August 31, 2013 in Business

Land for Worthy’s new hotel assessed

Developer would pay district $6.67 million
By The Spokesman-Review
 
Document

On the Web: Assessment document online: http://ow.ly/oqT1o

If Spokane hotelier Walt Worthy moves forward to build a new 700-room downtown hotel, he’ll have to pay the Spokane Public Facilities District $6.67 million for the land.

In mid-August, Worthy, developer of three Spokane downtown hotels including the Davenport, signed a purchase agreement to build a seven-floor hotel near the Convention Center. At the time, the district hadn’t completed a formal assessment of the land it will sell for the project.

A formal assessment released this week said the 2.9 acres set aside for the hotel, directly south of the INB Performing Arts Center, is worth $7.9 million, but a number of deductions and adjustments lower the price by more than $1 million.

If built, the Convention Center hotel will be the largest in the area. Worthy has said building it will take business away from his other Spokane hotels, but he believes the net benefits to the downtown justify the project.

The biggest offset in the assessment is the uncertain cost of soil remediation at the site. The land likely has contaminated soil from former uses, including being a dump site for debris from the Great Spokane Fire of 1889.

Worthy has said that in order to continue the project he needs to determine the ground doesn’t present unexpected problems. He has roughly 60 days from the purchase agreement date to buy the land or back out.

The assessment approved by the PFD board this week was managed by Bruce Jolicoeur of Valbridge Property Advisors. That report calculated a ground remediation cost of $1 million.

The property, used lately as a 300-space parking lot, has gone through extensive preliminary work over the past two weeks. Work crews have hauled away asphalt, concrete and landscaping to allow engineers to drill and test the ground.

PFD Board Chairman Mick McDowell said the signs of activity suggest Worthy is moving straight ahead and hasn’t found any reason to back out of the project.

“I applaud the alacrity with which Walt tackles a project,” McDowell said.

The PFD has agreed to provide $500,000 to offset the costs of ground remediation. The city has also told Worthy it will contribute toward those costs. The amount the city will provide has not been announced.

Worthy has not released an estimate for the cost of the project.

If Worthy backs out of the purchase, the agreement stipulates that he will restore the parking lot to its former condition.

His initial plans say the 15-floor hotel will have 70,000 square feet of meeting space and a 20,000-square-foot ballroom. It will also include a 900-space parking garage.

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