January 12, 2013 in City

Lot of frustration

After church was torn down, plans for a hotel fell through
By The Spokesman-Review
 
Jesse Tinsley photoBuy this photo

The partially excavated lot at Third Avenue and Division Street in downtown Spokane is fenced for safety.
(Full-size photo)

Map of this story's location

For about four years, a pit surrounded by temporary chain-link fencing has greeted those entering downtown Spokane on one of the busiest exits from Interstate 90.

Some city leaders say the site on the northwest corner of Third Avenue and Division Street has become an eyesore that hurts business owners and restaurateurs working to attract customers downtown.

“It’s not fair to them for that to be the first thing people see when they come off the highway,” said Jan Quintrall, Spokane’s business and development services director. “It’s just not an option for that to sit vacant forever.”

The property, now often lined with campaign signs during election season, was the home of St. John’s Lutheran Church until 2008 when it was torn down to make way for a four-story, 115-room hotel.

It was a project derailed in large part by bad luck and timing.

Rita and John Santillanes planned to open a Best Western Plus Peppertree Inn on the property. She said the project was delayed by a requirement to consider the historic value of the church. By the time the project was ready to move forward, the economy had collapsed and the bank that was providing the project’s financing, the Bank of Whitman, was in trouble. Eventually, they lost financing, and the bank folded.

The couple, who own four other Best Western Plus Peppertree Inn locations, still planned to build the hotel until last year when Walt Worthy, who owns the Davenport Hotel, announced that he would build a 700-room hotel adjacent to the Spokane Convention Center.

“We decided that it probably wouldn’t be a good investment, even if we could get the financing,” Santillanes said. So they put the property on the market for $2.5 million.

Quintrall said she could not rule out pursuing a condemnation of the property as a last resort, because it is a blight on the gateway into downtown from the Division exit.

“If we still see nothing is happening on that in March, I might have to start researching it,” said Quintrall, who said she doubts the asking price would attract a buyer. “We here at City Hall really need to see some aggressive pricing and some aggressive movement to get somebody to take control of it and put something there.”

Joel Crosby, the real estate agent for Coldwell Banker Tomlinson Commercial who has listed the property, said representatives considering two separate hotel projects have expressed interest in the property. He said the price is based on the sale of comparable downtown property.

“That’s not an educated statement,” said Crosby, a former Spokane city councilman, in response to Quintrall’s doubts about the price. He added that the Santillanes are “motivated sellers” who would consider offers.

The Spokane County Assessor’s Office values the property at $1.5 million.

The Santillanes paid $1.9 million for the property in 2007. Rita Santillanes said besides comparable property sales, the price is based on the completed demolition of the church and environmental and traffic studies that could aid future development. She warned against condemnation.

“I would have to hire an attorney then because I feel it’s the city that put my husband and I in this situation,” Santillanes said.

St. John’s Lutheran congregation moved to Latah Valley after it sold its downtown building, which was constructed in 1951. That church replaced one that was built in 1901.

Santillanes said she had been assured that there was no likelihood that the church would qualify for historic registries because little of the interior of the church was original. In 1972, an arsonist broke into the sanctuary and set it ablaze, according to newspaper archives. Although the inside was gutted, the outside remained intact.

The city’s demolition ordinance says structures in downtown more than 50 years old must be reviewed by the Spokane City-County Landmarks Commission before a demolition permit is issued. The commission ruled that the church was eligible for historic registries. The decision didn’t prevent it being torn down but meant that the owners would need to show proof that financing was in place to build a new structure. The aim of the demolition ordinance is to prevent the loss of historic buildings to parking lots or vacant land.

Advocates of historic preservation say the project was the victim of a bad economy, especially considering that the city gave permission to tear down the church.

Dave Shockley, president of Spokane Preservation Advocates, said the church could have been used in the construction of the hotel as a lobby or in other creative ways.

“It’s too bad the property developers didn’t consider trying to use the church,” he said. “A lot of people don’t think of the value of what might already be there.”

After years of talk about improving gateways into downtown, the city wants action, Quintrall said. Another property labeled an eyesore by city officials along a “gateway” is the recently closed Trade Winds Motor Inn, which is adjacent to the Lincoln Street I-90 exit. City officials have proposed acquiring that building through a property swap and then tearing down the structure.

Quintrall said the city doesn’t have the resources to buy the Santillanes’ property.

The Division Street exit acts as an entrance to the University District as well as downtown.

Brandon Rapez-Betty, the University District Project manager, said the property is an opportunity to improve the entrance to the University District and downtown and spark commerce.

“Although the hole in the ground is not doing us any favors, it’s still a foundation for development.”

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