Dispute May Halt Mall Project County Threatens To Stop Work If Developers Don’t Resolve Liability For Storm-Water Runoff

Spokane County officials are threatening to halt the region’s largest construction project if two developers don’t resolve a dispute over some land along the Spokane River.

The companies - Hanson Industries and JP Realty Inc. - haven’t decided who is responsible for 14 acres behind the new Spokane Valley Mall site that will be used to drain storm-water runoff.

“Things like this usually end up in dollars,” said Dennis Scott, Spokane County’s director of public works. “It’s Hanson’s property and (JP Realty) needs to use it. If the only way I can get these guys to the table is to stop them, then that’s what I’m going to do.”

The dispute has been brewing for three months, Scott said. Now he’s given the developers until Monday to tell him who is liable for the land.

If he doesn’t have answers by then, Scott said he will halt construction on Indiana Avenue, which is being extended from Pines to Sullivan as a mall access road, and withhold the permits needed to complete construction inside the mall.

Hanson is building the access road, while JP Realty also known as Price Development - is erecting the mall.

The land in question is just north of the mall site at Sullivan and Interstate 90. The 14 acres stretch from the Centennial Trail to the Indiana Avenue extension.

Scott says someone must assume liability for the land in case something goes wrong there. The county won’t accept responsibility for the property.

Scott said he’s frustrated because the county has bent over backward to help the mall project move forward, sometimes without the necessary documentation in place.

“I agreed to provide Price Development with an interior building permit even if the road was not complete because it is in all parties’ best interests,” Scott said in a letter sent to both developers Sept. 4. “I have also allowed Hanson Industries to proceed with the construction of Indiana even though we do not have completed plans on the total facility.”

Dave Carlsen, director of real estate for Hanson, said the dispute will be settled by the Monday deadline. “There are ongoing discussions to make sure the issues get resolved.”

Officials at JP Realty did not return telephone calls Wednesday.

It’s not clear who owns the disputed land. County officials say Hanson owns it. But Carlsen said he’s not sure that’s true, due to the way the land was platted.

Spokane County Commissioner John Roskelley said the land was leased to the county for use as a park, but was returned to Hanson. “We determined we could not make a park out of it,” said Roskelley.

The mall is being built on part of 90 acres JP Realty bought from Hanson.

The mall, due to open next August, will be Spokane County’s second largest.

It will have 700,000 square feet of retail space, including anchor stores J.C. Penney, The Bon Marche, Sears and a multi-plex cinema.

Hanson Industries owns about 110 acres surrounding the mall and plans to develop it for retail and industrial use.

Carlsen said the land dispute has been blown out of proportion. It will be resolved, he said, possibly with the companies dividing responsibility for the property.

“Ultimately, it’s going to be a ‘gee, what-was-that-all-about’ issue,” Carlsen said.

“With a deal this big, sometimes things don’t mesh exactly as you’d like them to.”

County Commissioner Steve Hasson supports Scott’s decision to halt construction until an agreement is reached.

“What (Scott) is trying to do is not get in the middle of a power play between Hanson and Price Development,” Hasson said. “We certainly aren’t going to have a megamall in the Valley without having storm-water drainage in place.

“We have gone out of our way to come to terms that accommodate both of these parties,” Hasson said. “If we have to be the bad guys, we certainly will rise to the occasion.”

, DataTimes ILLUSTRATION: 2 Photos Map showing Spokane Valley Mall site and storm-water runoff area