Spokane Valley to enter mediation in City Hall lawsuit, total costs expected to rise

Spokane Valley and the contractors who built City Hall have agreed to enter into mediation in the lawsuit over the building’s defects, but the city is not quite done paying for the expensive litigation and repair efforts.

City staff began noticing structural deficiencies in the $14 million building shortly after it opened in 2017. Most notably, the curved wall on City Hall’s northeast corner was sinking.

In April 2020, Spokane Valley sued Meridian Construction, Architects West, Allwest Testing & Engineering and Eight31 Consulting, hoping to force the companies that built City Hall to pay for the repairs.

Despite a challenge from Meridian, which sought to have a judge dismiss the case, depositions are ongoing, and the lawsuit is scheduled to go to trial July 7, 2025, according to City Attorney Kelly Konkright.

Konkright said in a presentation to the Spokane Valley City Council Tuesday the two sides have agreed to discuss a settlement and that a mediator has been selected to oversee the talks. The mediation will stretch from Oct. 28 through Nov. 1, according to a report included in the agenda for Tuesday’s meeting.

Before the mediation, however, the Valley will need to approve another $300,000 to see the litigation through. That figure would be in addition to the $6.1 million already budgeted toward the repairs and lawsuit. Only $100,000 remains, according to the report.

The city entered into a pair of contracts for the investigation and repair of City Hall in 2023: a $355,000 agreement with the construction management and engineering firm CBRE/Heery, and a design build agreement not to exceed $4 million with Garco Construction. Prior to those agreements, the city had already spent $800,000 on repairs.

Senior Engineer Glenn Ritter told the council Garco is nearly done with its repair and restoration efforts, which penciled out to around $3.7 million. Garco’s work included correcting issues in the council chambers, the HVAC system and the roof of the building, Ritter said.

Since the city’s litigation is ongoing, any further discussions with the council regarding the lawsuit or settlement discussions must be held in private, Konkright said.

“When you’re in active litigation, it’s important to be circumspect with public statements we make, or statements we make in public regarding the litigation and the specifics of the litigation,” Konkright said. “Because that can impact both the mediation and, eventually, trial, if the parties cannot resolve the claims short of trial.”