Fight turns to Penney’s building

Attorneys for the former River Park Square mall manager are trying to force a sale of the old J.C. Penney’s building to pay off part of a $6.5 million judgment against the Cowles development companies.

The downtown Spokane building should have a receiver appointed and be sold, with the money going to RWR Management, that firm’s attorneys are arguing in papers filed this week in Spokane County Superior Court.

“A receiver can market the Penney’s building for sale to maximize its value, and do so without threat that (Cowles development companies) will take further, improper steps to hinder and delay RWR’s collection rights,” said a motion written by attorney Robert Dunn.

Steve Rector, the secretary-treasurer for the Cowles development companies, said company officials had not yet seen the motion and accompanying documents.

“We can’t comment until we can see and discuss it,” Rector said.

The move to force the building’s sale is the latest maneuver in the ongoing legal battle between the management company owned by Bob Robideaux and the Cowles family companies that own and operate River Park Square and the Penney’s Building.

River Park Square LLC, Citizens Realty, Lincoln Investment and CPC Development are subsidiaries or affiliates of Cowles Publishing Co. The publishing company also owns The Spokesman-Review.

Robideaux was the mall manager for Cowles development companies from 1988 to 2002. When Cowles officials told him in 2002 his contract would be terminated the next year, he filed a lawsuit and was terminated immediately.

That lawsuit went to trial last summer, and a jury ruled RWR was owed $6.5 million for work that Robideaux did but for which he wasn’t adequately compensated. The development companies have appealed that verdict but have refused to obtain a bond for the judgment while the case continues. The companies would forfeit the costs of that bond even if they eventually won the appeal.

The refusal to obtain a bond has prompted RWR attorneys to try to seize other assets while the appeal progresses.

CPC Development, which owns the Penney’s Building, filed for bankruptcy in October to protect that structure, which is the company’s only asset. The building is unoccupied but company officials say they have a plan for redevelopment. Its listed value for the bankruptcy is $2.4 million, but redeveloped and reopened it could be worth much more, company officials contend.

In December a federal bankruptcy judge threw the case out, saying it was essentially a dispute between RWR and the Cowles firms, not a true bankruptcy.

Earlier this month, RWR tried to force an outside development expert, Ron Wells, to reveal his suggestions for reopening the building with a major restaurant, stores and residential condominiums. At a hearing last week, Cheryl Adamson, an attorney for the Cowles development companies, argued the request to force Wells to testify was really a form of harassment.

“If (RWR) wants the J.C. Penney’s Building, go ahead and take it,” Adamson said at one point.

By filing for a receiver, “we took them up on that,” Dunn said Wednesday.

In their court filings, attorneys for RWR argue that the building is worth more than the $2.4 million value the Cowles companies put on it. It was purchased for $4.3 million in 1995, and CPC officials had received purchase offers of $5.8 million and $7 million since 2000.

One way to determine the building’s value is for a receiver to put it on the market, sell it and apply that money to the judgment against Cowles, Dunn said. He believes this would be the first time an asset of a Cowles corporation was taken over by a receiver and sold.

Rector, who is the financial officer for other Cowles companies as well, said he wasn’t sure that had never happened for a major asset by one of the family-owned firms that have been in business in Spokane for four generations. But he said he wasn’t aware of a case where that has happened.