Commentary by Ted S. McGregor Jr.

The recent spectacle surrounding the public-private revitalization of downtown Spokane is cause for worry to anyone who cares about the future of the city's core. With a hole dug in the ground and entering the home stretch of the funding process, everyone surrounding the project is acting very strangely. Responding to news that Mayor John Talbott would take his concerns about the public financing to officials at the federal Department of Housing and Urban Development, one city council member was quoted in the Spokesman-Review saying that questions like those Talbott is expected to ask could "jeopardize the project. "

Huh? Are we to believe that the plan is so delicate it can't withstand such scrutiny? If that's the case, then the project is nothing like it's been advertised: a low-risk, win-win way to plant the seeds of prosperity in downtown. The only solace is in hoping that council member just doesn't have a clue.

The chaos continued later in the week as five council members sent a letter to HUD officials clarifying that Talbott (who has been in office three weeks) is not representative of the greater council. Duh. He wasn't even on the council when the application was made.

You'd hope -- maybe expect -- they'd have more confidence in the project, that instead they'd say something like, "Knock yourself out, John. This deal is so well put together and will be such a great deal for the city, there's nothing you could do to discredit it. "

But no, we get the "He's-not-really-that-powerful-and-we-can-outvote-him-anyway " letter, which is certain to raise more eyebrows at HUD than just saying nothing at all.

By the weekend, hysterical editors at the Spokesman-Review newspaper/developer were writing similarly nervous columns about how Talbott was going to kill the project (despite the fact that Talbott was quoted in their own paper saying he only wanted assurances from HUD that the plan was sound). The editors encouraged quick approval from HUD (along with taking the extraordinarily brazen step of publishing a statement -- "John Talbott is using public office for private payback " -- charging that the new mayor is corrupt).

Again, where's the confidence in this project? Why does everyone seem to think the plan is on such shaky ground? If we are to believe this threat to be real -- that the whole deal can be toppled by a few basic questions -- then maybe the critics are actually on to something.

Meanwhile, across the state, The Seattle Times is telling a significantly different story relating to that city's public-private revitalization plan: "...rosy projections absent public candor is flawed leadership. Even in a slumping market, officials must examine the details and make the case to the public that their dollars are being wisely spent, " read a Dec. 23 editorial.

Seattle is still recovering from the news that the city knowingly overpaid a developer by $23 million as part of a similarly structured downtown redevelopment project. No one at Seattle City Hall can account for where the overpayment is going (meanwhile they plan to ask for a tax increase to pay for improvements to their failing streets). The upshot of the Times coverage is that few elected officials -- and journalists -- asked any real questions of the project at the time it was accepted by the City Council. Now their downtown project -- which is still slow to come together on the retail side -- has to contend with bad press and the state's auditor, who is investigating the whole mess.

No one is suggesting that a similar overpayment is in the works here, but the lesson of Seattle -- to ask the questions before, not after -- seems to be one Spokane could learn from. And as far as Talbott is following that lesson, he should be supported not ridiculed (libeled?). Any time public money is being invested, the people have a right to know the risks involved.

The disclosure process cannot be allowed to drag on forever, of course, but there should be a forum to answer questions regarding the plan, which has evolved significantly over the years, making it difficult to keep up with. City officials have been open in sharing information and perspectives on the deal, but in their haste to get things moving, the city seems to be bending the rules by apparently violating its own agreement to vacate Post Street only after a lease was signed with Nordstrom. No signing has been announced yet, but Post Street has already been vacated.

At the bottom of it all is the simple question: Is it a sound investment to make? Not doing anything is a scary thought, but judging the plan has always been difficult because some significant issues have never been fully answered:

o Can the parking garage generate enough revenue to pay back the loan? This is an issue never addressed by an independent feasibility study, a concern brought up by both Coopers and Lybrand and the Gonzaga University review panel (the two groups to have studied the plan in detail). Without hard evidence of how the garage will perform, official proclamations about the city's parking meter money never being endangered are less persuasive. The developers have a parking study that shows ample success, but problems with it were identified by Coopers and Lybrand.

o How much collateral is being put up against the loan? The three GU professors on the panel pointed out that the lack of an appraisal of the Nordstrom building (which has been pledged as a guarantee against the loan) makes it difficult to evaluate the security of the loan. It'd be like borrowing against your house but not revealing to the bank what your house was worth. There is a provision for an appraisal of the building later in the process, but there is nothing in the loan agreement about the appraisal having to reach a certain amount as you might expect of a bank.

If the sudden nervousness among backers of the project is more genuine than paranoid, it may have started with the recent visit to Spokane of HUD's Inspector General. Perhaps the timing of the Seattle controversy will mean that Spokane's application will be looked at more closely than any previous application. HUD, like most government agencies, tends to react to press attention -- the report that NBC Nightly News was going to investigate a HUD loan in Norfolk, Va. prompted a new list of conditions from HUD. Norfolk later dropped its loan application (NBC never did the story). Whether HUD will require changes to the Spokane application should be known within the next several weeks.

Doing business with the public is tricky, slow and frustrating -- and in many ways, that's how it should be. River Park Square developers may feel like they're covering the same ground over and over by answering questions, but that may just be the price of a low-interest HUD loan.

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About The Author

Ted S. McGregor Jr.

Ted S. McGregor, Jr. grew up in Spokane and attended Gonzaga Prep high school and the University of the Washington. While studying for his Master's in journalism at the University of Missouri, he completed a professional project on starting a weekly newspaper in Spokane. In 1993, he turned that project into reality...