Honesty Is The Best Policy

by Robert Herold


As the summer drifts on, ever closer to the September election to determine our political future, we read less and less in the papers about the River Park Square garage issue. The joke going around town is that the dispute will be settled when the warring attorneys have put enough money away to send all their kids through college. Not so far-fetched a possibility, actually. Eleven attorneys attended Betsy Cowles' deposition. It was a three-day deposition, at, say, $200 an hour: You do the math.


What's clear now is that however this matter turns out, as a political initiative it was, and continues to be, a disaster.


Because the lawyers are now flying the airplane, so to speak, it doesn't appear that our elected leadership, along with the developer, will enter into the honest political debate they should have had a decade ago. Back then, neither the city council nor the developer showed a willingness to address the matter for what it was: a political choice. Rather, they sold it as a good business decision, which it wasn't. Many cities have made the argument that some kind of subsidization of private efforts to "save" downtowns are necessary. But ours didn't. Instead, our part-time, boosterish council members told us that the city was off the hook. And Betsy Cowles? Can we forget the night she came before the council and declared that that parking meter revenue would never be needed?


Looking back at this political train wreck, we now know that this project, from the outset, depended on a political decision to provide public subsidization for a private development in order to "save the downtown." In a way, both the elected defenders of the project and the Cowles family are getting what they deserve, given the way they both dodged the truth. Still, it is in our community's best interest to set the delicious irony aside and seize on whatever opportunity remains to face the question of subsidization squarely.





The truth is that compared to the many similar projects being supported by other cities, the River Park Square project is small potatoes. When it comes to "corporate welfare," if that's what you want to call it, Spokane is miserly: Norfolk, Va., coughed up more than $100 million of a $300 million retail center to be anchored by -- you guessed it -- Nordstrom. St. Louis provided about what Spokane has on the plate, some $30 million, against another $300 million project, again to be anchored by Nordstrom. In Kansas City, the public will come up with $176 million toward a private project worth $453 million. And the list goes on.


The difference between these projects and River Park Square is simple: The issue of subsidization was faced early and an up-front debate ensued. The elected leadership decided that the pot of gold at the end of the rainbow was worth the public investment. It's the same kind of calculus that guided the state legislature's recent package designed to lure Boeing into staying in Washington, and even in the Seattle Mariners stadium financing.


Many argue that malls can't save downtowns, with or without a Nordstrom. That's a legitimate point of view, which certainly would have been taken along with other points of view as these various governments deliberated. In Spokane's old form of government -- the exact form some want to bring back -- rather than an open debate, our elected officials dodged, obfuscated and bumbled, as the developer threatened and cajoled.


For a model, consider Providence, R.I. Operating under a strong mayor system, the developers, the mayor, the city council and even the governor agreed to partially fund, through public dollars, a private development priced at some $460 million -- more than four times the cost of River Park Square. To be called "Providence Place," it would include the construction of a large retail center (anchored, not surprisingly, by Nordstrom), an outdoor amphitheater and a new park bordered by a system of river walks. Subsidization of what was essentially a private mall project was never at issue. What was at stake was the form that subsidization would take.


The political and governmental leadership there signed on to a subsidization arrangement that placed more of the risk on the developers by linking payment to the success of the project. Instead of just ponying up money -- as the City of Spokane was asked to pledge to do -- the Providence developers were given tax breaks, both by the city itself and also by the state. These were serious tax breaks of the sort that might make even Boeing envious: The city agreed to relinquish $136 million in real estate and personal property taxes over 30 years. The state agreed to give to the developer two-thirds of sales tax revenues (estimated at another $71.8 million) over 20 years.


William Azar, Providence's chief planner, recalls that the mayor and governor took the issue of subsidization head on. In the rest of the country, this is known as political leadership, and it's essential to make a project like this succeed. Azar calls it a "qualified success" so far (it was completed about the same time as the project in Spokane). By one measure, however, it may be an unqualified success: It moved ahead without recriminations, lawsuits and the level of public acrimony that has plagued our city for six years now.


Is it too late for all warring parties, through the ongoing, court-ordered mediation process, to reframe the questions at hand, facing the issue of subsidization squarely, and to renegotiate based on some standards for a fair level of subsidization?





Publication date: 07/10/03