River Park Square Won’t Go Away As Issue Candidates Still Debating City’s Role In Downtown Redevelopment Project

Even as River Park Square’s walls fall to a wrecking ball, Spokane City Council candidates keep debating the project’s merits.

The $100 million redevelopment of the shopping center - hailed by proponents as the first step to a revitalized downtown - is one of the campaign’s most contentious issues.

Two candidates point to the city’s involvement in the project as a sign that City Hall doesn’t listen to the people, that special interest groups rule, that neighborhoods are forgotten in the push to save two square blocks of downtown.

Three other candidates - including two incumbents - consider the public-private partnership vital to saving downtown. Without it, they say, downtown’s flagging sales tax revenues will continue to sink as more shops close, triggering further decline of the city’s core.

The redeveloped River Park Square is expected to open in mid-1999. It will include a new Nordstrom store, a multiplex, expanded parking, an atrium over Post Street and numerous shops and restaurants. Supporters say the project will create jobs, generate sales tax revenue and pump millions of dollars into the local economy.

The debate largely is focused on financing plans approved by City Council members - and their decision to approve one aspect of the plan as an emergency ordinance that prevented the possibility of a petition drive forcing a public vote.

The city is helping River Park Square’s owners secure a $22.65 million loan from the federal Department of Housing and Urban Development.

Council members also agreed to pledge city parking meter money to help pay expenses of a $26 million parking garage if it doesn’t pay for itself. They passed the plan as an emergency, saying further delays could jeopardize the project’s success - and, down the line, city revenues.

Council candidate Steve Thompson, an outspoken critic of the plan, said he can’t understand why the public is being asked to help a private developer.

One project opponent has bought newspaper advertisements urging voters to “Stop the Cowles gang!” by voting against supporters of the project.

River Park Square is owned by Citizens Realty Co. and Lincoln Investment Co., affiliates of Cowles Publishing Co., owner of The Spokesman-Review.

“The first thing every investor wants to know is: What is the return on my investment?” Thompson said.

Supporters say that’s easy - it’s all about jobs and money.

The HUD loan guarantee requires that the project create or retain at least 700 jobs.

Developers contend the project will create as many as four times that number. A 1995 economic study they commissioned said the project would create 2,800 jobs and generate more than $2.5 million a year in city taxes and $50 million in wages.

Thompson and mayoral candidate John Talbott criticize the current City Council for not putting the pledge of parking meter revenues to a public vote.

This year, $1.6 million in parking meter revenues went into the city’s $11.6 million street fund.

Talbott and Spokane residents Margaret Leonard and Dick Adams filed a lawsuit to stop the city’s involvement in the garage. The pending suit questions the council’s use of an emergency ordinance to move the project along.

The lawsuit has delayed developers’ plans to float revenue bonds to pay for the parking garage. Under an alternative plan, the developers would take out a private loan to pay for the garage.

Mayor Jack Geraghty said he has no regrets about the plan’s fast-track approval. “The only thing I would change would be to get it under way quicker. We need it now.”

Councilwoman Cherie Rodgers was the lone council member who supported a citizens initiative petition aimed at putting the use of parking meter revenues to a public vote.

Rodgers, a lukewarm supporter of the public-private partnership, has other concerns about the project, especially the use of community development dollars to back up the HUD loan.

“The Cowleses have put up no collateral for the loan, … so that falls back on the city,” Rodgers said.

That’s not true, said Betsy Cowles, president of both companies that own River Park Square. HUD officials require the developer to back up the loan with collateral other than the community development money.

While the specifics of that collateral still are being negotiated, they include the revenue from the Nordstrom lease, rent from the parking garage and a reserve account expected to reach at least $4.6 million by the year 2002, Cowles said.

“The bottom line is: There is collateral backing up the loan,” Cowles said, adding that community development dollars are the very last line of defense against a defaulted loan.

Geraghty also insisted that the community development dollars will be safe. “We’re looking at this as closely and precisely as a steely-eyed banker would,” he said.

Geraghty and Talbott frequently clash over the project, with Talbott saying his opponent has tunnel vision regarding River Park Square while he ignores the rest of the city.

Geraghty counters that redeveloping the shopping mall will be the catalyst for other downtown developments.

Talbott has said the HUD moneys would be better spent investing in the infrastructure of downtown’s east side.

But Mike Adolfae, the city’s community development director, said that’s just not possible.

The city can’t use the money any way it pleases, Adolfae said. “You’d have to reapply for a new project.”

During a debate, Talbott also questioned why the city had dismissed a plan proposed by Eastern Washington University to develop the east side and bring “high-visibility jobs and opportunities to the city.”

Geraghty countered that the proposal was an interesting class project in the school’s urban studies department, but it offered no funding options.

Terry Novak, director of the Joint Center for Higher Education, backs up Geraghty’s assessment. “This was a student project. There was no economic analysis,” said Novak. , DataTimes MEMO: These 2 sidebars appeared with the story:

1. UPCOMING This is the second of three articles about issues in the Nov. 4 city election. Monday: The proposed Lincoln Street bridge. Coming Wednesday: City Hall spending.

2. VIEWS ON PUBLIC-PRIVATE PARTNERSHIPS Here’s what candidates for mayor and City Council say about public-private partnerships for purposes such as downtown redevelopment: Jack Geraghty, mayoral candidate: “Whatever we can do within the law to further the economic means in the city, that’s a proper role for city government.” John Talbott, mayoral candidate: “If a project is a viable project, private enterprise will build it.” Cherie Rodgers, Council Position 1: “I favor them as long as the public doesn’t take any more of a risk than the private sector would.” Barbara Lampert, Position 1: Favors partnerships, especially when they’re aimed at revitalizing the city’s core. However, not a big fan of River Park Square redevelopment, largely because the project calls for increased parking downtown. Judith Gilmore, Position 2: Supports them but says developers and city officials should have done more to involve public - particularly neighborhood groups - in River Park Square project. Rob Higgins, Position 2: Supports them and is an avid fan of River Park Square redevelopment project. “The stronger your city’s core is, the better your city is.” Phyllis Holmes, Position 3: Strongly supports them. “Public-private partnerships are the way things are getting done all over the country. A local improvement district is a public-private partnership.” Steve Thompson, Position 3: Opposes them. “If I’m going to be used as an investor, where do I pick up my dividend check?”