March 31, 1998 in Nation/World

Council Approves Loan River Park Square Awaits Word From Hud

By The Spokesman-Review
 

In a decision that left little room for surprise, Spokane City Council members on Monday voted 5-2 to approve a $22.65 million federal loan to the developers of River Park Square.

Testimony given at two public hearings last week convinced a majority of the council it was time to move ahead, they said.

“By a 10-1 margin, citizens are telling us to get on with it,” said Councilman Jeff Colliton.

“There comes a time when we have to make a decision,” said Councilwoman Phyllis Holmes. “I say it’s time to vote.”

Mayor John Talbott and Councilwoman Cherie Rodgers cast dissenting votes, saying they didn’t feel comfortable voting before the final loan documents are completed.

“I can’t support voting on a draft,” Rodgers said.

The $110 million redevelopment of River Park Square includes a new Nordstrom, a multiplex theater, expanded parking, and numerous shops and restaurants.

The city is helping the shopping center’s developers secure a $22.65 million loan from the U.S. Department of Housing and Urban Development. The money will be loaned to the city, which then will loan the money to the developers.

Monday’s vote gives City Manager Bill Pupo the authority to sign off on the loan documents once they earn HUD’s final approval.

HUD gave the loan preliminary approval in July, and city officials don’t expect the details to change substantially. If they do, the paperwork must come back to the council for approval.

Final word from HUD is expected by the end of April.

Three sources will go toward paying the annual $2.5 million debt service on the federal loan. Those include base and percentage rents paid by Nordstrom, a $500,000 annual guarantee from the developers, and a percentage of the rent paid to developers for the land beneath the parking garage.

Collateral for the loan includes a $1.05 million reserve account that is expected to grow to $5 million by the fifth year. It also includes the Nordstrom building and lease, the percentage ground lease payments for the parking garage, and the $500,000 corporate guarantee.

If the project should fail and the city defaults on the loan, Spokane Community Development Block Grant could be used for repayment if the collateral is insufficient. No city ever has used its block grant money to repay a loan.

The controversial project has been debated for more than three years.

Supporters say the plan will create jobs, increase tax revenues and save downtown from further decline. Opponents say private interests should pay the entire cost, calling the city’s involvement corporate welfare.

Outside City Hall before the meeting started, project fans and critics waved dueling signs at passing motorists. “Keep downtown alive,” read the sign from supporters. “Let the people vote,” read one of the opposition’s signs.

Prior to voting, council members spoke for nearly 45 minutes about why they supported or opposed the plan.

Councilman Orville Barnes summed up the types of people who spoke in favor of the loan during two public hearings held last week. They included small and big business owners, union representatives, neighborhood activists, Chamber of Commerce members, and commercial and residential developers.

He scoffed at critics who called the plan corporate welfare, saying “Welfare is where you don’t have to pay something back.”

Holmes took a jab at developer David Sabey, owner of NorthTown Mall and one of River Park Square’s most vocal opponents. Saying some critics feared change, “there are others who would simply do anything to derail this project to further their own agendas,” she said.

Rodgers said she wanted the public to know details of the loan considered proprietary by the developers and the city.

Talbott said he still had questions about the city’s involvement with the parking garage. The city has pledged its parking meter dollars as a backup source to pay land rent and maintenance and operation on the renovated and expanded garage.

After the vote, Betsy Cowles, president of the two companies that own River Park Square, said she was greatly relieved by the decision.

“I’m glad to have this part of the project done,” she said. “It’s clear the community is behind us.”

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

, DataTimes MEMO: This sidebar appeared with the story:

THEY SAID IT

Orville Barnes: “Critics call this corporate welfare. It isn’t welfare. Welfare is where you don’t have to pay something back.”

Jeff Colliton: “As elected officials, we are elected to make critical, often controversial, decisions. This is one of those.”

Rob Higgins: “Let’s get on with it. Let’s get this project going.”

Cherie Rodgers: “I support this project. I do support downtown. In good conscience, I can’t vote on a draft document.”

Roberta Greene: “People will say to us, ‘Why aren’t you listening to the people?’ and we did. But they’ll still say, ‘Why aren’t you listening to the people?’ An answer that you don’t like doesn’t mean it’s a wrong answer.”

Phyllis Holmes: “What we are doing here is determining the future of my birth city … We have an obligation, not just to the citizens of the city of Spokane, but Spokane County and outlying regions, to keep downtown vital.”

John Talbott: “When the vote is taken, we are 1,000 percent behind making it work. We must be because we as a city must make it work.”

- Compiled by Kristina Johnson

This sidebar appeared with the story: THEY SAID IT Orville Barnes: “Critics call this corporate welfare. It isn’t welfare. Welfare is where you don’t have to pay something back.” Jeff Colliton: “As elected officials, we are elected to make critical, often controversial, decisions. This is one of those.” Rob Higgins: “Let’s get on with it. Let’s get this project going.” Cherie Rodgers: “I support this project. I do support downtown. In good conscience, I can’t vote on a draft document.” Roberta Greene: “People will say to us, ‘Why aren’t you listening to the people?’ and we did. But they’ll still say, ‘Why aren’t you listening to the people?’ An answer that you don’t like doesn’t mean it’s a wrong answer.” Phyllis Holmes: “What we are doing here is determining the future of my birth city … We have an obligation, not just to the citizens of the city of Spokane, but Spokane County and outlying regions, to keep downtown vital.” John Talbott: “When the vote is taken, we are 1,000 percent behind making it work. We must be because we as a city must make it work.” - Compiled by Kristina Johnson


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