Stone threatens legal action if anti-Woodward attack ad over Trent shelter isn’t pulled off the air

At least one Spokane news station has pulled an election season attack ad criticizing Mayor Nadine Woodward and the city-run Trent Avenue homeless shelter in response to a legal threat from a political ally of the mayor named in the TV spot.

On Wednesday, KHQ, KXLY, KREM and Comcast each received a cease-and-desist letter from a law firm representing developer Larry Stone, who has donated $175,000 to support Woodward’s re-election campaign and other conservative-leaning candidates for city office, threatening legal action if the companies did not pull the advertisement. Attorney Mark Lamb wrote that the advertisement, which says that Stone has been enriched by Woodward and the Trent shelter, was defamatory.

“KHQ should be aware that, unlike most political campaigns, which end on election day, Mr. Stone has no intention of going away and allowing this defamation to go unanswered,” Lamb wrote in one version of the letter.

KXLY has chosen to pull the advertisement, General Manager Teddie Gibbon said in a brief interview, but otherwise declined to comment. KHQ does not plan to do the same at this time, wrote Station Manager Jason Ramsey in an email.

“After review with legal counsel and based only on the content of the message, it is difficult to find anything that rises to the level of defamation outlined in the cease-and-desist letter,” Ramsey wrote. “We take these concerns very seriously.”

KREM directed questions to President and General Manager RJ Merritt, who did not respond to a request for comment. A representative for Comcast, which places political advertisements on cable, could not be reached before deadline.

The short ad was produced by the Citizens for Liberty and Labor political committee, which supports mayoral challenger Lisa Brown. It features Edie Rice-Sauer, the retired executive director of Transitions, which operates apartments that serve the homeless.

Rice-Sauer attacks Woodward for allegedly having enriched Stone and bankrupted the city’s shelter system when the mayoral administration selected a warehouse owned by the developer and negotiated a lease agreement for “more than fair market value” to use the facility to house what would become the largest homeless shelter in Spokane.

Rice-Sauer adds that the facility doesn’t have running water and argues that infrastructure improvements approved by the city – namely $1.5 million to build bathrooms, showers and laundry facilities – were using taxpayer dollars to increase the value of Stone’s property. The attack ad cites a number of news stories published by Range Media, the Inlander and The Spokesman-Review.

Lamb wrote in his letter that all of the statements made in the ad are false and defamatory and provided specific rebuttals to the claim that Stone had been enriched by the deal. He claimed Stone had received a more lucrative offer from another potential tenant and only worked with the city out of the goodness of his heart.

“Larry Stone is a pillar of the Spokane community who stepped forward, at great cost to himself, to offer a solution to house the homeless in Spokane,” Lamb wrote.

Stone purchased the former trucking warehouse on East Trent Avenue in March 2022 for $3.5 million as the city struggled to find a location for a large congregant warehouse proposed by Woodward’s administration. Then-City Administrator Johnnie Perkins negotiated a lease with Stone for $26,100 per month, or $313,000 per year, up from around the $20,000 per month rate advertised under the prior owner. That led some to question whether Woodward was improperly financially benefiting a top political donor.

However, Lamb claimed that the prior owner had refused to lease the warehouse to the city for the purpose of housing a homeless shelter.

“… but for the Stone Group stepping forward to purchase the property, the City would not have been able to put a shelter in the building,” he wrote.

Woodward’s re-election campaign weighed in as well, as did the Spokane Good Government Alliance, a political action committee supporting Woodward and affiliated city candidates. Stone is the second-largest donor to the alliance.

The Woodward camp filed a complaint with the state Public Disclosure Commission, calling it “wildly inaccurate” and asking the state to force the ad to be pulled off the air and for Brown to condemn the video. The Citizens for Liberty and Labor are not legally allowed to coordinate with the Brown campaign. Brown declined to comment for this story.

The campaign argued Stone was not being enriched because the payments to him were fair, and claimed the shelter, which the mayor has previously acknowledged is financially unsustainable, was not bankrupting the city because the City Council was expected to find a way to pay for it next year. Council members, for their part, have nearly universally said the shelter is an extreme financial burden on the city.

The campaign added that it was false to say that the shelter had no running water because staff have access to sinks and toilets, although the homeless use portable toilets and portable sinks that use foot pumps. The Woodward campaign also argued that responsibility for deciding to invest $1.5 million in the shelter fell on the City Council, not the mayor.

At the time, then-City Council President Breean Beggs said the council had been forced into that position by the mayor.

“Trying to use a large warehouse without bathrooms was a very ill-fated plan, and was mostly in my opinion an attempt to win a legal argument, not to really help people or the city,” Beggs said in May before voting in favor of the expenditure. “But if we’re going to have people there, we need bathrooms and showers.”

Beggs expressed further frustration at the time with the shelter site selection process that resulted in the Trent Avenue property being chosen.

“We were only given one option, and it was either that option or people freezing to death, so we took (the former) option grudgingly,” he said.

Jim Dawson, Eastern Washington director for Fuse Washington, a partner in the Citizens for Liberty and Labor PAC, argued that the ad was supported by the reporting of various news outlets and decried attempts by Woodward and Stone to stifle the group’s message. Citizens for Liberty and Labor has raised more than $350,000. The Spokane Good Government Alliance, which is backed by Stone, has raised $1.4 million.

“What this is is a really rich guy who’s trying to maximize his profits and is OK throwing his money around, both in politics and in threatening media outlets with lawsuits, for something well-documented in the newspaper,” Dawson said in a brief interview.

Dawson added that the committee was still processing the legal threat and had not decided on a response to Stone’s at-least partially successful attempts to pull the ad off the air.

“We haven’t developed a plan yet on how to respond if they take the ad down,” he said. “We’re not a rich special interest with tons of lawyers on our side.”