July 30, 2004 in City

Ex-manager of RPS gets $6.5 million

By The Spokesman-Review
 

The owners of River Park Square owe its former manager $6.5 million for work he performed on the downtown mall’s renovation, a Spokane Superior Court jury decided Thursday.

The seven-woman, five-man jury said companies affiliated with Cowles Publishing Co. should pay Bob Robideaux and his management firm the amount for extra work he did as project coordinator, project developer and construction manager of the $117 million renovation of the downtown mall.

The jury also said the mall developer breached written agreements and oral contracts with Robideaux, but declined to award damages on those issues.

Neither Robideaux nor Betsy Cowles, chairwoman of the publishing company and president of the mall development entities, would comment after the verdict.

“We’re very happy with the verdict,” said Robert Dunn, the lead attorney for Robideaux. “This should serve as a wake-up call as to how (the mall developers) should be dealing with the community.”

Cheryl Adamson, an attorney for the mall developers, said the verdict will likely be appealed.

“We continue to believe the developer fulfilled all of its obligations to Mr. Robideaux,” she said. Linking Robideaux’s breach of contract case to other suits involving the mall’s garage was “comparing apples to oranges,” she added.

Robideaux’s firm, RWR Management, was hired in 1989 to manage the downtown mall. In the mid-1990s, as the mall’s renovation was planned, negotiated with the city of Spokane, and built, he assumed an increasingly larger role in the project that includes a new Nordstrom, other shops and restaurants, a multiplex cinema and an expanded parking garage.

The city and the mall developers – affiliates of the company that owns The Spokesman-Review – formed a public-private partnership in 1997 to renovate the mall as a way to save a declining downtown. But shortly after the mall opened in 1999, the political winds shifted and a majority of the City Council was opposed to the project.

When the council refused to honor a city ordinance and loan parking meter money to the struggling garage, a tidal wave of lawsuits engulfed the city, the developers, different groups connected with the project and various consultants and advisers, including Robideaux.

His lawsuit is one of the more recent involving the garage, and revolved around whether he was paid enough for work he did as what was once described as Cowles’ “right-hand man.” The mall developer and RWR Management had written agreements to manage the mall and to coordinate some aspects of the project. The jury ruled the coordination agreement was not breached; the management agreement was breached, but the jury awarded no damages.

The jury also determined that the mall developers and Robideaux had an oral contract to reward him when the project was completed, but awarded no damages for the breach of that contract, either.

Instead, the jury determined that Robideaux’s company had performed extra services for the benefit of the developers for which he could expect to be paid. The value of those services was $6.5 million, the jury said.

Shawn Carney, presiding juror, said the panel was united in believing that Robideaux and his wife, Karen, were committed to the mall redevelopment project. None of the jurors questioned that Betsy Cowles was committed to the community or the project, either, he added.

“The only question was, were (Robideaux and his wife) properly compensated,” Carney said. “When it came down to it, they just weren’t.”

He recalled that Robideaux was shown pictures of the mall project on the stand during testimony, and was clearly emotional. “It was like he was looking at pictures of his grandchildren,” Carney said.

The real debate among jurors was how much money the developers should pay, he said. Experts had testified during the trial that the standard range for those services would be between 3 percent and 6 percent of the project’s total cost. They settled on 5.5 percent of the $117 million project.

A federal lawsuit that contends the city, the mall developer and others were involved in securities fraud for bonds sold to purchase the garage is scheduled for trial in January. The city has recently purchased bonds from the investors and plans to pursue those fraud claims if the other defendants won’t share the cost of a settlement.

Dunn said Thursday’s jury verdict could be “indicative of what’s going to happen” if the developers remain defendants in the upcoming trial. The mall developers treated Robideaux the same way they treated the community, he contended.

Adamson said the two cases are “completely unrelated,” and a breach of contract suit between two companies is not comparable in terms of the scope, the underlying facts or the law with a securities fraud lawsuit that has 14 co-defendants.

“Personalities won’t really come into play” in the securities fraud case, Adamson said.


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