWP’s initial investigation of the spill determined that it had been blocked by the Burlington-Northern railroad abutment, and only amounted to about 1,300 gallons.

The utility’s studies during the past year discovered about 75,000 gallons of oil had seeped at least 400 feet north of the steam plant. WWP officials believe the plant was likely a chronic leaker for decades.

The utility’s tentative plans, being reviewed by the state, call for inserting an underground wall along First Avenue that prevents the gooey, slow-moving oil from crossing the street to the Davenport and beyond.

Davenport geologist Peter Mills said the plan is fine as part of a larger cleanup plan, but not a resolution of the problem. Mills said the plan should call for more removal of oil, but conceded, “It’s not necessary to dig it all up.”

Ng reiterated throughout his speech that his company is committed to finishing the Davenport. He called it an “expensive love affair.”

, DataTimes ILLUSTRATION: Color Photo