May 30, 2009 in Business

Worthy expansion

Davenport owners add to hotel holdings with purchase of Lusso
By The Spokesman-Review
 
Colin Mulvany photo

Walt and Karen Worthy, owners of the Davenport Hotel, purchased the boutique Hotel Lusso at 1 N. Post St. this week for an undisclosed amount.
(Full-size photo)

Another landmark sold

Another Spokane downtown landmark, the Flour Mill, has changed owners. Northern California owner Maxwell Drever, who has owned the seven-story building along the Spokane River for nearly 30 years, concluded a sale of the historic mill’s bottom four floors.

The buyer is Morca Investment Co., of Fresno, Calif.

The sale price for those four floors was $4.35 million, said Steve McIntosh of Kiemle Hagood, who represented Drever.

Floors five and six, primarily office space, were sold off separately as “office condos” more than a year ago, McIntosh said. The seventh floor is also for sale by Drever.

Morca’s principal owner, who did not want to be identified, plans to maintain the mix of retail and office space. The anchor tenant is Clinkerdagger restaurant.

One option being considered is converting the vacant main floor into an event center, McIntosh said.

The owners of one of Spokane’s best-known hotels have bought another historic downtown inn.

Karen and Walt Worthy this week purchased the Hotel Lusso, at 1 N. Post St.

The building is directly opposite the Davenport Hotel, which the Worthys own and operate.

Walt Worthy said he has no plans to change the name of the Lusso or the way it’s run. The hotel’s separately managed restaurant and bar also will remain.

His hope is that the Davenport’s marketing team will make it easier for the Lusso to book more leisure and business travelers.

The amount the Worthys paid to Lusso owners Joe and Mary Z. Dinnison wasn’t disclosed.

At its last Spokane County assessment the Hotel Lusso was valued at $3.24 million. The sale included an excise tax exemption involving a deed in place of foreclosure – meaning the Dinnisons face a possible default on a loan or contract.

The Dinnisons have been looking to sell the Lusso for more than two years. Joe Dinnison’s job is executive director of the Whitworth University Foundation.

While talking with the Dinnisons in recent months, Worthy said, “we’ve been toying around with whether it made sense to buy it. Well, obviously we were the right choice and we wound up with a figure that was agreeable to both of us.”

The purchase adds 48 rooms to the Davenport inventory. The main Davenport Hotel, at 10 S. Post, has 283 rooms. The nearby Davenport Tower, built by the Worthys at 111 S. Post, has 328 rooms. It opened in 2007.

Both the Davenport and the Hotel Lusso are on the Spokane Register of Historic Places.

The sale was announced Friday to Lusso employees, Davenport communications manager Tom McArthur said.

Most management positions at the Lusso will be eliminated, Worthy said, but some of those Lusso managers likely will land jobs working with the Davenport in other capacities..

“We really wouldn’t need to take on any more management positions to fold it into the rest of what we’re doing,” he said.

The Dinnisons opened the Lusso in 1998, after buying two historic buildings and combining them in an extensive renovation.

The Worthys reopened the Davenport in 2002 after a renovation reported to cost $30 million. It has since become a prime attraction in downtown Spokane.

Worthy said the acquisition of the Lusso gives the Davenport additional meeting space downtown. It also offers travelers a wider choice of accommodations when they contact the Davenport, he said.

“There’s a certain group of travelers who prefer a boutique experience and shy away from larger properties. We know that everyone’s favorite color is not red,” Worthy said.

The Lusso, he added, is considered Spokane’s best boutique hotel.

“Their rooms are very, very nicely done,” he said. “We don’t plan any upgrade. We’ll just keep on doing a good job of taking care of the customer.”

Contact Tom Sowa at toms@spokesman.com or (509) 459-5492.


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