Spokane City Council President Dennis Hession on Monday unveiled a plan to save the Rookery and Mohawk buildings downtown by having the city purchase the properties for $4.75 million and resell them for private renovation.
Hession’s plan quickly gathered support from a crowd of nearly 100 preservation advocates who turned out at the City Council meeting to push for city intervention to stop demolition of the two historic structures at Riverside and Howard. The sales price was negotiated by Hession in a pair of private meetings with property owner Wendell Reugh.
Developer Ron Wells, who has sought to buy the buildings and who has a track record of successful historic redevelopments in Spokane, said the price reached by Hession and Reugh was $800,000 lower than Reugh’s asking price during negotiations in recent months.
Former Mayor Sheri Barnard, who was a key leader in a nearly two-decade drive to save the Davenport Hotel, told council members that leadership requires vision. “I beg you to take this opportunity to save these two great buildings,” she said.
Wells told the council, “I think this is a great solution all the way around.”
Hession asked other City Council members to approve a resolution endorsing the city purchase through a loan from a solid waste reserve account or other city funds.
However, council members Mary Verner and Al French said they wanted at least one week to consider details of the purchase and ensure that the city is not taking unnecessary risks. They won a motion deferring a vote until Monday.
Verner said she wants the deal structured so that the purchase could be done at the same time the city receives proposals from developers for buying what would become surplus city property.
Demolition of the 1934 Rookery and 1915 Mohawk buildings began last Wednesday, but was halted on Thursday after Hession and Reugh met to discuss city intervention. Hession said he could not bear to consider a paved parking lot replacing the continuous historic building facades along Riverside Avenue.
While Wells has been in discussions about purchasing the property for nearly two years, another developer, Daniel Stark, said during Monday’s testimony that he, too, would be interested in a purchase. Wells’ plan calls for a mix of residential and commercial uses.
Hession said the council delay of one week leaves the buildings at risk, but he expected Reugh to view council deliberations as a sign there is political support. A series of other Reugh-owned buildings along Sprague Avenue, including the 1890 Merton Block building, were demolished a year ago.
Reugh’s property manager, Steve Gill, said in a brief interview Monday night that he expects Reugh to be patient.
The advantage for Reugh is the city’s offer brings a certainty of cash, while previous proposals reportedly had Reugh carrying a contract that delayed payment.
Also, the city would acquire the land “in lieu of condemnation,” a process that might offer the Reugh family tax benefits if it decides to reinvest in other real estate.
Reugh last Thursday told Hession he wanted $5.1 million for city purchase. Hession said Reugh agreed to drop the price by $350,000 during a meeting over the weekend.
If the city’s solid waste fund is tapped for purchase, then the fund would have to be repaid with interest, according to Hession’s resolution. The council could issue its own limited general obligation bonds, also known as “councilmanic” bonds, to repay the solid waste reserve if the city continues holding the property beyond six months.
Mayor Jim West, in an interview Monday, said he may support a purchase plan, but didn’t commit himself. Critics quickly pounced on the purchase plan. Bob Byrne, who supported a property tax measure that voters approved last week, said he doesn’t want a city purchase to threaten police and other basic city services. “I’m absolutely against it,” he said.
Councilwoman Cherie Rodgers said she doesn’t want to put taxpayers at risk, even though she supports historic preservation. Council members also said they want to avoid pitfalls like the failed city partnership in River Park Square’s redevelopment and parking garage operation.
Hession said the proposed purchase and sale for private redevelopment is completely different than the intricate RPS garage deal, for which the city participated in $31.5 million in tax-exempt financing.
Gary Lauerman, a longtime member of Spokane Preservation Advocates, said redevelopment of the Rookery Block is an economic development issue. “I hope those of you who are reticent about this will come to see that,” he told the council.