City is better off with River Park Square

by Betsy Cowles

On the eve of the trial (or settlement), there is a great deal of public discussion and media coverage about the parking garage issue, including the Spokesman-Review’s recent series. A key aspect of the story has been lost, however. We have heard about all the costs related to the garage, but what about the benefits?  One can’t truly evaluate the situation without looking at the benefit side of the ledger.  Another way to pose the question is to ask if Spokane is better off now than it would have been had the project never been built? 

Do you remember downtown Spokane 10 years ago?  The heart of the community and the Inland Northwest region was on the brink of irreversible decline. By 1994, downtown was pocketed by failing retailers and vacant storefronts.  The streets were growing unsafe as crime increased.  Many experts believed the necessary soul of a community was in danger of being lost--perhaps forever.

Nordstrom’s lease was due to expire, and would not renew its lease unless dramatic efforts were made to revive downtown.  Retail industry experts predicted if Nordstrom left, The Bon would follow, gutting the downtown retail district.  This would trigger a spiral of negative events: lost jobs, higher crime, fewer visitors, declining property values, and millions of dollars of diminished sales tax revenues for the City.

By this time, the City of Spokane had adopted a comprehensive vision with “creating a vital downtown core” as one of its priorities.  With no one else stepping up to the plate with a solution, both the City and River Park Square developers committed to take action to reverse the trend.

Acting in good faith, the developer collaborated with the City of Spokane to create a solution -- the redevelopment of a shopping, dining and entertainment center with an expanded parking garage. Project goals were stated in the City's ordinance as “[T]he City finds . . . the Project will (i) provide new jobs . . ., (ii) stimulate the economy, (iii) provide cultural opportunities and (iv) improve the quality of life through a reinvestment in the CBD which will generate additional tax revenue and that the failure of the Project to proceed will cause the City to suffer economic decline.” The City committed, if needed, $2 million a year in parking meter money in return for a parking garage free and clear in 2019, an estimated annual $3 million in taxes and fees, and a revitalized downtown.

To date, the center has created and retained 1,100 badly needed jobs with all the resulting economic benefits for Spokane.  In addition, the City has pocketed more than $10.7 million in tax and fee revenues from River Park Square.  In contrast, the developer has yet to see a financial return on its investment.  We knew, in making our contribution to downtown revitalization, that the financial return for our company would be well below market.  We accepted this because we knew the project is pivotal to the City's economic future and because we care deeply about our home, as evidenced by our 115 years of community involvement.

As hoped, River Park Square has been a catalyst for major investment that sparked the revitalization of downtown.  More than $1.1 billion of investment in downtown has been planned, completed or announced since 1999.  Our vibrant downtown is attracting national events, regional visitors and economic development initiatives like the University District.  River Park Square is a centerpiece of this new downtown.

The project was built in good faith that it would turn out as planned.  While it has succeeded in reaching the goal to revitalize downtown, the garage has not performed as expected.  This project has been the subject of controversy and litigation for four years.   In the upcoming federal litigation, all of the City’s claims against the developer have been thrown out. Last fall, the state court determined, again, that the parking pledge is enforceable against the City. 

So, is the City of Spokane better off today because River Park Square was built?  The years of litigation have been personally painful and obscenely expensive for all those involved.  Nevertheless, measured against the Council’s own stated objectives of economic development and measured by the catalogue of direct and indirect benefits to the community, River Park Square is a success and is generating a return to the City of Spokane.  Our downtown, our city, and our region is healthier because of it.  This must be remembered in any debate about or resolution to the controversy. 

Betsy Cowles is president of River Park Square LLC.  She is also Chairman of Cowles Publishing Company, which owns the Spokesman-Review.