Spokane may have buyer for Carlyle

The city of Spokane believes it has found a buyer for the downtown housing complex it took over last year to prevent displacing dozens of people with mental disabilities.

Spokane has owned the Carlyle Care Center, 206 S. Post St., since purchasing it last year for $3.2 million.

Officials had hoped to have the building sold by now. But when the city first tried to sell it, officials turned down two offers. They opened a new round of bidding in the spring and received three offers.

On Tuesday, city officials announced they would try to enter into a sales agreement with Peter and Candice LaPlante, who operate two other care centers in Spokane County. The LaPlantes submitted a $3.44 million bid on the building.

“It’s one of the treasures of this town for the mental health community,” said Peter LaPlante, who moved to Spokane with his wife 17 years ago. “We will continue the care for mental health clients in a safe environment.”

The couple also submitted a bid in the first round, but city officials said they didn’t provide all the information that was required.

The LaPlantes operate Mallon Place, 1724 W. Mallon, and Bethany Place, 9111 E. Upriver Drive.

Jim and Fay Delegans began an extensive remodeling project at the Carlyle in 2000, converting the old flophouse into a care center widely praised by mental health advocates. However, they were unsuccessful in making it financially viable and accrued more than $12 million in debt.

The city bought the Carlyle from U.S. Bank, which had foreclosed on the building.

Without the burden of debt payments, Spokane has been able to generate about $5,000 a month in revenue above the Carlyle’s monthly expenses, which include a $15,000 monthly payment to an outside company to run the facility, said Allen Schmelzer, a city planner who has overseen the Carlyle.

The city’s lowest possible selling price, which matches the LaPlantes’ offer, is meant to recoup all its costs.

“We’re preserving a facility that otherwise may not have been preserved through the bankruptcy,” said Spokane Chief Operating Officer John Pilcher.

The Carlyle is licensed to provide care for 138 people. About 125 live in the building. That’s more than when the city took over the building last year.

Delegans had hoped to get the building back and submitted bids both times the city asked for them. His most recent bid was equal to the LaPlantes’. But while the LaPlantes pledged cash, Delegans proposed making monthly payments for three years before paying off the rest.

The highest bid, $4.4 million, came from a joint venture including Medistar Corp., a Texas firm specializing in health care construction. The bid proposed to remodel the building into a psychiatric hospital.

Schmelzer said conversion would have displaced Carlyle residents at time when the city is dealing with many other evictions of low-income tenants downtown.

“From the city’s perspective, it wasn’t viable to look at that option now,” Schmelzer said.