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Shawn Vestal: On big projects and incentives like Grand Hotel, city needs to get it right

The Davenport Grand Hotel will open before controversy closes over city contributions to the project.

That’s simply backward, no matter how good the project is for downtown – and there is every reason to think it will be very good indeed. As Mayor David Condon, the City Council and even hotel developer Walt Worthy debate just how it is that the city is on the hook for $318,000 the council has not yet approved, one point of agreement has emerged: The city needs a clear, clean, consistent plan for how and when it offers incentives to developers and businesses.

The Grand Hotel deal has been portrayed by Condon’s critics as an example of his giddyup style gone wild: In 2013, when the city was working to draw Worthy into the project, the mayor, his staff and Worthy outlined a plan in which the city would contribute more than $3.3 million in incentives, including up to $2 million in pollution cleanup. In the end, the cleanup costs came in much lower, but council members are balking at paying the bill, saying they were not properly informed.

It’s a simple issue, said Councilman Jon Snyder: “You can’t spend more than $50,000 of city funds without the approval of the City Council.”

Condon said the terms with Worthy were not a final agreement, but “partnership parameters” that were always understood as depending on the council’s approval. He also said council members were present at briefing sessions where the terms were discussed, and that the final say still rests with them.

“There is no agreement,” he said in an interview this week, adding that he made it clear: “ ‘Mr. Worthy, you do realize I can’t authorize all this without council approval?’ ”

For his part, Worthy has characterized the deal as a “commitment” and said he expects the city to honor it.

A similar lack of clarity surrounds the plans to expand the Larry H. Miller auto dealership. Questions about historical buildings and, now, proposals to shut down two blocks of Madison Street arose well into the process – a situation that left the dealership frustrated and critics of the street closure feeling that the whole thing was prebaked. The council is now considering whether to grant the request to close that stretch of Madison, but it’s a much trickier question than it would be if it had been raised earlier.

Snyder said the Grand Hotel is not the only example of a time the administration has overspent 50 grand without council approval, citing a decision to commit $200,000 for entryway work at the Division Street triangle.

The hotel expense has been portrayed as a case where two gung-ho, get-er-done types – Worthy and Condon – just collided and got-er-done.

“The problem with that is Walt’s spending his own money. The mayor’s spending your money,” Snyder said. “If you want to spend a couple hundred thousand dollars of taxpayer money, you can’t just write a check.”

The question of how the city provides incentives to businesses is an important one. Spokane is seeing a “doughnut effect” of businesses locating outside city limits, in large part because of market forces, Condon said. And so the need to encourage businesses, and particularly major projects like the Grand and Larry H. Miller, is great, and there are a lot of pieces to that, from parking requirements to tax abatements.

He said there have been cases when the city has not done a good job of keeping everyone informed as projects were proposed and developed, and said some of that traced back to the way former planning director Scott Chesney handled projects – what one former city official characterized as “overpromising.”

The debate over methods and means is a common one when it comes to major projects, Condon said, noting that many transformative projects we now take for granted, like the creation of Riverfront Park and all that entailed, were hotly argued at the time.

He said the city needs a clear matrix for when and how it uses incentives, and said he wishes the City Council would focus on helping to create one. Snyder said the council had begun discussions about such a policy with city staff, but the effort stalled on the staff side. He also said the mayor was attempting to blame the council for his “failure to run the correct process.”

But isn’t this a worthwhile end, whatever the means? Won’t the Grand Hotel be such a boon that we’ll soon forget the details of how the city contributed $318,000 – or didn’t – to a $138 million project?

Snyder says it matters, and he points to another big-time development for comparison: River Park Square. The project drove a huge renewal downtown, and laid the groundwork for all the positive development that followed – and I’m not just saying that because the family that owns the mall also owns this newspaper.

But the city also hastily committed itself to an unexamined deal in that instance, and the result – from the taxpayer cost to a mountain of lawsuits to questions about the way this newspaper covered it all – put a stink on the whole idea of public-private partnerships.

“I think River Park Square was essential to the rebirth of downtown … but it’s left a lingering bad feeling among folks about public-private partnerships in the city,” Snyder said. “Public-private partnerships are a crucial component of any highly functioning, ambitious city. That’s why we need to be so transparent.”

Shawn Vestal can be reached at (509) 459-5431 or shawnv@ spokesman.com. Follow him on Twitter at @vestal13.