Spokane architect and developer Glen Cloninger says he and the city of Spokane will attempt mediation as they seek to settle the highly contested value of his property on a downtown city block the Spokane Public Facilities District covets for eventual expansion.
Further, he has given the city one idea of how things might be worked out on the block bordered by Spokane Falls Boulevard, Main Avenue, and Washington and Bernard streets, Cloninger says.
Under his proposal, which would involve land trades, the city would assemble on the east end of the block the western 40 feet of Bernard Street with an area equivalent to holdings it already has on the block, Cloninger says, and he would end up with a development site on the at other end of the block along the east side of Washington.
I would have a wonderful site; they would have their parking (area), and they would have to agree not to condemn my property for a number of years while he sought to develop a major hotel, Cloninger says.
Also, Cloninger says that David Peterson, co-owner and vice president of Goodale & Barbieri Co., of Spokane, believes the possibility exists for a sizable development on the west side of Washington.
Peterson, who represents a group that owns part of the block there bounded by Washington, Spokane Falls, Main, and Stevens Street, says, I believe theres a great development opportunity on the west side of Washington. He says the block has great views of the Spokane River, but its too early for him to say what could be developed on the block. Peterson adds that he doesnt represent the owners of the Liberty Building or a third ownership group that has holdings on the block.
Kevin Twohig, the districts executive director, says, The attorneys that represent the district and the city of Spokane say they have an offer on the table to mediate. He says the offer could lead to a resolution, and he hopes it will.
Hes familiar with the proposal Cloninger laid out for assembling property at either end of the block, but he doesnt think that would work for the district, Twohig says.
I think the district feels the need to have the entire south block for the community, he says. As a facility operator, I can tell you that youre never done with (developing) your convention facilities because the need to expand grows over time.
Expansion usually occurs about once a decade, and while the districts Group Health Exhibit Hall has only been open a little over a year, it took five years to develop, and its likely the district would need to expand again in another five years, Twohig says. While the district hasnt formulated expansion plans, it has had architects look at its potential future expansion needs, and based on what they found, The building already would be bigger than that whole block, Twohig says.
While he hasnt talked with David Peterson in some time, the development potential of the block on the west side of Washington is obvious because of its incredible, incredible views, Twohig says. He says the Downtown Spokane Partnership has identified that block as one of the real opportunity blocks in a new downtown plan.
The land-trade scheme Cloninger advocates would require agreement by Diamond Parking, which owns 17,000 square feet of property on the south block. Cloninger says he has met with Diamond Parking to discuss his proposal, though Diamond has been noncommittal, Cloninger says. Diamond couldnt be reached for comment.
The Public Facilities District, which doesnt have eminent domain power, asked the City Council last year to condemn Cloningers land in the south block, and the council instructed the citys legal staff to begin eminent domain proceedings. Before the city could file an action, however, Cloninger and his companies filed a $10.2 million inverse condemnation suit in Spokane County Superior Court against the city.
On July 22, Cloninger and Twohig signed a memorandum of understanding to enter into an arbitration agreement to determine the value of Cloningers property. After that effort ended fruitlessly, Twohig told the Journal of Business on Aug. 11 that Cloninger had sent the district a letter saying he wouldnt sign an arbitration agreement.
Cloninger asserts he not only was willing to submit to binding arbitration on his lawsuit, but proposed the idea of arbitration to the district in the first place. He says he did that after meeting with Spokane Mayor Mary Verner to discuss the stalemate on the property.
Im the one that went to the mayor. Im the one that offered binding arbitration, he says.
Cloninger says that after he and Twohig signed the memorandum, he sent a proposed binding arbitration agreement to the district.
The district, he says, altered the agreement and sent it back. He says he then changed the verbiage of the agreement to say the parties would be arbitrating the inverse condemnation proceedingand signed the agreement.
Unlike a condemnation proceeding, an inverse condemnation action can establish whether a taking of a property by a public agency occurred, whether a propertys value was affected by a taking, whether the propertys value might have increased if the owner had been able to develop it, and whether interest should be paid on any losses a property owner suffered, Cloninger says. He says a taking could occur years before a condemnation action is filed.
Cloninger contends that the land should command high value, much as rents around Central Park in New York City are the highest in the world, because his property is near the Spokane River, Riverfront Park, the INB Performing Arts Center, and the Convention Center.
He says that Spokane businessman Wendell Reugh, who is one of Cloningers partners in part of the property on the south block, has property for sale in the middle of downtown Spokane for $150 a square foot and has had some offers very close to that, although the property hasnt sold.
He says attorneys both for him and the city have estimated that if eminent domain proceedings are followed through to their legal conclusion, the attorneys fees for both sides will total $15 a square foot. He adds that if the citys estimate of the value of the property is more than 10 percent higher or lower than what the court finds, the city will be liable for both sides attorneys fees.
If I go to court, were going to try to get everything we can, Cloninger says. The inverse condemnation suit is to begin March 19.
Contact Richard Ripley at (509) 344-1261 or via e-mail at email@example.com.
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