Penciling Out

by Dan Richardson


Remodeling projects are notoriously expensive, but $1 million a week still sounds like some kind of record. That's how much Walt and Karen Worthy were shelling out at one point in the renovation of the 14-story Davenport Hotel. So it's probably no surprise that the project topped out in the $36 million neighborhood.


After 17 years' standing empty except for maybe a few pigeons, the much-ballyhooed Davenport Hotel celebrates a "soft" reopening on July 13, complete with public tours. The reopening is already generating media interest of Krispy Kreme proportions, but a serious question remains: Can the Worthys market an institution of style and wealth in what is essentially an isolated old mining town? In other words, will their Davenport succeed?


Yes, says Matt Jensen, the hotel's 36-year-old sales and marketing director, while sunk into a lushly cushioned high-backed chair above the marbled Spanish Renaissance-inspired lobby. Yes, it will. Probably.


There are regional competitor hotels like, say, the Benson in Portland or the Four Seasons Olympic in Seattle, says Jensen, "but nothing as elegant, as opulent in the region... We're going to be in this exclusive little niche. There's a market for it out there. There are luxury hotels all over the country that do very well. We just feel with the product we've got here and the service we're going to provide, there's no reason we should fail."





There's nothing like it. That's what Davenport boosters repeat, mantra-like. Jensen worked for years at the Grand Hyatt in San Francisco and the Hotel Monaco Seattle; they were upscale boutique properties, he says, but lacking the history and classic elegance of the Davenport.


Fellow developer and downtown businessman R. Ronald Wells -- who with wife Julie Wells renovated the Steam Plant -- is almost beside himself with enthusiasm for the Worthys' Davenport. ("It's like a whole city block is rising from the dead," he gushes.)


"There's nothing like it between Seattle and Minneapolis. And some people say there's nothing like it in Seattle," says Wells.


Hotel officers are banking on that enthusiasm and distinction, that corporate travelers and enthusiastic alumni following their sports teams to Spokane will drop $159 for a standard room at the Davenport. The 284 guest rooms will include a few on the third floor for $129 and some higher-priced ones, including a $1,900-a-night penthouse suite; they've sent a letter to President Bush inviting him to stay at the D during any stopovers he might have in Spokane.


But short of written invitations, how might a Spokane operation attract people? Through powerful contacts, says Jensen. Among these are ESPN founder Stuart Evey, an area resident with strong connections in the collegiate sports world. Then there's membership in Preferred Hotels & amp; Resorts Worldwide, a marketing association for independent luxury hotels. That membership will help the Davenport compete against the Hiltons of the world, says Bob Van Ness, vice president of worldwide sales for Preferred Hotels. By plugging the Davenport into Preferred's sales team, this Spokane hotel can market itself to corporate travelers from Chicago to London and travel agencies from Los Angeles to Hong Kong.


And maybe, just maybe, the Worthys could recoup their $36.5 mil and run a landmark luxury hotel in Spokane.


The industry standard often assumes a heavy load of debt from the building of a given hotel and the stiff franchise fees levied by chains like Marriott or Hyatt, says Van Ness. The Worthys, on the other hand, have paid for most of the hotel's rebirth with cash and built it through their own construction company. That eliminates the usual hefty mortgage payment. Jensen says they owe a "little bit" for furnishings and other soft goods, "but it's not substantial by any means."


Room rates necessary for success at major hotels average 60 to 80 percent, given variations depending on season and even day-to-day, according to Van Ness.


The Worthys' debt-free Davenport "makes it possible for [them] to run a ridiculously low occupancy rate and still be successful," says Wells.


The Davenport will be about more than imported Irish linens and soft beds, says Jensen. The building will boast 25,000 square feet of rooms for meetings, weddings and other functions, with names like the Marie Antoinette ballroom; retail space from a candy store to a florist; a restaurant (the Palm Court), and lounge (the Peacock Room) with a cigar-and-brandy room. These things will attract diners and shoppers to the Davenport who would not otherwise wrinkle a sheet there, bringing in money to a multifaceted business.


Jensen suggests that meetings, dinners and such will generate perhaps as much as half the D's income. "When they're at the symphony, when they're at the Met, where are they going to meet? They're going to meet at the Davenport."





Rich Hadley, president of the Spokane Regional Chamber of Commerce, sees the Davenport in larger terms. It's generating a critical mass of high-end recreation and luxury lodgings in the region, competing with but also complementing places like the Hotel Lusso in downtown Spokane and the Coeur d'Alene Resort.


He and other observers suggest taking a step back and looking at the Davenport in context. Five years ago, Spokane's downtown was limping toward a postmodern grave. Then the Cowles family renovated River Park Square. Now the Davenport is rising. On the horizon is the convention center expansion. The result, predict folks like Wells and Hadley, will be a revitalized, muscular destination that boasts classy facilities.


When workers were building the Lusso, conventional wisdom said Spokane wouldn't support a luxury hotel, recalls Wells, of Steam Plant fame. Before that, when Duane Hagadone was building his towering Coeur d'Alene Resort in the 1980s, Forbes magazine published an article questioning the wisdom of such an investment. Both times, naysayers were proved wrong, says Wells. The Davenport is the subject of much gushing, but it too will win big, Wells says. If nothing else, the Worthys have an enviable development track record.


"Walt and Karen have project after project and year after year defied the odds and made them work. When they started buying those ugly grocery stores and turning them into cash machines, people said they were crazy," says Wells.


History isn't the only strength of the Davenport. There's also the emotional and personal connections many people around the region have, and will form to it. A couple of weeks ago, the Washington Roundtable, a group of CEOs from the 40 largest companies in the state, met in Spokane and saw the Davenport, says Hadley. "We got direct feedback from three or four of them that said, 'Wow! We never expected this. We're going to start bringing some of our corporate meetings over here."


That's the kind of interest the Worthys have to build on to succeed; they have to reach company leaders and decision-makers with their marketing.


"No business succeeds without a good business plan and without excellent marketing to the niche customers," says Hadley. "The fact that they're able to develop this without debt was a critical factor, but it doesn't guarantee success without the usual customer service."


The Davenport has that in spades, promises Jensen. If nothing else, he says, the hotel is about being the best -- the finest rooms, the most elegant setting, the sharpest service.





In the early 1990s, a couple of writers with fancy initials after their names flew into town to write a sort of state-of-Spokane report. It was the kind of look -- scores of interviews, hours of research -- they'd taken for other "Peirce Reports" they'd written for cities like Seattle, Phoenix and Philadelphia. Spokane, they wrote, had much going for it. "Investment, will, imagination and energetic collaboration will add up to success for downtown. But in Spokane's case, we see another necessity: a restored Davenport Hotel."


Like Memphis' pyramid or Phoenix's laser beam, communities seek symbols showing others what they are about, they wrote. "Spokane already has the perfect symbol of a strategy of going back to history to create one's future. It's the Davenport."


Perhaps these researchers were right, that the Davenport can become a symbol of a progressive, energetic new Spokane region. That would be great for all concerned; as Wells says, it could "put Spokane on the map." But even symbols sometimes have to meet the bottom line.