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Spokane, Washington  Est. May 19, 1883

Otis Hotel renovation hit with $140,000 in fines for asbestos violations

The close Otis Hotel is located at the corner of First and Madison in downtown Spokane, Wash. (Dan Pelle / The Spokesman-Review)

Three companies renovating the Otis Hotel in downtown Spokane have been cited for violating state health and safety rules, receiving fines totaling nearly $140,000, the first round of financial penalties stemming from the companies’ mishandling of cancer-causing asbestos material in the historic hotel.

One of the companies cited by the Washington state Department of Labor and Industries is owned by Curtis Rystadt, a former mortgage broker who purchased the building for $1.4 million in June 2017. Rystadt’s company, Portland-based Hos and Boz LLC, was fined $24,500 for eight “serious” and three “general” violations of worker safety rules. The company also was fined $45,000 for 16 “serious” violations of state rules regulating hazardous materials.

Santiago’s Handyman Services, also of Oregon, received the same fines as Rystadt’s company, totaling $69,500. A third company, 4 Aces Restoration, based in Kent, Washington, received a $200 fine for not informing the state of when it would be handling asbestos.

Rystadt and Abundio Santiago have appealed the fines, beginning a potentially lengthy process that could lead to the state’s Board of Industrial Insurance Appeals and Spokane County Superior Court.

The Spokane Regional Clean Air Agency is preparing its own notice of violations, which also will come with monetary fines. The agency would not discuss the violations since they have not yet been issued.

The citations and fines follow inspections in March, when air quality inspectors found signs of improper handling and disposal of asbestos-laden material from the 107-year-old downtown building. The state labor agency issued an “order of immediate restraint” on March 9, and construction was delayed for three months while local and state inspectors investigated the handling and removal not just of asbestos, but also lead, which is in the aged building’s paint.

Rystadt denies any wrongdoing and says he has documentation to prove his innocence. Instead, he blames “incompetency” and “bureaucracy” for failing to recognize he’s done nothing wrong.

“First of all, I’m not an employer. I don’t employ anybody,” Rystadt said, pointing to two specific violations that use the word “employee.”

“They were not my employees,” he said. “Even though I’m not the employer and I’m not responsible for that stuff, I do not want people working in unsafe conditions.”

Beyond that, Rytstadt said he hired 4 Aces Restoration to properly dispose of the asbestos material and left it to them to follow the rules. The company, which received a substantially smaller fine than Rystadt, did not return calls seeking comment. Rystadt said he spent more than $50,000 disposing of the asbestos and had 4 Aces Restoration in the building “three or four times” to dispose of floor tiles, popcorn ceiling and insulated pipes embedded in the walls. Each time, he said, workers wore masks and used a negative-pressure enclosure.

Rystadt also denied that the workers did not properly handle lead-based paint in the building.

The real issue, Rystadt said, was “incompetent” inspectors. He called one inspector with the state Department of Ecology a “bonehead.”

“It’s incompetency,” he said. “It is a bureaucracy that’s sad to deal with. I can see why people get frustrated with government.”

Lisa Woodard, spokeswoman with the local air agency, said 105 dumpsters were removed from the Otis by the time inspectors came to the site. At that point, debris in the building tested positive for asbestos. Similar debris was in two dumpsters outside the building.

Asked if people who live or work near the Otis should be concerned about exposure, Woodard said exposure is “predominantly” dangerous “if somebody is digging through and working in the piles” and suggested the “ambient” exposure did not jeopardize the health of people passing by.

“There have been a lot of problems with this project from the get-go,” Woodard said. “There’s going to be a lot involved in this entire project when we get to assessing the violations.”

Lori Rodriguez, compliance section manager with the clean air agency, said “many corrective actions have been issued” for Rystadt and the other companies, but the agency is preparing a list of violations, which will be issued by the end of November.

“Our violations usually carry monetary fines,” Rodriguez said, but she said it’s too early to say how much they may be. “Until we put all the information together … we really don’t know.”

Brook Beeler, spokeswoman with the Department of Ecology, said her agency was asked to look into the Otis project after inspectors with the Spokane Regional Clean Air Agency found lead paint.

“In Washington, it’s our responsibility to make sure dangerous waste is handled properly,” Beeler said. “We did some spot sampling. Those samples contained two times the allowable limit of lead.”

Following the discovery, the Department of Ecology and Rystadt formulated a sample plan, which has since shown safe limits of lead, and the state agency is no longer involved.

Whether his appeal is successful or not, Rystadt said he would finish his project to transform the Otis into Hotel Indigo Spokane, part of the global hospitality chain InterContinental Hotels Group. The hotel will have 112 rooms, a restaurant and a bar. It will open in spring 2019, according to a statement from the hotel group.

He likened his determination to “the spirit of Spokane” after the Great Fire of 1889.

“We’ll get the job done. We’re going to have a fantastic hotel,” he said.

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