- Young Kwak
Developer Ron Wells is ready, set and eagerly waiting the shot of the starting pistol. Over the past week, every 36 hours or so, he's been making phone calls to an investor, asking if there's anything he can do to speed up the process. He was hoping that the investor's letter of intent would have arrived last Thursday.
Once it does, Wells can finally start running full speed, purchasing the rest of the vacant Ridpath Hotel buildings and rehabbing them into a 13-story apartment complex.
It's something Wells, not to mention the city of Spokane, has been anticipating for a very long time.
It's been six years since a Las Vegas hotelier shut down the Ridpath, a once iconic symbol of the Spokane skyline. It's been more than two and half years since Mickey Brown, who'd been snookered by con artist Greg Jeffreys into buying an inflated chunk of the Ridpath, approached Wells about getting involved. It's been more than a year since Jeffreys pleaded guilty to fraud.
By contrast, slightly more than two years have passed since Davenport hotel developer Walt Worthy trumpeted his plans to turn a parking lot into Spokane's biggest hotel, and it's already risen high into the air, with a scheduled June opening. (See "Checking In," page 13.)
Wells has spent that time hacking away at the nightmarish thicket of lawsuits, competing ownerships, regulations and financing challenges in his effort to rehab the Ridpath into a downtown apartment complex.
"When I got into this business as a developer, 35 years ago, I was an extremely impatient person," Wells says. "I had to just develop all the patience necessary. This is a test of how much patience one might ought to have."
The misfortune of the Ridpath's 13 unlucky stories extends into the building itself. In December of 2013, a pipe burst, taking all the water and antifreeze in the sprinkler systems from the 13th through the fifth floors and dumping it into the basement. It flooded the electrical transformers, costing his insurance company millions.
"Ironically, it was a not a setback time-wise," he says, but that's only because it's taken so long to line up the financing.
From the very beginning of the Ridpath process, Wells says, he had the best condo attorney in Spokane trying to untangle the legal morass left by Jeffreys, who helped split the property into more than two dozen pieces. The legal fees, he says, are well into the seven figures. That includes the cost of successfully defending against a lawsuit by former Red Lion CEO Art Coffey.
Wells says all the legal issues will be resolved once he purchases the rest of the hotel. "And my life's just wonderful again," he says.
Many, like one-time self-appointed Ridpath savior Stephen Antonetti, hoped the building could be resurrected as a hotel. But Wells considered that unrealistic. When Worthy resurrected the shuttered Davenport Hotel, Wells says, he took a Bobcat to the top floors, knocking down the old walls to build new ones in a more modern layout.
But all the cross-bracing between the walls made that practically impossible in the Ridpath, Wells says. Instead, he wants to turn it into an apartment complex. The composition of the building has changed over the years: Currently the plan is for 41 studio apartments, 55 one-bedroom apartments and — uniquely— 110 micro apartments. At 255 square feet, they're tiny, but Wells says his market study shows they'll fetch $435 a month. It's a model that's thrived in dense communities like San Francisco and Seattle, where demand for housing is intense. The big question is whether the same will work in a vastly different Spokane market.
"There's no challenge. We already had 248 people on the waiting list from the Craigslist ad. We've got more people than we've got apartments," Wells says. "The appraisers, the market study analysts, the lender, the [Federal Housing Administration], everyone agrees the demand is solid."
That doesn't mean that convincing investors has been easy. A number of potential investors, Wells says, were immediately dismissive about the project, starting with the city in which it was located. To reduce the risk, making the project more palatable for investment, he cut the number of micro apartments in half.
"It took a very large time to find any tax credit investors willing to decide they even liked Spokane and the project," Wells says. "Fourteen of them said no before one said yes."
Once the other investor details are clear, the city of Spokane may help provide additional financing, using a few different instruments. The slow process of turning the Ridpath's ruin into something worth selling again has already begun, starting with the top two floors, where Ankeny's Restaurant served escargot and racks of lamb a decade ago. Wells plans to turn those top two floors into condos.
He's made an offer to buy the Ridpath once before, in 2006, when it was still a functioning hotel. Back then, he planned on focusing on the condo project. In retrospect, getting outbid was the one of the best things that could have happened to him. The condo market dropped out almost immediately, and the subsequent economic crash bankrupted plenty of well-known developers with grand dreams and terrible timing.
That's not to say that Wells' Ridpath sojourn hasn't been rough. Asked whether it's all been worth it, Wells lets out a long, wry laugh. "It probably wasn't," he says. "No sane lender would have wanted to take this on if they'd known it would take this long."
But he can't quit now, he says. He's too stubborn. Too many people are counting on this. Wells walks over to his office and brings out a framed quote from The Best Exotic Marigold Hotel: "Everything will be all right in the end. If it's not all right then it's not yet the end."♦