Sale of Otis Hotel, work on Montvale and Odd Fellows buildings raise hopes for western downtown Spokane
Sun., Oct. 30, 2016
Jerry Dicker has put a finishing touch on the Montvale Hotel in downtown Spokane, Wash. (Dan Pelle / The Spokesman-Review)
Nearly a decade ago, developers saw promise in downtown Spokane’s historic West First Avenue block, snatching up buildings with the hope of transforming low-income housing into an urban destination.
In January 2008, developer Jeff Smith told a reporter, “That entire strip down through First Avenue is really going to take off.” Smith had just bought the Jefferson and Norman buildings, built a hundred years earlier, with the intent to attract boutique retailers after renovations totaling an estimated half-million dollars. Other developers had similar plans for the block.
A variety of factors, chief among them the crash of the American real estate market, tempered expectations. Many of the properties lay dormant or switched hands as the prospect of improving the buildings showed diminishing returns.
“The West End’s been a little slow,” said former Spokane City Councilman Steve Salvatori, who at one time owned three historic properties in the downtown core.
But new life is visible along the block, due in large part to the recent efforts of Spokane developer Jerry Dicker. His company bought up most of the real estate on First Avenue between Monroe and Madison streets, including a minority stake in the old New Madison Hotel, and has begun restoring the former International Order of Odd Fellows Lodge, the former Music City Building and the Montvale Hotel.
“Our mission here is to redevelop the entire block and make it one of the most exciting blocks in the city,” said Dicker, who also owns the Bing Crosby Theater.
Dicker’s efforts to revitalize West First may be aided by recent developments at the Otis Hotel. After a lengthy legal battle, attorneys said last week that ownership has shifted back to the bank and a new owner may finally be able to buy and restore the aging, mold-filled, 1911 brick building.
“The bank is excited about the potential there,” said Todd Reuter, a Spokane real estate attorney representing Coastal Community Bank, which now holds the deed to the Otis.
Sale of the Otis building could be the final piece of the long-promised improvements to the historic downtown entertainment district, assurances that have excited local lawmakers and business owners for years but also led to the painful removal of dozens of low-income residents and shifted the work of area nonprofits.
‘I don’t have a hundred years to fool around’
The 76-year-old Dicker moved to Spokane to retire, but the Bronx native doesn’t show signs of slowing down. Weaving through rooms in various states of renovation Thursday, he called workers by their first names, asked for the details of an elevator floor’s restoration and how to work a television monitor.
“I don’t have a hundred years to fool around,” Dicker, pork pie hat in hand, said in the second-floor lounge of the Odd Fellows Lodge at 1017 W. First Ave. “I’ve got a job. I’m on a mission here.”
That mission has included restoring the Montvale, a 36-unit boutique hotel Dicker bought for $2.3 million in July 2015. Since then, the skylight, stairs and lobby have been scrubbed and rebuilt. The second-floor lobby now features leather sofas and lounge chairs, as well as a fireplace Dicker and his wife, Patty, installed in the past 15 months. Dark green railings and woodwork pop from the peach-colored walls, which Dicker refers to as “the wow factor.”
Following the Montvale purchase, Dicker bought the next-door Music City Building and the Odd Fellows Lodge, at a total cost of $1.5 million, in December. He plans apartments for the Music City space, and an event center offering limited programming already has taken over the first two floors of the lodge.
A three-story wooden staircase leads from the Odd Fellow’s entrance off West First Avenue to ballet studios on the lodge’s top floor. Dicker built a kitchen on the south side of the first floor and is installing the finishing touches on a bar above street level, with street-facing windows that look out onto the southern facade of the Fox Theater. Dicker has no plans to remove the Ella’s Supper Club neon sign, a remnant from the short-lived jazz venue that partnered with CenterStage dinner theater back in the mid-2000s.
“Anything that was really nice, we kept,” Dicker said.
The new space, named the Montvale Event Center, may incorporate the Ella’s name into the refurbished theater and bar on the building’s second floor, Dicker said.
The developer wouldn’t speak about previous ownership of the block, choosing instead to focus on the future.
“I don’t know what happened 10 years ago,” Dicker said. “We do one project at a time, and we finish it. All of our projects are finished.”
At the same time Dicker has focused on the eastern part of the block, the owners of the Madison are at work filling the first floor with retail following a foreclosure sale in April. The building is now owned by a group headed by Spokane sports franchise owner Bobby Brett. Chris Batten of RenCorp Realty said only one retail space on the first floor remains to be rented.
“The block has been under such poor ownership for so many years,” said Batten, who also was involved in the 2007 sale of the Otis. “It just really needed new ownership.”
New ownership also may be in the cards shortly for the Otis, which has sat vacant since long before Dicker started his work on the block.
The Otis: The final piece of the puzzle?
Bankruptcies, foreclosures and disputed deeds have created a tangled weave for the Otis, not unlike the Ridpath on the other side of downtown. All of those actions require lawyers, and a fair share of them have toured the Otis in the nine years since the building’s low-income occupants were forced out.
Kevin Roberts was retained by an appraiser who was sued by the building’s longtime owner, Seattle-based developer Mike Sherry. He entered the Otis for a tour without knowing the television series “Z Nation” had rented the location for filming.
“There was all this blood on the wall, fake blood,” Roberts said. “It was pretty creepy.”
Actors portraying zombies, and post-apocalyptic survivors fleeing zombies, are the only occupants the building has seen since closing in 2007, forcing onto the street dozens of residents unable to find housing elsewhere. The memory, and the nine years of inactivity, still upsets Rob McCann, executive director of Catholic Charities, who was part of a mayoral task force set up to help relocate the Otis residents, many of whom had nowhere else to turn.
“I drive by it all the time, and I just go, ‘Ugh, there it is,’ ” McCann said. Catholic Charities decided to undertake its own ambitious building project as a result of the displacement, what McCann calls “the Otis catastrophe,” with plans to end chronic street homelessness in the city by 2020.
The Otis served as a place for those who were ineligible to receive housing anywhere else, such as drug dealers and sex offenders who were released from prison, McCann said. While he acknowledged the housing wasn’t perfect, it did provide shelter to those who couldn’t find it.
“When they announced they were going to close that, we were all very upset in the social services world,” he said. “We hoped it wouldn’t happen. We prayed it wouldn’t happen.”
The Otis sat vacant for years, accruing water damage, and the property value of the hotel plunged significantly in the years between 2008 and 2014. A new owner likely will need millions of dollars for renovations, whether for a residential or commercial project, attorneys and real estate agents said. One company estimated in March 2013 that it would cost at least $1 million just to remove the mold that has collected in the years since the old hotel was vacated.
“It’s going to take someone with some backing,” said Mark McLees, a local real estate broker with the firm NAI Black.
Development companies and the city of Spokane have been closely watching developments at the hotel, which has continued to depreciate in value and was even blocked by fencing for months over safety concerns about sidewalk vaults. Through the city’s legal process for examining substandard buildings, temporary sidewalk repairs were made and the fencing has been removed.
Dicker said he was monitoring what was occurring west of his block, but didn’t say if he was interested in buying the Otis. Officials representing Beacon Development Group, which helped restore the Pearl on Adams Street, and Centennial Real Estate Co., which is refurbishing the Chronicle Building into housing and has mixed-use plans for the former downtown Macy’s, say they may pursue the Otis.
“We’re still interested,” said Barry Baker, senior housing developer for Beacon. Baker said the building likely could be remodeled into a roughly 80-unit complex for senior citizens, putting it in line with the Parsons Building down the block. Operated by Spokane Housing Ventures, the Parsons has 50 units for qualifying residents ages 62 and older.
Doug Yost, of Centennial Real Estate Investments, confirmed Centennial’s interest in the property. The company is a subsidiary of the Cowles Co., which also publishes The Spokesman-Review.
Salvatori, the former city councilman, and Ben Stuckart, City Council president, said the Otis ideally would feature retail space on the first floor with housing above. McLees, the real estate agent, said multifamily housing “would make the most sense,” given the amount of capital that would be needed to repair the inside. According to court records, the building also needs improvements to make it accessible to people with disabilities, and make the fire escapes safer.
The City Council has put a premium on housing projects downtown, extending tax subsidies to Centennial and other developers in recent years to create apartments in the downtown core.
A rebuilt Otis, together with the improvements Dicker has made along First, could finally give the block its anchor project as development shifts to western downtown, Salvatori said.
“I hope it can be saved. To me, it’s an iconic building,” he said. “It’s going to take someone with a vision, and some money. The timing’s right now.”
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