Appointment comes under fire

The decision to appoint Erik Skaggs as Spokane County’s new economic development director without a public call for applications has come under fire.

While some question the lack of openness in the process, others criticize Skaggs’ past political activities and his tenure as a vice president at bankrupt Metropolitan Mortgage and Securities Inc.

Skaggs said the controversy has been hurtful.

“The degree of animosity is ruining our community’s ability to produce more jobs and is taking opportunities away. I want to see that stop,” he said Friday.

Meanwhile, members of the local economic development community said they are willing to move forward with Skaggs and are hopeful he’ll be a positive addition to their cause.

Spokane County Commissioners Phil Harris and Kate McCaslin said Skaggs, who was vice president of market development and government and community relations for Metropolitan, was the logical choice for the new county position. Neither is apologetic about hiring Skaggs without a public call for applications.

“I feel like too often government is criticized for being laborious and prone to inertia and wasting time and resources. In this case we knew the job that had to be done and the person who could do the job,” said McCaslin, who pointed to Skaggs’ bachelor’s degree in economics and work in the community as proof he is qualified.

Harris said the $55,000-a-year position will be paid for with savings generated by combining the positions of county CEO and budget director.

Skaggs could get a raise in the future, but specific figures haven’t been discussed, Harris said, adding that any raise would be based on performance, which he would gauge by talking to people at the county and in the community. No money is being taken from the roughly $400,000 the county already gives each year to economic development groups, Harris said.

Both McCaslin and Harris said the position is something they have been considering for some time and that it wasn’t created to give Skaggs a job. It was just luck that Skaggs was available now, Harris said.

The vote on the new position wasn’t included on the commissioners’ weekly agenda.

Former Spokane County Commissioner John Roskelley said the hiring of Skaggs was “something that basically dropped out of the sky,” and shows a failure to involve others from the community in selecting the right person for the job.

Roskelley said Skaggs may well be fully competent for the new job, but he wishes the two commissioners had launched an “exhaustive” search for the best candidate.

“This is not the standard way government operates,” said Roskelley, who stepped down in September from his commissioner job to accept an appointment from Gov. Gary Locke to the Eastern Washington Growth Management Hearings Board.

Skaggs’ appointment is also generating controversy because of questions concerning patronage and his former political activities.

Skaggs’ wife, Demaris, worked as Harris’s administrative assistant for three years, but Harris said that has nothing to do with Skaggs’ appointment.

“I don’t care how well I know him. We could have grown up together, graduated high school together and married sisters, but if he wasn’t qualified for the job, I wouldn’t have hired him,” Harris said.

Skaggs has matured since working at Metropolitan and serving for a year as an Army reservist in Somalia, Harris said.

“He was a young man making $175,000 a year. His buttons were popping. Now he doesn’t have any buttons to pop,” Harris said.

Commissioner-elect Todd Mielke said he didn’t want to Monday-morning quarterback the decision, but conceded that he had some concerns about Skaggs’ appointment.

“I know he’s a bright guy, but I also know that some people in this town believe bridges have been burned,” said Mielke, who added that he’s heard from people on both sides of the Skaggs debate.

Mielke said he hopes Skaggs will use this new opportunity to “build credibility in the community.”

Skaggs points to his experience with the Downtown Business Improvement District and work helping the city of Spokane Valley incorporate as proof of his commitment to the community and local economic development.

Eventually Spokane and Spokane Valley will develop a “twin city” energy that will create more jobs, Skaggs said.

Skaggs also has experience working on legislative business at both the federal level, for Rep. George Nethercutt, and the state level, for former Washington State Sen. Jim West, now mayor of Spokane.

Those connections, as well as good relationships with members of the Spokane Valley City Council, will serve Skaggs well in his new post, said McCaslin.

It’s the local business community that’s a question mark.

Spokane-area economic development officials said last week they applaud the efforts of the county to spend money and commit more resources to job creation and business growth. They also said Skaggs may be a controversial figure, but what will matter is how he handles his new duties.

Spokane Regional Chamber of Commerce President and CEO Rich Hadley said Skaggs “is clearly very talented in what he does.”

Hadley, though, admitted he’s had a strained relationship with Skaggs. The relationship worsened when Skaggs worked on some civic campaigns and operated on behalf of Metropolitan Mortgage, which took active stances against the chamber and viewed Spokane’s chief problem as a downtown-centric business community.

Harris said attacks on Skaggs now are payback for those sorts of activities.

“There are some people who are blinded by that instead of looking at the good he can do for the community,” Harris said.

On Friday, Skaggs and Hadley spent an hour trying to get past the problems, Hadley said. Both men quickly agreed to move on, Hadley said after the meeting.

“He wouldn’t have been my first choice for the job,” Hadley said. “But clearly Erik is very passionate and gets results.”

Skaggs’ resume is also a plus, having worked both inside government and the private sector, Hadley said. At the same time, this is a new job for Skaggs. “It will be a lot easier to see how effective he is three months from now,” said Hadley.

Skaggs said that some of the anger stems from his work fighting the city’s participation in the River Park Square shopping center project, which created huge divisions within the community as some lined up behind mall developers and others behind Metropolitan Mortgage.

River Park Square is owned by companies that are affiliated with Cowles Publishing Co., which also owns The Spokesman-Review.

Though he doesn’t regret anything he did on the River Park Square issue, it’s now time to set aside those differences, Skaggs said.

Jon Eliassen, CEO of the Spokane Regional Economic Development Council, said Skaggs’ appointment could be a potential benefit to the county and other groups like the EDC.

The county had needed a “point man” inside the courthouse who can work as an ombudsman and problem-solver in dealing with other agencies in the area, Eliassen said. Skaggs’ job also addresses a criticism the county receives for not being easier to work with when existing businesses or new ones deal with permitting and planning hassles, Eliassen said.

Like Hadley, Eliassen met with Skaggs on Friday to discuss areas of common interest.

“I’m starting, with Erik, with a blank slate. I don’t have the history that some others have,” Eliassen said.

Skaggs said some of the criticism he’s received in the past week has been personally hurtful.

He bristled at accusations that he was involved in Metropolitan’s alleged defrauding of investors. The business failure of the company wiped out $580 million of investor wealth – much of it belonging to thousands of local senior citizens.

Although he was not a director at Metropolitan, he was named as a defendant in a class-action lawsuit.

“I was an investor, too,” Skaggs said, adding that his wife’s retirement investments were lost, as well as thousands of dollars in investments from their family members.

“The allegation that I would willingly defraud someone or participate in that is so wrong,” he said.

But Skaggs’ work for Metropolitan generated political criticism as well. Metropolitan got crosswise with the state Public Disclosure Commission in 2001 for campaign activities directed in part by Skaggs.

The PDC fined Metropolitan $10,000 for contributing more than was legally allowed to former Spokane Mayor John Talbott’s re-election campaign in its final three weeks.

The PDC found that Metropolitan had funneled more than $11,000 above the $5,000 limit to Talbott’s campaign through political action committees.

Right now Skaggs is planning an economic development summit on Dec. 8. The summit is being designed to clarify local economic development goals and which organizations and people should be responsible for the different strategies, Skaggs said.

He’ll also be available to help businesses navigate county permitting and planning procedures.