Checking Into The Davenport Proposed Development Authority Could Shape Hotel’S Future

Rumblings about a public makeover of the Davenport Hotel have dismayed but not discouraged Sun Davenport International, the present owner.

Executive Director Jeffrey Ng said creation of a public development authority, while not welcome, at least moves the long-shuttered property higher on the city’s agenda.

In the past, he said, discussions with City Hall dissolved into lip service or produced conflicting information.

“There’s nothing but obstacles, one after the other,” Ng said.

Formation of a development authority was first suggested by Steve Eugster in October 1998, a year before his successful run for the Spokane City Council.

He has continued to press the proposal as a way to save a structure he sees deteriorating.

“If we don’t move fast, we’re going to lose it,” Eugster said.

A public development authority could sell revenue bonds and use the money to purchase the hotel. If Sun International is not a willing seller, Eugster said Washington law gives the city broad powers to condemn structures considered blights.

The hotel then could be sold to the development authority or any other buyer.

Bond funds would also be used to pay to redevelop the property, which has not operated as a hotel for 15 years. Receptions and other public functions were held in its storied meeting rooms until two years ago, when Sun International expected to start reconstruction.

Eugster said the hotel could be reconfigured for condominiums, with some space set aside for offices and some public uses. Relocation of the Spokane MarketPlace is one possibility, he said.

“I don’t want to do this if there’s going to be any cost to the city,” Eugster cautioned.

Ng said Sun International still plans to redevelop the Davenport as a 395-room hotel employing 400. Appraisals show the project would be profitable, he said.

One study was conducted by Jinneman, Kennedy & Associates, a Seattle firm that has done similar assessments of more than 100 hotels in the region since 1995.

Eastern Washington University journalism professor William Stimson prepared a summary for the Friends of the Davenport, a group that has supported preservation of the hotel since shortly after its closure July 1, 1985.

The Jinneman study assumed an expanded convention center that would boost related hotel occupancy at a rate of 2 percent annually. The Davenport would capture a disproportionate amount of that trade because of its amenities.

The same qualities would lure travelers who now bypass the city in search of a unique hotel experience.

The luxury Lusso Hotel, across Sprague from the Davenport, enjoys Spokane’s highest occupancy rate, the study notes.

Jinneman said an average room rate of $115 per night, modest by comparison with like hotels in Seattle and Portland, would generate profits for the Davenport four years after the completion of $35 million in renovations.

Ng said another study using more conservative figures reached the same conclusion.

That report was prepared by a hotel group that would manage the Davenport. The company, which Ng declined to identify, has already made significant in-kind contributions to the hotel’s redesign.

He said Sun International has not signed a contract with the company because financial groups considering an investment in the Davenport may want their own management teams.

Financing for renovations has been the project’s bugaboo almost since Sun bought the 85-year-old hotel from Lomas Financial Corp. in 1990 for $5.5 million.

When sufficient funds for renovations could not be found locally, the search extended to national and international markets. Ng said potential deals were torpedoed by an old oil spill that had crept up to the Davenport’s property line, and Russia’s economic collapse in late 1998.

Meanwhile, Ng has said Sun has spent more than $8 million on tasks that have included restoring the lobby’s stained glass ceiling.

Although the appraisals are cause for optimism, Ng said he won’t make more predictions about how soon a deal might come together.

“We don’t want to give false hopes and false promises,” he said. “I just want to get this project done and relax.”

Ng said rumors of a sale sparked by investor visits have been an ongoing distraction, as have disputes with the city over a proposed parking garage and the condition of the sidewalks around the hotel.

Eugster’s plan was another.

Ng responded angrily when the idea for a public development authority was first floated, but he said he no longer rules it out.

Ng recently gave Eugster an extended tour of the hotel, the councilman’s first look at the property in years. Both said the meeting was positive, but Ng said he is not sure how Sun’s vision for the property and Eugster’s might dovetail.

Ng noted he has consistently received a sympathetic hearing from Mayor John Talbott.

Eugster said he wants the City Council to authorize forming a task force to assess various ways of moving the Davenport project forward.

The topic, he said, had been expected to be on the table during the council’s retreat, which was Saturday, and there could be a resolution on the agenda as soon as Monday.

A report could come back in as little as a month or as much as six months, he said.

`I would hope the Ngs would want to participate in the process,” he said.

Among those Eugster said he would nominate for the group is Tom Tilford, a semi-retired attorney, developer and member of the board of directors of Washington Trust Bank.

Tilford said a development authority or some other intermediary could assume control of the structure, then sell off slices to a condominium developer, boutique hotel operator and restaurateur.

Precedents exist for such mixed ownership-mixed use buildings, he said, although not in the hospitality industry.

“Everyone would like to see something done with that project,” Tilford said, adding that most observers still want the Ngs to succeed with their own plan.

He said segmenting development, by dividing the financial burden, might be a way to overcome the difficulties of assembling a single investment package.

Like Eugster, Tilford said the Davenport’s condition concerns him. “Time is an enemy,” he said.

Ellen Robey has chaired the Friends of the Davenport board for several years. She said she welcomes Eugster’s interest in the hotel, but added that he and others do not give the Ngs enough credit for the effort they have put into maintaining the property over the years.

“They’ve spent a lot of money,” she said.

Robey said Wai-Choi Ng, Jeffrey’s brother and the president of Sun International, left her a telephone message Christmas Eve expressing continued optimism about the project’s prospects.

“It kind of gets in your blood,” she said, dismissing Eugster’s characterization of the hotel as a blight.

“We’ve got a lot bigger public nuisances in town,” she said.

Stimson noted that the Ngs have kept the hotel secure and heated, sought out old fixtures and furniture that had been removed, and restored some public areas.

The family has not received the community support that would have been expected for backers of such a vital downtown project, he said.

Stimson, Tilford and Eugster agreed a restored Davenport, with adjacent parking, could anchor a corridor that extends from Steam Plant Square at First and Lincoln north to River Park Square.

Jeffrey Ng, a born-again Christian who said he prays for the fate of the Davenport nightly, wants to improve communications among the parties interested in saving the hotel. “At least somebody is talking,” he said of recent developments. “We are open to ideas.”

This sidebar appeared with the story: TIMELINE 86 years at the Davenport

September 1914: Hotel opened by Louis Davenport.

April 1945: Davenport sells, starting a series of ownership changes that continued for the next 45 years.

July 1985: Hotel closes doors.

March 1990: Sun International Ltd. buys hotel for $5.5 million.

August 1993: Old oil leak discovered in hotel area, squelching redevelopment effort.

December 1997: Reception areas of hotel closed.