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Friday's major downtown Spokane business story was the culmination of two building takeovers: the 17-story Wells Fargo Tower and the six-level Holley Mason Building. Both buildings gained new owners.
The bigger deal was the acquistion of the rest of the Wells Fargo Building by INHS, the nonprofit medical services provider that was originally hatched as a jointly supervised organization serving both Empire Health Services and Providence Health (Sacred Heart).
On Friday INHS took over the last 74 percent of the Wells Fargo Building. In 2009 it had acquired 26 percent of the building.
Now for some history: Walt Worthy, who bought the tower from the ashes of Metropolitan Mortgage and Securiities in 2005, made it easy for INHS to get into a good lease at a time when INHS was struggling to find adequate downtown office space.
In 2005 INHS was working out of two buildings, the Holley Mason and the Steamplant. But it needed more room as it continued to grow.
That year Worthy — who also owns the downtown Davenport Hotel — helped form a condo association for tenants of the Wells Fargo. During that process INHS agreed to a long-term lease that let INHS move in to the tower.
That lease was signed just before Worthy sold the building to Prium Spokane Buildings, a Tacoma-based developer. The lease included an INHS option to purchase the leased premises which covered about five floors of the entire building.
Three years later, when the option came up, INHS paid $9.4 million to Prium for the portion of the building it was leasing.
Last week's credit bid, in which INHS took over the remainder from Prium, was brokered by NAI Black's Chris Bell. The price was about $16 million.
Wells Fargo Building goes to INHS in foreclosure sale after Prium bankruptcy; Holley Mason also sold
Two of Spokane’s well-known but cash-strapped buildings concluded foreclosure sales Friday, shutting the file on separate cases of large commercial properties falling victim to a distressed real estate market.
The 17-story Wells Fargo Tower at 601 W. First and the six-level Holley Mason Building at 157 S. Howard both formally changed hands, culminating bank repossessions after the previous owners were unable to pay off loans.
Spokane’s Inland Northwest Health Services (INHS) took over about three-fourths of the Wells Fargo building; in 2009 it acquired roughly one-fourth of the building when previous owner Prium Spokane Buildings LLC sold that space for $9.4 million.
At Friday’s sale INHS officially took over the remainder of Prium’s 184,000-square-foot tower for roughly $16.1 million, said John Craig, INHS chief financial officer. Prium, based in Tacoma, did not respond to phone calls seeking comment.
Chris Bell, of NAI Black, represented INHS in the deal.
INHS has about 1,000 employees across the region, with 350 to 400 working in the Wells Fargo building.
Prium bought the building from Spokane developer Walt Worthy for $25 million in 2006. The bank that ended up with the mortgage was Spokane-based Sterling Savings.
Prium Spokane Buildings, a division of Tacoma-based Prium Companies, filed for bankruptcy in late 2010.
INHS is an independent medical services provider that works with area hospitals and providers as well as running the St. Luke’s Rehab Center and other services. It was formed in 1994.
Craig said the INHS board has no plans to sell the Wells Fargo building or portions of it in the near future. Since 2006 INHS has been using the building and is its current largest tenant.
The second largest tenant is Wells Fargo Bank, said Craig. He said Wells Fargo has a naming-rights provision, meaning there will be no change in the building’s name.
The Wells Fargo Tower was originally the Farm Credit Bank Building, constructed in the early 1980s.
In 1998 Metropolitan Mortgage and Securities CEO Paul Sandifur bought the bank building for $11.7 million and used it for his company’s base of operations. The once-high flying company stayed there until mounting debt and angry investors forced Metropolitan to file for bankruptcy in 2004.
A year later Spokane developer Walt Worthy bought the building and renamed it the Wells Fargo Tower after signing Wells Fargo as the anchor tenant.
In addition to the sale of the Wells Fargo, Worthy had a previous Spokane deal with Prium. In 2005 he sold the Rock Pointe Commercial Center north of downtown to Prium for roughly $82 million.
While still in bankruptcy, creditors and Prium continue to wrangle over the Rock Pointe assets, looking for a buyer who would want some or all of the distressed assets of that set of three commercial buildings
Northwest MedStar, the air-transport medical service, is setting up a permanent base in Moses Lake.
For the past two summers the service has operated a helicopter day base about nine miles north of Moses Lake through an agreement with Grant County Fire District 5.
The decision by nonprofit INHS establishes a fulltime base, with a registered nurse, respiratory therapist, pilot and mechanic. They will handle emergency responses and assist in transports between regional hospitals.
A permanent hangar will be constructed later this year to house the helicopter.
The full-time base provides more direct air transport services and decreased response time for north central Washington, said an INHS press release.
If you still can’t figure out what INHS does, and what they’re doing in the area of electronic health records (EHR), the chance to get some answers is next week, during the next Executive Connect Breakfast, at the Spokane Club.
It will be a session Dec. 9 with Tom Fritz, CEO of INHS, the nonprofit company that does a number of administrative and service functions for area hospitals. Among them is the role of managing the electronic records system that allows many regional hospitals and clinics to keep a steady flow or medical data back and forth.
Fritz will be the speaker at the meeting, in the Georgian Ballroom, from 7:30 a.m. to 9 a.m. Doors open at 7 a.m.
Registration for $30 is required by going here. To ask questions, call 509.358.2114.
OLYMPIA — The Legislature came closer to stepping between two feuding hospital organizations in Spokane by changing laws that govern what happens when the board of a non-profit corporation deadlocks.
House Bill 3046 allows a superior court judge more lattitude in solving an impasse on a non-profit board. Under current law, the judge’s options were essentially limited to dissolving the corporation.
The bill was was spawned by a dispute by the corporations that run Deaconess and Providence Sacred Heart medical center and set up Inland Northwest Health Services to share a variety of operations, from medical records to air ambulance. Both hospital corporations were non-profits when INHS was set up, but Deaconess has since been purchased by a for-profit organization and disagreements over the use of INHS have arisen.
It’s the first change in the state’s non-profit laws since 1967, Sen. Adam Kline, D-Seattle said. It would allow judges to use the same rules for trying to solve a dispute on a for-profit corporation.
Rep. Jim Honeyford, R-Sunnyside, tried unsuccessfully to strip a emergency clause from the bill: “We haven’t acted in 43 years, I don’t see an emergency to act now.”
But Sen. Lisa Brown, D-Spokane, said a Spokane “health-care related non-profit” — she didn’t mention INHS specifically on the Senate floor — could be in a sitaution soon where it needed this assistance.
Sen. Chris Marr, D-Spokane, said a deadlock on the INHS board could imperil 1,000 jobs in Spokane.
The bill passed 44-1 with all Spokane area legislators voting yes. It now heads back to the House of Representatives, which passed a similar version 97-0 three weeks ago.