Businesses had troubles before fire, from unpaid taxes to toxic gas

There was trouble at the Joel building before flames and water damaged or destroyed much of the structure Thursday.

Churchill’s Steakhouse and its owners had received a $27,558 Washington Department of Revenue tax warrant. About $4,800 was due to the Department of Labor and Industries.

A contractor had filed a disputed $45,397 lien on the restaurant premises.

And Dorian Studios Inc. owners Joe and Yvonne Mark had sued developers of the adjacent condominiums over carbon monoxide problems.

On Jan. 8, the lawsuit says, toxic gas generated by construction equipment in the basement at 165 S. Post St. seeped into Dorian’s premises. One employee had to be taken to the hospital.

When newly installed carbon monoxide detectors sounded the following day, an effort was made to plug holes that allowed the gas in.

After another incident on Jan. 24, the Spokane Fire Department ordered an evacuation of Dorian, as well as all construction workers on The Lofts at Joel condo development. Construction resumed in early February.

The Marks sued Feb. 14 when a letter seeking assurances the leaks would be sealed went unanswered.

In a June settlement, the Lofts agreed to stop using equipment that produced carbon monoxide fumes and to install an exhaust system that would vent the basement parking garage.

Spencer Stromberg, in-house attorney for Lofts developer Wells & Co., said the fan was not in place this week, but would have been necessary for the garage in any case.

“That’s all water under the bridge at this point,” he said.

The warrant, covering Churchill’s sales and business and occupation taxes for March and April, was issued June 17 and filed July 3 in Spokane County. Department of Revenue spokesman Mike Gowrylow said warrants are the last step before enforcement actions, including revocation of a business license, are undertaken. Usually, he said, warrants are issued when business owners do not respond to letters suggesting they come in to discuss why taxes have not been paid.

“We want to keep businesses in business,” he said, but collection efforts will continue even if Churchill’s does not reopen.

Elaine Fischer, spokeswoman for the Department of Labor and Industries, said Churchill’s had been current on its worker compensation premiums until the last quarter. Since then, the restaurant has fallen $4,800 behind.

Owner Bill Alles said he will sort out the issues with the state agencies. As to the lien filed March 14 by Architectural Woodwork & Design Inc., he said the claim was for work never completed. Architectural, he noted, filed bankruptcy in January.