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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Worthys ready to launch convention center hotel plan

Kevin Twohig, chief executive officer of the Spokane Public Facilities District, listens as the district’s general counsel, Stanley Schwartz, goes over the Joint Development Agreement, which allows Davenport Hotel Collection owners Walt and Karen Worthy the use of a full city block just south of the INB Performing Arts Center for a 721-room hotel and a 900-stall parking garage. (Colin Mulvany)

After announcing plans last year to build what would be Spokane’s biggest downtown hotel near the Convention Center, developers Karen and Walt Worthy say they’re ready to start the first phase of the project.

Over the past two weeks, the Worthys landed a number of concessions from city officials to help defray some costs of the project, proposed for an open block across the street from the INB Performing Arts Center and near the Spokane Convention Center.

Matt Jensen, a spokesman for the Worthys, said ground tests and field analysis will likely begin today as a first step in determining if the rest of the project will continue.

That step follows formal approval on Tuesday of agreements between the Worthys and the Spokane Public Facilities District. The PFD, which owns the land where the hotel is planned, signed a purchase and sale agreement to sell the land to Worthy’s company, but a final price won’t be decided for up to 60 days.

The Worthys, who successfully redeveloped the Davenport Hotel and have since built and acquired other downtown hotel properties, have said they plan to build a hotel with at least 700 rooms and 900 parking places. Three-hundred of those spaces will belong to the PFD and will provide yearly payouts from parking revenue.

The hotel would have 70,000 square feet of meeting space and a 20,000-square-foot ballroom. The main part of the hotel and meeting spaces would have 600,000 square feet of space and the parking garage 300,000 square feet, Jensen said.

No cost estimate has been set for the full construction, Jensen said.

The PFD also signed a developer’s agreement that gives the Worthys 60 days to decide if the project moves forward. That time gives both sides the ability to conclude a number of final agreements, including a final price of the property.

An initial valuation pegs the land’s price tag at roughly $6.7 million. A final assessment is due in roughly two weeks, said Kevin Twohig, CEO of the Public Facilities District. If the Worthys don’t back out, the purchase gives the developer title to the land.

The Worthys’ decision to move forward was accelerated by incentives offered by the city of Spokane.

Those include an agreement to pay some of the cost of ground remediation, a commitment to provide new sidewalk and streetscape improvements, and a waiver of obstruction permits that would have been needed to close a lane of traffic along Bernard Street during construction.

Scott Chesney, the city’s director of planning and development, said the largest incentive will be bearing some of the cost of ground remediation; the site is likely to have significant contamination, in part from its past use as a place for burying debris from the Great Spokane Fire of 1889, Twohig said.

The amount the city will provide is still uncertain, Chesney said. “We’ll have to wait until Walt has tests done and finds out what the costs will be. There will be an upper limit” on how much the city will offer for remediation, he added.

Two months ago, the PFD approved two incentives for the project: $500,000 for ground cleanup and paying the roughly $2 million to build a skywalk connecting the hotel and the Convention Center. Twohig said one initial estimate he’s seen suggests the Worthys would face a ground cleanup cost of roughly $900,000 beyond what the PDF will spend.

The cleanup cost, if the hotel is built, would be considerable, since initial plans call for excavating roughly 10 feet below ground to provide for lower-level parking and other services.

Money for the incentives will come from $65 million in general obligation bonds approved by voters in 2012 to pay for expansion of the Convention Center.

Any funds the city provides for the project, Chesney added, will be repaid out of taxes generated by the project.

Twohig and others have said the building of a large headquarters hotel near the Convention Center will increase Spokane’s ability to draw conventions and meetings.

Mick McDowell, chair of the PFD, said the hotel, if built, and the expansion of the Convention Center will be a “game-changer” for the area.

McDowell said the agreements on Tuesday establish that “the PFD is ready to sell and that Walt is saying he wants this to happen.”

Said McDowell, “Walt looked me in the eye and said, ‘Let’s go for it.’ ”