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Sunday, July 5, 2020  Spokane, Washington  Est. May 19, 1883
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Money and politics

Shaun Cross, who served as a board member of the countywide Spokane Public Facilities District during the development of the Convention Center expansion, hugs PFD Executive Director Kevin Twohig at the 2004 groundbreaking. The PFD is headed by volunteer professionals rather than elected officials.
 (Brian Plonka / The Spokesman-Review)
Shaun Cross, who served as a board member of the countywide Spokane Public Facilities District during the development of the Convention Center expansion, hugs PFD Executive Director Kevin Twohig at the 2004 groundbreaking. The PFD is headed by volunteer professionals rather than elected officials. (Brian Plonka / The Spokesman-Review)

Spokane’s expanded Convention Center owes its completion to the balancing of two conflicting community values: a reluctance to pay for new taxes versus a long-standing desire for improved public facilities.

Political dealing and ingenious financing became the keys to reconciling the differences.

“With any project like this there are hundreds and hundreds of challenges,” said Shaun Cross, who served as a board member of the countywide Spokane Public Facilities District during development of the project.

The PFD – an appointed, independent board with limited taxing authority – won the confidence of voters after successfully completing the Spokane Veterans Memorial Arena in 1995. It was given the job of developing the enlarged Convention Center through a countywide ballot in 2002.

Proponents of the Convention Center faced considerable opposition in the planning over concerns about the proper role of government, fair use of tax resources, and a dispute over the location.

Even today, critics have issues. Davenport Hotel owner Walt Worthy said the PFD picked the wrong site east of the original Convention Center. Instead, the district should have torn down the aging facilities and rebuilt on the same site, Worthy said.

“I think they messed up,” he said, predicting the Convention Center will have trouble attracting repeat business, in part because of inadequate parking. “I hope I am wrong.”

Cross said the negative views will evaporate in time. “I think you are going to have trouble finding people who were against it in 10 years,” he said.

The genesis of the expansion dates to the 1980s when Spokane took on another problem: replacing its aging Coliseum, the predecessor to today’s Arena on West Boone Avenue. Special state legislation in 1988 and 1989 gave Spokane County the ability to form a PFD and gave the PFD the authority to collect a 2 percent hotel-motel guest tax and a one-tenth of 1 percent countywide sales tax, but only with voter approvals, which were won in 1990 and 1991, respectively.

Economic growth then generated surpluses that became the political starting point for what evolved into the $89 million Convention Center project.

The Spokane-inspired PFD law proved so successful in its early years that it was modified by state lawmakers in 1999 to allow convention and special events projects around the state, as well as costly new stadiums for professional sports teams in Seattle.

As a tax equalizer and incentive, lawmakers offered local governments a 0.033 percent rebate on state sales tax collections to build their own new convention facilities through local PFDs.

Bill Williams Jr., former chairman of the Spokane PFD and founder of Telect Inc. in Liberty Lake, said the prospect of moving the PFD into the dual role of operating an Arena and a bigger Convention Center was initially daunting, and he was skeptical, but the sales tax grant offered by lawmakers was hard to pass up.

That grant, or rebate, was worth $36 million.

“We came to believe it would be a tremendous benefit for the community,” Williams said.

“If we had passed that up,” Cross said, “… we would have ended up with a capital ‘S’ on our foreheads for stupid.”

Former state Sen. Jim West, who later served as Spokane mayor, helped shepherd legislation that made the Arena and Convention Center possible. He said recently the key to both projects was creation of the independent city-county PFD headed by volunteer professionals rather than elected officials.

The other key, he said, was finding the right approach to taxes and giving voters the ultimate say in whether the taxes should be collected under detailed proposals.

Legislative authorization for a local sales tax also proved critical because it needed only a 50 percent “yes” vote rather than the 60 percent needed for property taxes.

The PFD won its initial sales tax funding for the Arena in 1991 with 55 percent approval, just a year after a property tax measure was defeated with a 52 percent “yes” vote.

That same year, some local leaders were predicting Arena tax surpluses, and they began talking about using the excess for the county’s fairgrounds and a former zoo at Mirabeau Point in Spokane Valley. Expansion proposals for the Spokane Convention Center soon surfaced as well.

Legislative changes to the PFD law in 1999 left the PFD as the only taxing entity with the practical ability to pay for the proposed Convention Center expansion, and the board had to mediate a series of issues.

One hurdle involved winning the support of the hospitality industry for extending collection of the Arena’s hotel-motel tax to development of a new Convention Center.

Local leaders also had to win support from constituencies outside Spokane, who viewed the expansion project as one more public tax plum for the city. One of the compromises involved carving out $12 million for improvements at the Spokane County fairgrounds and $7 million for a community center in Spokane Valley.

Former County Commissioner Kate McCaslin spearheaded the drive to get money for the fairgrounds and Valley projects, in part because she felt residents outside the city deserved a return on their share of the local taxes. “The Fair and Expo Center is a much, much greater used facility in the area,” she said, adding that its users are the taxpayers.

There also was concern about a sophisticated bond financing arrangement in the midst of a separate failing public bond deal involving River Park Square’s parking garage. The 2001 terrorist attacks in New York and Washington, D.C., triggered fear that conventioneers would not travel to Spokane.

Proponents used a detailed 400-page report to answer critics and to outline the project.

Voters approved the project in May 2002. Proposition 1 allowed the PFD to take over management of the Convention Center and extended the Arena sales tax. It won with 57 percent approval. Proposition 2 to extend the 2 percent hotel-motel guest tax won with 63 percent approval.

Some private interests in the downtown core wanted the new facility built south of the Opera House, now called INB Performing Arts Center. The PFD board chose a site to the east along Division Street at Spokane Falls Boulevard because it was larger, closer to the river and had private owners who were more cooperative about public acquisition of their land.

The south site was promoted as being closer to the heart of downtown and its shops and restaurants.

Williams said he once wondered aloud why south-site supporters couldn’t understand their choice was simply too small.

Worthy and another proponent of the south site were later appointed to the PFD board but subsequently resigned.

Local government leaders also haggled for months over financing. Spokane city and county officials couldn’t agree on guarantees if tax revenues fell short of bond payments. The deadlock was broken when bond experts devised a way to allow the PFD to guarantee the bonds.

County and Spokane Valley officials extracted additional concessions for portions of any potential surplus taxes when the last of the Convention Center bonds reach maturity in 2033.

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