September 17, 2008 in Business

City to pay Cloninger $7 million

Architect, partners agree to turn over property and drop lawsuit as part of settlement
By The Spokesman-Review
 

A Spokane architect and partners will receive roughly $7 million in exchange for their property south of the convention center and dropping a lawsuit against the city, under a deal the Spokane Public Facilities District board approved Tuesday.

Hashed out in negotiations last week, the settlement calls for the district to pay $116.50 per square foot for land owned by a group spearheaded by Glen Cloninger. The property consists of parking lots and one building on the south block along Spokane Falls Boulevard and Main Street.

Cloninger sued in December after the City Council gave the district authority to condemn the approximately 61,000 square feet of land, which it wants for a potential convention center expansion and more parking.

Meanwhile, the city’s separate lawsuit to condemn land on the block owned by Seattle-based Diamond Parking Inc. continues in Spokane County Superior Court. Diamond Parking’s attorney has moved for the lawsuit to be dismissed, arguing the city has not “jumped through the necessary statutory hoops” to pursue condemnation.

Last spring Cloninger said his property was worth $150 a square foot.

He did not return a call seeking comment Tuesday.

The agreement settles with the Cloninger Group, consisting of landowners Cloninger and his wife, Pamela; Cloninger, Reugh & Dewey; Corniche Investments; and Spokane Group Partnership.

The city for decades has sought property on the block, which currently contains surface parking and a bar, The Blvd. The city and the district already owned several parcels there.

Settling with Cloninger saved the city time and money, said district Executive Director Kevin Twohig.

“We were looking at a very long, very expensive run to get this accomplished,” he said. “And I think we’ve taken 18 to 24 months out of the process by reaching this settlement and (saved) all of those attorney’s fees.”

The deal also blocks private development on the site, which owners had marketed for a possible hotel. The case “clearly demonstrates” why cities need public facilities districts, Twohig asserted.

The district will use some of its $32 million in reserves for the purchase, Twohig said.

Under the settlement, the district “acknowledges that approximately $4 per square foot of the total payment is for architectural work performed over the years.”

It also states the city will “hold a press conference and issue a press release whereby Mr. Cloninger is thanked and apologized to appropriately.”

The district has not offered to settle with Diamond Parking, said Bob Dunn, the parking company’s attorney. He contended the city does not have a specific project planned, and Diamond Parking is not interested in selling just to see its parking replaced by a city-owned lot.

“The city of Spokane shouldn’t be in the parking business,” Dunn said. “We already know that from another parking facility (River Park Square).”

A draft update to the downtown plan names a Spokane Convention Center expansion as an “opportunity site.” Also, the district recently put out a request for bids for master planning and conceptual design of the south block.

Board members declined to comment on the Diamond Parking lawsuit. A hearing on a request to dismiss the suit is scheduled Friday.

It is unclear what will happen with the The Blvd. building, 333 W. Spokane Falls Blvd. Twohig said he does not expect action until after the master plan is finished, and Cloninger had told him the business was on a month-to-month lease.

Reach Parker Howell at (509) 459-5491 or parkerh@spokesman.com.


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