March 29, 1998 in City

Mayor’s Duties Do Not Include Blowing Smoke

By The Spokesman-Review
 

Does anybody have a fan?

Smoke needs to be cleared from Spokane City Hall, smoke mostly being blown by the new, anti-downtown mayor, John Talbott, and his pals from Seattle.

Ninety days into his term and on the eve of the City Council’s much-needed vote to accept a loan from the U.S. Department of Housing and Urban Development that should send a downtown revival into high gear, the new mayor is furiously trying to fan any spark that could stop the River Park Square project that is the centerpiece to the revival.

Manning the bellows with him is the Seattle-based Sabey Corp., which contributed mightily to Talbott’s election and has a financial interest in seeing downtown Spokane dry up in the hope that more people will shop the Sabey-owned NorthTown Mall.

Civic smoke alarms should be going off.

This isn’t leadership. This is civic terrorism.

At this critical time Talbott again went against the wishes of the majority of the City Council and sent a letter to HUD a few days ago opposing the HUD loan to Spokane a loan that has been given under a program used by hundreds of other cities to redevelop their downtowns without a single default.

The mayor urged HUD not to lend to Spokane because, “this project could absorb at least the next five years of our community development block grant funds pledged to it.”

The mayor is blowing smoke.

“There is no impact on community development block grants that I can see,” said Mike Adolfae, the man at City Hall whose job it is to track these grants.

Community block grants help fund the East Central, West Central, Northeast and Peaceful Valley community centers. Last year, $429,000 in federal community block grant money was directed to these four community centers.

Talbott’s letter implies that five years of Spokane’s community development grants might have to be used to pay back the HUD loan. That would be a $2.12 million hit. If true, it would hurt.

But it isn’t true.

Adolfae ran the numbers.

He looked at the loan payment guarantees from the developer and the retailers in the downtown project that will be used to repay the HUD loan. The money to repay is all there and then some.

More than that, if the project is even a modest success, the net result to the city will be the repayment of the $22.6 million HUD loan without any local tax dollars or parking meter revenues, plus an additional $1.4 million in new tax revenues each year for 20 years, the creation and retention of 676 jobs, and a $50 million payroll for Spokane. And, the garage built from the HUD loan will then be owned by the city and can generate millions more.

Yeah, the mayor asks, but what if the sky falls in?

Adolfae took that gloomy idea and ran a “worst case” scenario:

Nordstrom falters and developers can’t keep a high-quality tenant list.

Other retail spaces around Nordstrom begin to go vacant. Tenant leases have to be reduced.

The $500,000-a-year reserve fund backed by the developers has to be tapped beginning in the year 2007 when the big money becomes due on the HUD loan.

What happens to the HUD loan repayment schedule?

“At the very worst the city of Spokane would be at risk for a total $14,358 in the year 2016,” Adolfae concluded. “We’re looking at basically a very secure, risk-free loan to the city.”

If the mayor is so worried about the possibility of a $14,358 shortfall in community development money 10 years from now maybe he should forgo that new car he asked for last week. The price of that car would cover any shortfall in 2016.

Rest assured, the new mayor will keep looking for reasons to kill the downtown project. The people who paid to get him elected will demand that of him.

The mayor will say the project is being pushed through too quickly.

Smoke again.

More than 200 public meetings and three years of process are behind this work.

The mayor will say he wants an independent market feasibility study.

More smoke.

There are plenty of independent market feasibility studies on this project. Nordstrom did one. The AMC movie people did one. The bank lending the money for the project did one. After all, these folks aren’t going into this project as a charity to Spokane.

When some of the best retailers and bankers in the country have looked at this project, analyzed the Nordstrom store’s incredibly positive impact on the retail picture in all of Spokane (including a big boost to NorthTown and dozens of smaller businesses in the downtown core) they signed on.

In the clear, smoke-free light of day, it’s obvious Spokane has a rock-solid, low-risk opportunity to generate more tax revenues, bring in more jobs and save downtown.

It’s also obvious that the new mayor is out to cut the heart out of the very city he was elected to represent.

, DataTimes MEMO: Chris Peck is the editor of The Spokesman-Review. His column appears each Sunday on Perspective.

Chris Peck is the editor of The Spokesman-Review. His column appears each Sunday on Perspective.


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