City could buy hall

Spokane Valley might get a lot more for its money if the city bought its current City Hall instead of building a new one.

Owners of the Redwood Plaza, where the city has rental quarters, confirmed this week that the entire 5¾-acre office and commercial complex is available for $16 million.

That compares with a preliminary architectural estimate that it would cost $14.1 million to build a 55,000- to 60,000-square-foot building next year – not counting the cost of land, architectural fees of 8 to 10 percent of the construction cost, various other fees, sales tax or a 5 percent contingency allowance.

The Redwood Plaza includes the three-story, 74,000-square-foot Clocktower Building at 11707 E. Sprague Ave. and two one-story “wing” buildings on each side. The smaller buildings add 38,650 square feet, according to Jim Greenup, vice chairman of the Northwest Christian Schools Foundation, which oversees the complex.

In addition to 112,650 square feet of existing floor space plus basement storage space, Greenup said the package includes an 18,000-square-foot parcel that could accommodate another building. Even with another building, he said, Redwood Plaza would still have an unusually high ratio of parking with 462 spaces.

Ninety-five percent of the complex’s Class A office space was leased last fall, according to Greenup. The city is the primary tenant, with about 25 percent of the space, leaving a lot of room for the city to expand and a lot of tenants to help pay the mortgage.

The Spokane Valley City Council agreed earlier this year to a three-year extension of its lease on approximately 28,000 square feet. The rate will go up 3.6 percent in April, from $16.65 per square foot to $17.25, for a total of approximately $433,000. With 3 percent annual increases, the total will rise to $474,220 in 2012.

Redwood Plaza’s 19 tenants include the HuHot Mongolian Grill. Only the Alton’s tire store in one of the wing buildings would not be included in the sale price.

Greenup emphasized that Northwest Christian Schools doesn’t want to interject itself into Spokane Valley politics, but “we aren’t opposed to being considered as an option if that’s something they’re interested in doing.”

Although the complex isn’t currently listed for sale, Greenup said last year’s $16 million asking price is still valid.

“We’d still be willing to entertain an offer, you bet,” said Steve Trefts, chairman of the Northwest Christian Schools Foundation.

Trefts said Northwest Christian Schools acquired the complex when its builder, Spokane Valley developer and philanthropist Hank Grinalds, died in 1995 and left half his estate to the schools.

By some accounts, Grinalds supported incorporation and gave his building a clocktower motif in hope of municipal use. In any event, businessman Dick Behm said, Grinalds wanted a distinctive, centrally located building that could become a focus of attention.

Behm said Grinalds even considered a Space Needle-style restaurant at one point.

“He was a heck of a nice guy and loved the Valley very much,” Behm said.

The Northwest Christian Schools Foundation would like to sell the Redwood Plaza to diversify its portfolio, which is “quite heavy into real estate,” Trefts said.

There has been little public discussion of Spokane Valley buying the Redwood Plaza, but city officials say they were aware it was on the market. City Manager Dave Mercier said the city Finance Department reviewed the possibility and found it “not advantageous.”

Details of that analysis weren’t immediately available, but Mercier said the complex wouldn’t serve the City Council’s goal of redeveloping the University City Shopping Center as a “city center.” He said older buildings require more maintenance, and the Clocktower Building – constructed in 1994 – doesn’t meet the U.S. Green Building Council’s Leadership in Energy and Environmental Design standard for energy efficiency.

Also, Mercier said, financing a purchase with low-interest government bonds would restrict the city’s ability to have private tenants.

Trefts said foundation directors are open to various financing options.

“We’ll consider all offers,” he said.

Council members Rose Dempsey and Bill Gothmann say the council has considered purchasing the Redwood Plaza. Dempsey said she and Councilman Gary Schimmels were receptive, but the council rejected the idea. Gothmann thinks nothing has been ruled out.

Gothmann and Dempsey have sharply different views on construction of a new city hall. He voted with the council majority in March to authorize $377,000 worth of preliminary architectural work, subject to a second council vote to exceed $50,000. Dempsey and Schimmels dissented.

“I really feel like pursuing the city hall at this point is not a responsible thing to do,” Dempsey said this week. “The money is not coming, and I think people really are not prepared to authorize us to spend lots of money on a new city hall when we have a perfectly good building.”

Continuing to rent may be the city’s best option for the time being, she said. “Why do we have to jump into something?”

Gothmann thinks the city should own its own building for the same reason that individuals buy homes: to build equity instead of “a pile of rent receipts.”

He also likes the idea of building a new city hall with a “park-like setting” that would serve as a “magnet” in the proposed city center district. However, Gothmann said he needs more data to decide how much of a premium he’s willing to pay for those benefits.

Council members “owe it to our constituents” to gather information and present a plan for a new city hall, probably within the next two years, Gothmann said. But, he added, “the figures I have seen are not very comforting.”

If construction cost estimates can’t be reduced, Gothmann questions whether that option should be pursued.

Both Dempsey and Gothmann like Mercier’s idea of seeking a federal grant that would pay a high percentage of the cost of a “green building,” designed to be self-sufficient with regard to power, sanitation and other utility needs.

“I think it would be the most responsible choice that’s before us right now,” Dempsey said.

A “civic building capital projects fund,” expected to total nearly $5.8 million by the end of the year, would provide a substantial down payment on the purchase or construction of a permanent city hall.

But the city also has a giant pothole in its street maintenance funds, and Dempsey said she would like to spend the city hall money on streets.