Attorney Gives Up On River Park Square Lawsuit Eugster Had Wanted To Block Use Of Hud Funds For Downtown Project

Spokane’s top City Hall watchdog has dropped a lawsuit against the city aimed at blocking use of federal taxpayers’ money for a downtown redevelopment project.

Attorney Steve Eugster said Wednesday he walked away from the suit after realizing “very few people were as concerned about the issue as I was …”

But, he added, “I’m not going to give up on my efforts to keep government from being more than it should be.”

Eugster filed a Superior Court lawsuit in June asking that the city not be allowed to accept a $1 million grant and $23.8 million loan from the U.S. Department of Housing and Urban Development.

The attorney charged that the city’s plans to dedicate taxpayers’ money to a project that would nearly double the size of River Park Square violate the state’s constitution.

News that Eugster had dropped the suit came as a relief to both city and River Park Square officials.

“The city always has believed its actions were within the authority given it by federal law,” said City Attorney Jim Sloane. “I’m pleased that this matter is resolved.”

“I think that’s wonderful news,” said Nancy Goodspeed, consultant to the River Park Square project.

The city received a $1 million grant from HUD in June and is in the process of applying for the loan.

Money from the grant will be used to pay the first year’s interest on the federally guaranteed loan as well as to reduce the principal payments each year thereafter.

Both the grant and loan will be used to build a bigger Nordstrom store - part of a larger plan by River Park Square’s owners to nearly double the size of the downtown mall.

About $45 million in private money will be used to build a movie theater, food court, glass-enclosed Post Street atrium and space for local retailers and national chain stores.

The public-private partnership is headed by Citizens Realty Co. and Lincoln Investments Co., owners of River Park Square and affiliates of Cowles Publishing Co., which owns The Spokesman-Review.

Eugster said he isn’t going to stop challenging the city’s actions. “Land-use and environmental issues are more important to me at this stage than tax issues,” he said.

The lawsuit was dismissed without prejudice, meaning Eugster could bring it back at any time. Whether he would do so remains in doubt.

“I might bring a part of the case back if the city does something stupid,” he said, adding that he isn’t sure what that might be.

, DataTimes