by Robert Herold

The River Park Square "deal" emerges from the city's forced purchase of the garage at a price we know now to be maybe four times its true value. The Cowles agree only to guarantee a loan that they had already promised to pay off, and then, for the grand finale, the city agrees to give to them the garage that the city just bought. Out of concern for the city's poorest neighborhoods, the mayor and City Council made a compassionate decision. The developers, through their threat of bankruptcy, made a cold but effective one.

Now we are exhorted to stop all this negative talk. Our nervous boosters have settled on a new mantra du jour: "We need to move on." But does anyone other than maybe the Spokesman-Review editorial board really believe that "moving on" is possible? Under circumstances that Councilwoman Mary Verner, in her most eloquent statement, termed a web of entanglement? About the best face that can be put on this mess is, as Mayor Jim West pointed out, "the bleeding will be stopped." Well, sort of. Some might think that losing a battalion of cops, a platoon of firefighters and reducing library operations to only two days a week falls into the "continued bleeding" category.

Next month in court, our city's legal team will seek to recoup money from those the city relied upon for the "due diligence" that the city argues was never performed. We hope for success. In the meantime, opponents of the council's action demand that the Cowles be sued as planned so that we can once and for all get "full disclosure."

Friends, believe me, full disclosure is no longer the problem.

At the cost of millions of dollars, we have assembled a mountain of depositions that disclose and disclose and disclose. We aren't going to hear much new. Verner was right: If the city did take the Cowles to court, there would be no smoking guns, nor would there be any apologies. We know most of what we need to know. The fact of the matter is, we've had that full disclosure.

Here it is, in a nutshell:

- We know that the value of the garage was estimated by city staff at no higher than $18 million (others arrived at an even lower value). We know that the developers wanted even more than the $26 million finally agreed to. (The bonds were ultimately issued to the tune of more than $32 million.)

- We know that the council, without batting an eye, went along with the gag; they apparently never asked the most obvious question: "You know, if Pete Fortin, our very own budget guy, says that the garage isn't worth more than $18 million, shouldn't we maybe pay attention?"

- We know that those downtown business leaders who "tut-tutted" opposition as coming from people who lacked real business sense, turned out themselves to have serious deficiencies when it came to business. Apparently in Spokane's little business universe, analysis should never be allowed to stand in the way of "moving forward," defined in turn as belief in "hope against hope." Nonetheless, the energized boosterism was contagious; as Steve Eugster reminded everyone at the Saturday special session, even the "at risk" Community Block Development Grant neighborhood people supported the project.

- We know that the Coopers & amp; Lybrand report laid out all the risks, and concluded that the cheery estimates from Walker and others were unrealistic. We know that our intrepid council -- doing its own version of Alice in Wonderland -- then proceeded as if the report was actually an endorsement of the project.

- We know that while the council no doubt believed its own rhetoric when it announced that the city had successfully distanced itself from the project, neither the bond rating agencies, nor, as it turns out, the court, nor even the IRS, agreed with their public statements.

So that's what we know. But what have we learned? Here are a few clear lessons:

- We learned that the council should have, at the very least, insisted on better terms: In exchange for closing off Post Street, no ground rent. (Better yet, the developers get the street, and the city gets the land under the garage). The developers should have been required to guarantee the HUD loan. The terms of the Public Parking Development Authority loan arrangements should have been specified. And the city should have fixed penalties for failure to perform on matters such as parking validation. As Al French stated, it's only a partnership if both sides fight for a deal they both can live with.

- We learned that cities must avoid entering into a public-private partnership if its elected public leadership could readily be manipulated and its private partner happens to own the newspaper of record.

- We learned the council should also have insisted that Nordstrom speak for itself, rather than take at face value the unavoidably self-interested interpretation being filtered by the Cowles. Who knows what we might have learned? Perhaps that Nordstrom never intended to leave in the first place? - We learned that warnings about dire consequences if the city failed to act likely amounted to just so much bluster. Even in 1997, you had to ask, what were the developers going to do? Sit back and watch the value of their downtown property drop to fifty cents on the dollar? They weren't going to do that. Commenting on the developers' eleventh-hour bankruptcy ploy, Councilwoman Verner drew the apparent conclusion: Saving the value of their downtown property (as distinct from saving downtown) was what drove this deal from Day One. Even businesses that claim to operate for the good of the city really are just acting in their own best interests.

Of all that we now know, that is the fact of life that many of us really didn't want to face. As a result, we've had to learn it the hard -- and expensive -- way. So now we know, and that's pretty much that.

Publication date: 12/23/04

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About The Author

Robert Herold

Robert Herold is a retired professor of public administration and political science at both Eastern Washington University and Gonzaga University. Robert Herold's collection of Inlander columns dating back to 1995, Robert's Rules, is available at Auntie's.