Spokane Convention Center hotel waits on appraisals
Worthy says intent letter extended until June 1 as PFD studies valuationsFebruary 14th, 2013
Spokane hotelier and developer Walt Worthy says a formal development agreement that would clear the way for work to start on a $50 million convention center headquarters hotel downtown is progressing slower than he had envisioned, as the Spokane Public Facilities District is conducting appraisals on the proposed site.
Worthy and his wife, Karen, signed a letter of intent in September announcing their vision to develop a 15-story, 700-room hotel and six-story parking garage on property across Spokane Falls Boulevard from the Spokane Convention Center, which the PFD owns. At the time, they said they had hoped to begin construction early this year.
Kevin Twohig, executive director of the PFD, says he can't predict when the appraisal work will be complete.
"In the euphoria of having the letter announced, everyone hoped it would be quick," Twohig says. "This is a large project, and I've never seen one happen quickly. My expectation is we're doing alright."
The PFD owns the proposed hotel property, known as the south block, where it updated a 330-space parking lot in 2010. The south block is bounded by Spokane Falls Boulevard, Main Avenue, and Washington and Bernard streets.
Appraisals are required by law prior to negotiating the sale or lease of publicly owned property, to ensure equitable transactions, Twohig says. The letter of intent is a nonbinding showing of a willingness to do business that enables the Worthys and the PFD to negotiate development terms before committing to a contract.
The original letter was to expire in December, but has been extended to June 1, Twohig says.
"Nothing else has changed," he says.
Worthy says now that work won't likely start soon.
"Things are running behind schedule, and that's probably not going to happen," he says.
The PFD has the option to sell the property or negotiate a long-term lease for it.
"We're still sorting through the ownership vehicle," Worthy says. "We're hopeful that we can still put something together."
Worthy, who's no stranger to developing hotel and office buildings, says financing isn't an issue for the project.
The Worthys are perhaps best known for reopening the restored 238-room Davenport Hotel downtown a decade ago. More recently, the couple opened the new 328-room Davenport Tower hotel adjacent to the historic Davenport, in 2007.
In 2009, they bought and restored the 48-room Hotel Lusso.
Also in 2009, the Worthys opened the 250,000-square-foot River View Corporate Center office building, in Spokane Valley.
The Worthys' development company, Worthy Enterprises LLC, will act as the general contractor on the convention center hotel project, Worthy says. The Spokane office of DCI Engineers is the engineering consultant on the project.
Various subcontractors are working on bids to construct components of the project, he says.
The preliminary plan for the project has gone through the predevelopment stage of the city of Spokane's permitting process.
The city's predevelopment notes say the project is subject to environmental review as required by Washington state law, and multiple parcels of land must be consolidated into a single parcel within the boundaries of the project before building permits can be issued. The project also will be subject to the city's design review process before it can be permitted.
Meantime, the PFD is planning a $60 million-plus project to construct a 90,000-square-foot exhibit hall expansion and to do Spokane River shoreline rehabilitation work near the convention center complex.
The PFD last month selected three design-build teams involving Spokane-area companies to compete for the contract, which will be funded through a 10-year extension of lodging and sales tax allocations. The competing teams are Garco/ALSC/LMN, Lydig/Integrus, and YLK JV/Bernardo Wills/tvsdesign. The PFD expects to select the design-build team in April. Work is expected to start by early summer and to be completed by early 2015.
The PFD also owns and operates the INB Performing Arts Center in the west section of the convention center complex, and the Spokane Veterans Memorial Arena north of downtown.