Blueprint For A Grand Return Developer Has Plan, Track Record To Restore Davenport’S Glory

Standing on the broken sidewalk along the 800 block of West First, Walt Worthy seems oblivious to the adjacent building’s cracked windows, its dangling awning supports, and the peeling, mocking second-story billboard boasting “A Tradition in Elegance.”

Looking as confident as a high-stakes poker player just dealt four aces, Worthy announces in his reassuring Georgian drawl, “It’s just a masterpiece sittin’ there waitin’ to get framed. It’s overwhelming - it’s so damn big. But, once we get started, I think all the pieces will fall into place.”

With that, the real-estate developer reaches into the pocket of his khaki trousers, retrieves a key and unlocks the sliding glass doors leading to one of the region’s most venerated sanctums: the main lobby of downtown Spokane’s Davenport Hotel.

Last week, Worthy and his wife, Karen, became the newest owners of the vacant 14-story landmark. Two years from now, they plan to reopen the hotel in a style that will do justice to Louis M. Davenport’s dictum: “… To so well please guests that they will be glad they came, sorry to leave and eager to return.”

Between now and 2002, Worthy plans to gut almost everything above and below the first- and second-floor meeting rooms, rewire and plumb 400 state-of-the-art hotel rooms, punch a formal drive-through entrance into the adjoining Pennington wing just off Post, and build a parking garage on the south side of First Avenue.

Local architect and preservationist Ron Wells, one of three other parties who recently bid on the property, predicts success.

“It would not surprise me if, in 10 years, we look back on this and say Walt Worthy made the bargain of the century. He paid $6.5 million for 300,000-plus square feet of space. That’s just $20 a square foot for the grandest building in the entire region,” says Wells, “and the major meeting rooms have already been very nicely restored.”

Indeed, Davenport Sun International Hotels spent $8 million on restoration and maintenance since acquiring the idle 1914 hotel a decade ago for $5.5 million.

The lobby’s elaborate skylight system - tarred over as an air-raid precaution during World War II - has been rejuvenated. Fifties-era wallpaper has been steamed off the solid oak panels of the Elizabethan Room. Asbestos has been removed. But disputes over a parking garage and an oil leak, compounded by the 1998 Asian economic crisis, prevented Hong Kong-based Sun International from moving ahead with full restoration. Now the company has turned its attention to a Thai gold mine, and, in the words of Chairman Wai-Choi Ng, “passed the baton” to Worthy.

“He has the passion and the hands-on experience to do a good job,” Ng observed Friday.

Since leaving the Air Force, where he taught survival skills, Worthy, 53, has demonstrated a knack for turning obsolete buildings into cash cows. He intends to do the same with the Davenport.

“This is not a charity situation,” Worthy says. “It’s going to be fun and it’s going to be a challenge. But as long as I’m going to fool with it, the goal is for it to pay its own way. All of my projects are that way.”

Those outside real estate circles probably know Worthy only by his conspicuous, mirrored Rock Pointe Corporate Center at Boone and Washington, or by the banners on his buildings that read: “WALT WORTHY HAS SQUARE FEET.”

This will be Worthy’s first foray into the historic preservation arena, where economic judgment often bumps up against strong emotions.

“I’m real certain we can work with the local preservation office,” Worthy says. “We’re not going to paint the building black, put silver windows in it, add a red stripe and make it look like Rock Pointe.”

But neither will he bow to bureaucratic whims.

“No matter who it makes mad, you’ve got to do whatever it takes to make it work financially,” Worthy said Thursday. “Whether we go for national (historic preservation) tax credits depends on how flexible they are. I’d like to do it if we can. But, if we can’t, I’m prepared to pull it off the (national) register,” an honor bestowed 25 years ago.

One day later, though, after meeting with Spokane preservation officer Teresa Brum, Worthy showed signs of mellowing. Brum explained to Worthy that he could do things his way - including tearing down the Pennington, if necessary - without jeopardizing the hotel’s register status.

Certified restoration work can greatly reduce, even eliminate, a building’s local property tax for 10 years, Brum says. The Davenport’s property appraisal already has been reduced by $3 million, based on rehabilitation work done by Sun International.

And 20 percent of the cost of restoration work approved by National Park Service officials counts as credit against federal income tax.

Architect Wells, who has put together 24 projects that qualified for restoration tax credits, says the federal incentive often makes the difference between financial success and failure.

“All I can tell you is that the Steam Plant (restoration) never would have happened without tax credits,” Wells says.

But Worthy offers a different perspective as he points to what he considers one of his biggest headaches: the Davenport’s 1,200 badly weathered, double-hung windows. “You can replace windows one way and it’s $200” each, he says, “or another way that’s four or five times that much. Having to buy windows that meet the national historic people’s criteria can make a huge monetary difference.”

Besides, Worthy isn’t used to asking permission. “Most of the time we just tear everything out and start again,” he says, “and that’s what we’re going to do up above (the Davenport lobby) - we’re going to tear everything out, throw it away and start over again.”

Worthy calls the Davenport basement “downright scary.”

“You have a wall of pipes with 100 different valves going to who knows where. There are ducts big enough to put a Volkswagen in, and blowers taller than me.

“That’s the biggest challenge - the demo(lition),” he says. “It’s all just got to go to the junkyard.”

Worthy plans to elevate the older, hodgepodge Pennington, gut everything except the ornate, second-floor Hall of Doges, build a new foundation that accommodates 100 cars, and add a covered, off-street entrance.

“This hotel has to have a new entrance in order for it to function,” Worthy says. “With Spokane’s weather, you can’t fill up 400 rooms letting people out on the side of the road. And being as it’s my money on the dotted line, I’m not knowingly going to do something stupid from that standpoint.”

Worthy plans to reopen the public meeting rooms immediately for weddings and other occasions, and keep them open during the two-year restoration.

Sun International estimated the cost of rehabilitating the Davenport from its present state at $30 million, with another several million for furnishings.

By comparison, Seattle’s historic 450-room Four Seasons Olympic Hotel was renovated in 1985 for $33million (plus furnishings). Portland’s Multnomah Hotel, built in 1912, reopened several years ago as the 276-room Embassy Suites after a $45million face lift.

Worthy is more optimistic about rehab costs. “In my opinion,” he says, “it’s not economically feasible to spend $30 million on this hotel, then try to have a cash flow. I’m going to try to do $30 million worth of work for half price. It’s not how much money you spend, but how you spend it.”

Worthy may be a novice in the hotel trade, but he has nearly two decades of renovation work under his tool belt.

“What gives us a leg up is that we have a core group of about a dozen guys who have already figured out how to solve just about everything that’s wrong with this building at one time or another - and 15 or 20 different times, in a lot of cases,” he says.

Since 1985 Worthy has dreamed of resurrecting architect Kirtland Cutter’s most celebrated structure. What kept him on the sideline, he says, was that, until now, the project “didn’t come close to penciling” financially.

“It’d be a wonderful thing if you could pick the hotel up with a big helicopter, take it over to Seattle and charge twice as much. Or take it farther south and charge four times as much,” Worthy says. “But it’s here, and it’s going to stay here, where $100 to $150 (nightly rate) is tops.”

Worthy hopes to offer those rates for luxury rooms comparable to what’s available across the street at the upscale, 48-room Hotel Lusso, which charges $155 to $295 a night.

Joe Dinnison, who spent more than $3.5 million turning two neglected buildings into the Lusso, calls Worthy’s plans “fantastic.” And he’s confident Worthy can succeed where other Davenport owners have failed.

“Walt is a proven entity. He doesn’t make a big deal about anything, he just does it. And he does it with integrity.”

But Dinnison did offer his friend some advice the other day. “I told him, `Walt, you don’t own that building. All the people (with fond Davenport memories) own it, and now you’re a public official.”’ That realization began sinking in last week as news of Worthy’s purchase spread. “I’ve been on the phone nonstop,” the developer says. “The reaction has been totally supportive, from little old ladies to City Hall.”

Which is all the more reason why he likes his chances, Worthy says. “If all the people who say they believe in this hotel come out and support us - and bring their American Express - we’ll succeed.”

When reminded how another owner, Dallas-based Lomas Financial Corp., spent $50,000 a month back in the late ‘80s maintaining the unoccupied Davenport - including paying someone to flush the hotel’s hundreds of toilets once a week to keep water moving through the pipes - Worthy just laughs.

“I hope to have someone in the rooms more than once a week who will pay me to flush toilets. Otherwise, our next project is going to be auctioning off the bricks.”