City Council Balks At Going Into Bicycle Business

Bicycle shop owner Mike Conley didn’t want to buy Greg Yost’s Riverfront Park bike business.

Neither did several of his competitors, Conley said.

And at least three members of the Spokane City Council said Tuesday night that a city purchase of the park’s bicycle rental and sales business is a bad idea.

After more than an hour’s deliberation, the council decided to send a proposal to buy Quinn’s Wheel Rentals & Sales back to the Park Board for reconsideration.

“This, quite frankly, is not a particularly wise choice by the Park Board,” said Mayor Jack Geraghty.

“This is what I’ve jokingly referred to as ‘reverse privatization,”’ said Councilman Chris Anderson.

But just because the council sent the proposal back doesn’t mean the Park Board has to reconsider it.

City Attorney Jim Sloane told surprised council members the city charter drafted in 1910 gives the board total authority to allocate money in the Park Fund.

“Disbursement is under the exclusive control of the Park Board,” Sloane said. “The contract is merely processed through the City Council.”

Anderson, who along with several council members was unaware of the charter provision, said, “I’ve got a real problem here with the issue of accountability.”

Park Board members are appointed by the council.

Past disputes over spending or contracts have been resolved through discussions between council and board members, Sloane said.

The board agreed last month to buy the bicycle business - including the rental equipment and the building - for $35,000 from owner Greg Yost, who built the shop three years ago, said Riverfront Park Manager Hal McGlathery. Running the business would cost another $35,000 each year.

Since Yost started the business three years ago, revenues have ranged from $50,000 to $80,000 each year. Now, Yost has ventured into real estate and development and wants out of the bike business, McGlathery said.

Yost tried to sell the business to several bike shop owners before coming to the Park Board, McGlathery said.

“They didn’t have the same energy to commit to a second location,” he said.

Conley, who owns a Division Street bicycle shop, told the council Yost had approached him about buying the shop last year. Conley said he took the idea to his accountant, who advised him to decline.

“I couldn’t make it work,” said Conley, who added that several of his competitors also opted to stay away from the business.

Yost, reached at his home late Tuesday, said he cleared $20,000 to $25,000 each year on the shop.

The city easily could clear more because it wouldn’t have to pay 15 percent of the revenues back to the park, Yost said. It also is self-insured, freeing up another 8 percent of revenues.

“This is a profitable, lucrative opportunity for the city of Spokane,” he said.

McGlathery said he’d checked with the city’s risk management department, which told him the park’s insurance premiums wouldn’t change if the city bought the shop.

He added that the Park Board doesn’t want to lose the popular bicycle shop.

“This has been an excellent concession for the last three years,” McGlathery said.

George McGrath, a frequent council critic, told the council “not to be led down a primrose path. I question the advisability of this to myself and to any of the taxpayers in Spokane.”

A tie vote defeated an earlier motion to approve the deal. Anderson then moved the measure be sent back to the Park Board for reconsideration. That motion passed by a 4-2 vote with Councilwomen Phyllis Holmes and Bev Numbers dissenting.

Councilman Joel Crosby was absent.

Also Tuesday, the council:

Approved raising planning fees. The increases were part of the 1995 budget passed by the council in December and are expected to add about $40,000 to the general fund.

The fees haven’t been increased since the early 1980s and are similar to ones adopted by the county last year.

The fees vary according to type. Filing plans for large subdivisions jump from $300 to $1,000; filing fees for small subdivisions go from $200 to $500.

An earlier proposal to raise appeal fees was thrown out after several council members and residents complained.

Approved extending a citywide moratorium on manufactured housing for three months.

Last year, the council called for a yearlong halt on the housing while the city’s Plan Commission drafted standards regarding where such housing could be located.

The commission asked for more time to prepare its final recommendations.