Politics and a parking garage: Lessons of RPS

The main lawsuit over the River Park Square garage ended last week with a fizzle, not a bang, as the Spokane City Council accepted a $4.25 million settlement offer.

That doesn’t mean the controversy is resolved.

Because the project is viewed so differently by the two main factions in city politics – populists and progressives – it may be years before full resolution is possible.

They’ll agree that mistakes were made and lessons should be learned. But after nearly 10 years of discussion and dissension, hundreds of thousands of pages of court documents, and tens of millions of dollars in legal fees, they will still point to different mistakes and preach different lessons.

Populists will continue to say the city got hustled from the get-go, signed a bad deal and will be paying the costs for years to come.

Progressives will say the city did what was necessary to save downtown, only ran into trouble when it went back on its word and will be paying the costs for years to come.

Like nothing in recent memory, River Park Square has fueled debate in a city where party labels don’t mean much. Elective offices are nonpartisan, and people are more likely to insist “I don’t vote for the party, I vote for the person.”

Spokane government traditionally seesaws between populists and progressives. The former, who generally have a resume of community activism and want the city to pay more attention to the neighborhoods, have included Mayors Sheri Barnard and John Talbott, former Councilman Steve Eugster, and currently are best represented by Councilwoman Cherie Rodgers.

The latter, who generally have a resume of business or professional activism and want the city to adopt a more businesslike approach to government, have included former Mayors Vicki McNeill and Jack Geraghty and former Councilwomen Roberta Greene and Phyllis Holmes.

Progressives got the city into River Park Square in the mid-1990s. They worried that major retailers would soon abandon downtown, and with them would go the sales tax shoppers pay on purchases. They grabbed for the only real lifeline they were being thrown, the renovation of a 20-year-old mall.

Whether they had other options, or the mall needed the renovation being proposed or it could have been done for less or differently or with other people’s money – and a dozen other questions that were argued then and have been argued since – can’t be settled in this space. The point is that the people who owned the mall came to the city with an idea and city officials agreed to talk about it.

The mall owners also own Cowles Publishing Co., which owns The Spokesman-Review, which creates a different set of problems that also can’t be settled in this space. The Cowles family no longer sees River Park Square stories before they are published. Readers can believe that or not; it doesn’t much matter for this article.

Much of the talking involved the garage, which would be sold to raise money for the overall project.

City officials knew bupkis about garages, so they did what progressives always do: hired experts and paid for studies. The studies gave them ammunition to say the project should work – one rumor, which may be apocryphal, has a city official calling the garage a “cash cow” – and they tinkered with the deal until everyone was satisfied. Or at least not so dissatisfied that neither the city nor the mall owners told the other to take a walk.

From the beginning, populists raised concerns about the cost, the adequacy of the studies and the amount of attention being directed to one small part of the city, downtown, when the neighborhoods had problems with traffic, growth, crime and poverty. Progressives, including some who wrote editorial columns for this paper, unfairly derided them as “naysayers.”

By early 1997, the mall owners and some of their business allies, who are also progressives, began to say the whole thing was in danger of being studied to death. It was time to stop holding meetings, shut up and vote. Because they had six votes on a seven-member council, the result was not surprising.

Talks continued on various aspects of the deal, but whenever problems began to boil, they kept it contained with closed-door negotiations and promises of confidentiality, which they rationalized as being for the good of the project, which to them was the same as the good of the community.

The populists continued to predict the project would not work, but no one really knew one way or the other until it opened. When it did open in August 1999, garage revenues were far below the experts’ predictions.

There was also a key political shift that fall. Populists captured a majority on the council and forced through two government changes that had languished for decades – a strong mayor system and districtwide council elections.

The next spring, the new populist majority balked at a loan of parking meter money to shore up garage finances that were far off the experts’ estimates. Their progressive predecessors had promised such a loan, writing it into a city ordinance to prove their sincerity to Wall Street, but never really thought it would have to be made.

The populists came at a loan they didn’t want to make from a different direction: If it couldn’t be paid back, it wasn’t a loan at all, but a gift, and state law doesn’t allow cities to make gifts. Lawyers and others warned them that Wall Street would look unkindly on such a move, but those people had all worked for the progressives, so how could they be unbiased? They refused the loan in 2000 and before long everyone was stuck in River Park Square litigation like mammoths in the tar pit.

For all the lawsuits that were filed – at one point there were at least 10 – only the federal lawsuit filed by garage bondholders ever went to trial. By then, the bondholders weren’t even part of the case. They’d been bought out by a city controlled by the other movement in city politics, the pragmatists.

Like the populists and the progressives, the pragmatists want better streets, less crime and fire engines that arrive when the house is burning. Pragmatists don’t usually run for office, content instead to supply the margin that lets populists beat progressives, or vice versa, by guessing who can best deliver the goods in this election.

Mayor Jim West got elected on a pledge to solve River Park Square; many members of the council that approved the settlement Wednesday had become pragmatists on the garage, talking about paying the price, learning the lessons and moving on.

Moving on means learning the lessons, and here are some lessons the city needs to learn:

“ The experts can be wrong, and the fact that they have impressive credentials won’t keep them from making impressive mistakes. Walker Parking Consultants, which created a report that became the basis for many future studies and the sale price of the garage, was always described as one of the nation’s top parking experts. It thought the garage would earn $4 million its first year; the garage earned about half that.

“There is no such thing as too much public participation in a “public-private partnership.” Mall developers bemoaned in 1996 a history of holding dozens of hearings and scores of presentations on the project. But the details changed constantly, almost up to the day the city approved it, and the public had trouble keeping track. Then the consortium of public and business officials kept changing it, and at one point went out of their way to hide some of those changes from their critics, from the public and from the news media.

“A written pledge is tough to get around, even if you think it’s a bad one and not of your making. Think of what the populists on the council did in 2000 as akin to playing dealer’s choice poker, where someone else called the game of five-card stud, deuces wild. The city may have been dealt a royal flush, but someone across the table was showing four deuces up, for an automatic five of a kind. The city could have folded and anted up for a new hand – that is, made the loan and sued its former partners for roping it into a bad deal – instead, the council raised and demanded a rule change. They lost.

“Lawsuits take a long time and rarely create winners. Then-Mayor John Powers greeted the bondholders’ lawsuit in 2001 with great enthusiasm, saying it would be more likely to force a universal settlement. Instead, it wound down to a type of last-man-standing contest. The garage bondholders were paid off, but that just meant they stayed even on their investment. Everyone else spent millions on court costs, lawyers fees and settlements.

“Litigation doesn’t vindicate positions, salvage reputations or even prove you are right. Populists seemed to be expecting the federal trial to have the drama of “Inherit the Wind” and the conclusiveness of “Perry Mason.”

By the time it started, the case had morphed from a grand fraud and conspiracy case – the problems the populists always suspected – into a claim of negligent legal advice. Great revelations were missing among the four witnesses to take the stand before the settlement was announced. When John Dorsett, the chief author of the 1996 Walker Parking study, took the stand, no lawyer from either side bothered to ask the question that has plagued Spokane for nearly a decade: “How could your revenue projections be so wrong?”

“The answers are out there, but you might have to work hard to get to them and they might not be everything you hope. Hundreds of thousands of pages of documents were compiled for the many court cases, and they contain the sworn statements of almost everyone connected with the River Park Square deal.

In wading through those documents, it is possible to find the answer to the question Dorsett was not asked on the stand. It’s pretty logical, although it doesn’t fit into any grand conspiracy theory: The project that Spokane got was not the same one his company studied. The mall opened late. And only partially full. And with different parking rates that essentially gutted the money Walker said would come from theater patrons. So why wouldn’t the revenues be different?

“Don’t assume things will go right. Assume they will go wrong. On River Park Square, the latter was almost always true. The progressives on the council, the developers and their supporters may have believed with all their hearts that the mall would be a success and the city’s parking meter money would never be at risk. In depositions they say they knew it might happen, but they always acted like it wouldn’t. Things might have been different if they talked and acted like everything could go to hell, and been pleasantly surprised if it didn’t.

“Blame is for God and small children, as Dustin Hoffman told Steve McQueen in “Papillon.” Populists blame the progressives for signing a bad deal, and some will probably never set foot in the mall or the garage. Progressives blame populists for refusing loans from the parking meter money, and credit all manner of downtown redevelopment to the mall in a way that balances the books for the civic costs of the River Park Square garage.

Each is reluctant to admit that the other has a point about what got Spokane stuck in the tar pit. When that happens, maybe then the controversy will be resolved.