River Park Square Has Ups And Downs Center Creates Jobs, But Garage Struggles

After five months, the report card on the renovated River Park Square shows good marks for job creation and poor marks for parking revenue.

The downtown Spokane shopping center is reportedly producing as many jobs as developers expected, but not nearly as much parking revenue as consultants predicted.

Most retailers are generally happy about their sales, and the project is providing hundreds of jobs and more than $2.3 million in taxes and permit fees to the city, according to an attorney for River Park Square LLC.

But the public agency that operates the mall’s garage is trying to find the money to cover an $860,000 bond payment due Aug. 1, because fewer people than projected are parking at the facility, and those who do aren’t staying as long as consultants thought they would.

On a third front, the city is trying to sort through conflicting rules to determine whether tenants of the old River Park Square who had to move to make way for the renovation are entitled to reimbursement for their expenses. Officials at the U.S. Department of Housing and Urban Development in Seattle say they’re sure the displaced businesses are entitled to the money; several federal court rulings suggest they are not.

Officials at HUD, the federal agency that guaranteed a $22.6 million loan for the project, recently received a report from attorney Duane Swinton describing the mall’s benefits to the city in the months since it opened.

River Park Square is providing 395 full-time jobs and 394 part-time jobs, Swinton said. Of those, 95 full-time jobs and 265 part-time jobs have been added since the renovation.

Swinton said the project is well on its way to meeting estimates it used when the city asked HUD for the loan guarantee through a program designed to spur economic development.

“One objective of River Park Square was to stimulate growth in Spokane’s economy,” Swinton said.

River Park Square LLC is an affiliate of Cowles Publishing Co., which also owns The Spokesman-Review.

HUD officials in Seattle said the unsolicited reports are informative but aren’t tied to any requirement the companies or the city must meet as part of the loan guarantee.

“This is not the time where we have to make any final judgments,” said Jack Peters, director of community development for the regional HUD office in Seattle. “It’s good background information.”

The first review of the project is expected this summer, when HUD does its annual audit of several programs the city takes part in. At that time, Peters said, the city and developer may be asked to document how many jobs have been created.

Even if the numbers fall short, the city won’t face any consequences because the project is only about two-thirds complete. HUD will continue to review the mall’s track record after the renovation is finished. If the jobs are “significantly short” when the project is finished, HUD would probably offer the city technical assistance to find ways to increase jobs, he said.

The agency will also be checking this summer on the city’s plans to help businesses forced out by the renovation.

“We’re certain the (federal Uniform Relocation Act) does apply,” Peters said.

The city, however, is not so certain, even though Mike Adolfae, community development director, said he believes some former tenants of the old mall will eventually be reimbursed for their costs.

The doubt stems from several federal court rulings that say displaced tenants are only entitled to reimbursement if a project is owned by a federal agency, or a local government using federal funds.

But the mall is privately owned, and the loan guarantee was not final until after renovation began and most tenants had moved out.

The city has notified about three dozen former tenants of the mall, and begun collecting information about the way they left their former locations, Adolfae said. “We really want to get going on this.”

City officials must first get some explanation from HUD as to why it believes the court rulings don’t apply to River Park Square, City Attorney Jim Sloane said. They sent inquiries to the agency’s legal expert on relocation three months ago, but don’t yet have a reply.

“We just need to have a definitive answer,” Sloane said. “We’re getting tired of the fact we’re not getting an answer.”

The delay also frustrates some former tenants who last year were told to fill out forms to apply for reimbursement.

Pat Matthews, owner of the Sandwich Gardens, said the HUD regulations were so confusing he had to spend $2,000 for legal advice to fill out forms, only to be told the money might not be available.

Matthews has found a new home for the popular downtown lunch stop, but said he needs the relocation funds to reopen.

Now he doesn’t know if he’ll get them.

“Anytime you’re sitting on the fence, that’s the worst place to be,” he said.

The mall’s parking garage has a different kind of problem.

In November and December the garage pretty much broke even, with parking revenue about the same as ground rent and operations costs. But those costs did not include the $143,000 monthly bond payments, which the Spokane Development Authority must begin paying in February.

Those payments go to a trustee who in turn is scheduled make an $860,000 interest-only payment in August. Payments on principal don’t begin until August of 2001.

The PDA voted this month to study whether it’s best to refinance those construction bonds at a lower rate and postpone this year’s $860,000 bond payment, or to arrange a line of credit with local banks to tide the garage over until the mall is complete. The development authority is the city agency that leases the garage from the developers,

The PDA also decided to get more aggressive about marketing the garage by dropping the rates for daylong “early bird parkers,” making it easier for theater patrons to pre-pay for parking and allowing stores to offer more than the current $1 rebate on parking.

It also is preparing to allow monthly parking for downtown office workers, something the old garage provided. Nordstrom, the anchor tenant of the mall, has told the developer it was worried monthly parking would fill up spaces it needs for major sales events. But agency board members said that’s hardly a concern with so many stalls sitting empty.