Conspiracy Denied

by Ladd B. Leavens & r & In a recent column ("Was it Conspiracy?" 9/22/05), William Stimson poses the question whether River Park Square was a "conspiracy."


He answers his own question in the affirmative, relying largely on a recent Tim Connor article that appeared in Washington Law and Politics, and in particular on the proposition that the city of Spokane loaned HUD funds to the developer of the renovated River Park Square mall but "failed to get any sort of loan security," so that, as Stimson would have it, the city had no way to demand repayment of the loan.


Connor's Washington Law and Politics article is yet another of a series in which Connor has exercised his own long-running personal bias against River Park Square and its owners. Stimson (and The Inlander) do not serve their readership well by relying on Connor's objectivity. Perhaps Connor's most cynically irresponsible insinuation (which Stimson unfortunately repeats in The Inlander) is the suggestion that the three directors of the Spokane Downtown Foundation were somehow engaged in wrongdoing. These three members of the Foundation (which was formed as an interim garage owner while the bonds were issued and then retired) were and are longtime civic leaders in Spokane. They served for years as volunteer directors of the Foundation and never received a dime in compensation. For their troubles, they endured nearly four years of litigation, along with Connor's and now Stimson's pejoratives. These three citizens deserve accolades, not scurrilous innuendo.


Connor and Stimson are incorrect in alleging that the city did not obtain security for repayment of the HUD loan. The developer pledged as collateral the rent that it received from Nordstrom, 47 percent of the ground lease payments on the parking facility, and an additional $500,000 per year in cash. What the developer refused to agree to was an unconditional guaranty that if these revenue sources were insufficient to repay the loan, the developer and its parent company, Cowles Publishing Company, would make up the deficit. The city at the time was free to accept or reject these terms, and accepted them.


To suggest, as Connor and Stimson do, that these terms were a secret, is nonsense. All of the loan documentation was available to the public, including opponents of the project. The nature of the collateral and of the Cowles' guaranty were openly discussed at City Council meetings.


A conspiracy requires conspirators. Stimson never identifies them. If he intends to include the developer, he is just wrong. The Cowles group negotiated hard on the transaction, but so did the city. After the political winds shifted in late 1999 and newly elected City Council members chose to renege on the city's part of the deal and sue the developer, every cross-claim that the city asserted against the developer in the federal litigation (and in particular the claim of misrepresentation to which Stimson alludes) was dismissed before trial.


Perhaps Stimson's point is merely that the City Council in 1997 was insufficiently forthcoming with its constituents. That is a matter for the council and the citizens of Spokane to judge. Certainly the persons who opposed the project during its conception, like Steve Eugster and John Talbott, were well aware of the details of the transaction. My own view is that the matter was very thoroughly aired, and that a number of subsequent unforeseeable events, not the least of which was the city's reversal of position and attack on the project, created the circumstances that ultimately led to the settlement about which Stimson complains.


Your readers may be interested to know, incidentally, that Cowles Publishing Company has accelerated its commitment in the settlement agreement to guarantee of the repayment of the HUD loan from the city. On Sept. 28, the company paid off the developer/city loan entirely, permitting the city to purchase other security for repayment of its loan to HUD. The developer's early action permits the city to borrow against future HUD grants for other projects to benefit the citizens of Spokane, if it desires to do so.


What Connor never mentions (but what Stimson, to his credit, at least acknowledges in passing) is the overall success of the project for the city of Spokane. The goal of the backers of the project, including Betsy Cowles and the city officials who unanimously approved the project, was to bring economic activity, safety and life back to the downtown core. That goal was accomplished and then some. Investment in downtown Spokane following the renovation of River Park Square has increased dramatically. The Davenport has been renovated and reopened as a stunningly beautiful hotel. New restaurants and clubs are in operation, and the activity has attracted residential developers to downtown. Through construction permit fees and increased tax revenue, the new economic activity is more than repaying the city of Spokane for its investment in the project.





Ladd Leavens is a Seattle attorney who represented River Park Square in the litigation over the parking garage.