Developer Denies Hiding Garage Study City Alleges In Suit That It Was Never Told Of Previous Work That Projected Lower Revenues

An attorney for the developer of the River Park Square garage denied Thursday that the company hid any studies of the project from city officials - a charge the Spokane City Council made in a lawsuit filed this week.

Former and current city officials said they could not remember whether they were told five years ago that a national consultant hired by the city to conduct a financial feasibility analysis of the garage previously had studied the garage for the mall’s developers.

“It’s certainly something you’d like to be aware of,” said Roger Crum, who was Spokane city manager in 1995 when the city began studying the possibility of buying and operating the garage.

But several former and current city officials said the 1996 decision to hire Walker Parking Consultants and Engineers Inc. was not based on any pressure from affiliates of Cowles Publishing Co., which was planning the mall.

The publishing company also owns The Spokesman-Review.

“I’m sure we had discussions about who we were hiring,” said city Director of General Services Dave Mandyke, who was involved in early discussions about the city’s involvement in the garage. “They (developers) never came to us and said, `Use Walker,’ to the best of my recollection. They never came to us and said, `Don’t hire them.”’

Walker was chosen for a detailed study of the garage’s potential usage and revenues based on a recommendation from city staff, said former City Manager Bill Pupo, who is now city manager of Surprise, Ariz.

City staff members were familiar with Walker’s work and reputation because the firm conducted a study of a possible garage for the Davenport Hotel for the city in the late 1980s, City Attorney Jim Sloane said.

One allegation in the 26-page lawsuit announced by the city on Tuesday is that a 1995 survey of potential garage revenues and operating expenses conducted by Walker for R.W. Robideaux Co., the manager of the River Park Square mall, was not disclosed to the city.

“Neither the developers, Robideaux nor Walker ever disclosed to the city either Walker’s prior relationship … or the existence of the prior study,” the lawsuit says.

The estimated revenues and expenses in the two studies are different. The failure to disclose the prior study was negligent, a breach of contract and amounts to a civil conspiracy, the lawsuit says.

Duane Swinton, an attorney for River Park Square LLC, the company developing the mall, said he is not familiar with the details of the 1995 Walker study. But he does know that the developer conducted a series of “pro forma” studies - projections based on certain assumptions - over several years as details of the project changed.

“There were a variety of pro formas done, and those pro formas were shared with the city,” Swinton said.

Bob Robideaux, manager of the mall and the person named in a lawsuit exhibit as the recipient of the 1995 pro forma from Walker, did not respond to requests for an interview on Wednesday and was out of town on Thursday, a spokeswoman for the developer said.

A look at the two Walker studies shows they differ in depth of research as well as in the amount of revenue projected for the garage.

The 1995 pro forma study, which consists of two pages, starts with an estimate of 1994 revenues for the garage, multiplies it by 20 percent, apparently to account for an increase in parking stalls. It also adds revenue from unexplained “specialty tenant” spaces and from theater patrons who apparently would pay a flat rate of $2 to park in the garage.

In the first year of operation, the garage would generate $1.7 million in revenue, that 1995 study estimated.

The two-volume 1996 study, which covers some 65 pages exclusive of appendices, surveys all the parking spaces in the downtown retail region, estimates the average parking fee at $1.36 an hour, and sets a rate for the new garage at $1.50 per hour. It estimates the number of retail parkers and cinema parkers for each month of the year, estimates the amount of time each type of parker would use the garage, and estimates that parkers would pay $1.50 an hour Monday through Saturday and $1 per hour on Sunday. It estimated the garage would earn $4.3 million in its first full year of operation.

The revenue projections in the 1996 study formed the basis for a bond issue used to purchase the garage by a nonprofit organization, establish rent payments to the developer and cover all operations and maintenance costs. Those projections have proven wildly optimistic, and revenue currently covers only the payments to bondholders.

The city has been asked to honor a pledge to cover rent and other costs from its parking meter funds, as promised in a 1997 ordinance. The lawsuit is asking the court to void that ordinance.

Spokane County Superior Court Judge Michael Donohue has ordered city officials to pay those costs from the parking meter funds, but the city has appealed that ruling to the state Supreme Court.

Attorneys for the city and the developer had a Tuesday deadline to reach an agreement that would stay Donohue’s order. Negotiations on that agreement are on hold in the wake of the city’s new lawsuit, and Swinton said the developer was evaluating whether it would resume negotiations.

O. Yale Lewis Jr., a private attorney hired by the city to handle parking garage issues, did not return a call for comment about the city’s plans on seeking an agreement to stay Donohue’s order.