[Vision2020] Hawkins shopping center: Dead or alive?

Tom Hansen thansen at moscow.com
Sat Jun 22 17:34:24 PDT 2013


"Oh, what a tangled web we weave when first we practice to deceive."

- Sir Walter Scott

Courtesy of today's (June 22, 2013) Moscow-Pullman Daily News.

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Hawkins shopping center: Dead or alive?
It's been more than five years since a swath of land just west of the Idaho border along the Pullman-Moscow Corridor was purchased and word of the near-future presence of a 714,000-square-foot shopping center spread through the area.
Five years later, the ground is still undisturbed except for a few test wells.
In the intervening time, there have been numerous negotiations, a contract signed and amended, allegations of violations of state laws and a lawsuit filed, but not a significant amount of earth moved.
The sign facing the corridor is still there, reading "COMING SOON MAJOR SHOPPING CENTER," but many wonder if it's just an empty promise.
"There's two issues," Whitman County Commissioner Michael Largent said in reference to the holdup. "There's the OVIC (Organization to Void Illegal Conduct) lawsuit and the contract between the county and Hawkins. Two different topics, but interrelated, of course."
A situation, he admitted, similar to being between a rock and a hard place.
The contract
The Hawkins Company, a Boise-based firm, originally purchased the land in 2008 from Whitworth University with plans to build a Lowe's-anchored shopping center there. Shortly after the purchase, Hawkins approached Whitman County with a deal. They would build the infrastructure - the roads, water supply, electricity - the foundation of what would be needed for the future expansion of commercial real estate in the area.
The county would, in turn, reimburse the company for $9 million of that cost. The county's incentive was avoiding the initial outlay for the infrastructure and the eventual return on investment through sales tax generated at the site.
Whitman County Commissioners unanimously agreed to the contract at the time, thinking it was a good investment for the area.
Shelley Bennett, owner of Palouse Commercial Real Estate owner, agreed the investment may have been worth it.
"The addition of a commercial site there would be a big boon. Palouse Mall is basically full. We've got a lot to offer in the area, we just need to grow a little, which includes additional retail."
At the time, Largent, the only commissioner remaining in office who took part in the negotiations, agreed as well.
Without tenants, however, Hawkins couldn't begin construction. Whether due to the downturn of the recession, or lack of substantial incentive, Lowe's spokeswoman Karen Cobb confirmed Friday the home improvement chain no longer has any interest in the project.
Other suitable tenants do not seem to be presenting themselves.
The amendment
Three years after the original contract was signed, Hawkins approached the county with an amendment asking for an additional $6 million to cover the costs of building the infrastructure.
"The reason why they came in with the request for more money was because they were having trouble in the current economy at the time attracting tenants at their regularly proposed lease rates," said Gary Petrovich, Whitman County financial advisor.
Despite warnings from advisors cautioning against the move, two of the three commissioners signed the agreement, putting the county on the hook for $15 million in investment for the site.
Largent, who voted against the amendment, said he felt there were a number of problems with it.
"There was the size of it, the lack of legal review, the lack of certain contingency provisions, such as contingency of financing. What happens if the county can't come up with the funding to reimburse Hawkins?" Largent said.
Largent's greatest concern, however, came down to the risk to the county - despite a personal guarantee from the construction company's owner, Gary Hawkins, to cover, after the second year, any of the county's infrastructure payments not covered by tax revenue generated from the site.
Largent said he had doubts not just about whether "the tax increments generated by the project would be sufficient to service the county's debt from the project," but that it would "provide returns over and above that debt service."
"Some of the former commissioners thought that the entire $15 million could be borrowed from the Washington Public Works Trust Fund," commissioner Dean Kinzer said. "That is definitely not the case."
"In the best case scenario, we'd still have to issue bonds for about $10 million," Petrovich said. A prospect that, he admits, makes him uncomfortable.
"Whether or not the county can come up with the funds to satisfy the requirements of even the original contract depends upon how the bond market responds to the interest that Hawkins gets by tenants for their project," Largent said.
County officials were not alone in their concerns.
The lawsuit
Shortly after the agreement was signed, the nonprofit organization OVIC was created by constituents within Whitman County to contest the new agreement.
A lawsuit was filed alleging the county violated the state's Open Public Meetings Act by not providing the public with the opportunity to provide input on negotiations during the first amendment process.
The lawsuit is currently still pending, but OVIC's attorney, Timothy Esser, said since no construction has begun, he feels it's currently unnecessary to pursue it at this time.
If construction were to begin, however, Esser said he believes he can force a halt.
"A Public Meeting violation, if established, absolutely absolves the contract, and would render it dead and void," Esser said.
He maintains his clients have nothing against commercial development in the area - they would, in fact, welcome it. What they have a problem with, he said, is that, "It's not the function of taxpayers to be subsidizing business development."
The issue of the Public Meetings Act violation hasn't been pushed, he said, because there has been no construction.
"As long as they're not breaking ground, we're comfortable with just letting things lie," Esser said.
In February of last year Whitman County hired Foster-Pepper PLLC to represent their interests in the lawsuit, at $225 an hour. A $10,000 cap and one-year limit was set on those services. Their services, along with another $10,000 cap, were sought in negotiations over a second amendment to the contract with Hawkins.
As yet, no agreement has been reached on such an amendment.
Whether Hawkins has determined not to go ahead with construction due to concerns about the complications created by the lawsuit, or because they still haven't found two "big-box" tenants, as required by their contract with the county, remains unclear. Hawkins representatives were unresponsive to several attempts at contact.
The deadline
This coming January, a two-year deadline will render the amendment void.
If Hawkins hasn't "commenced construction" on the site by Jan. 30, the contract reverts to the original deal signed in 2008.
Whether Hawkins would remain interested in developing under the terms of the original contract is unknown.
Esser said OVIC would have to re-evaluate their position when and if that day comes.
In the meantime, county commissioners said they will proceed in good faith with the contract they have with Hawkins, despite the fact that all three currently in office publicly opposed the amendment when it was signed by former commissioners Greg Partch and Pat O'Neill. Both were defeated in the 2012 election cycle.
"On the Hawkins end, they're looking for interested tenants. From our end, once that's accomplished and they have some firm commitments, it'll be up to us to find financing," Largent said.
There is some doubt whether those tenants will be found, though.
Shelley Bennett told a group gathered for the 2013 Regional Commercial Market Overview last week that she doesn't think it's likely there will be any construction at the Hawkins site any time soon.
"At this point, from everything I've heard from brokers and developers, that is dead, at least for the time being," Bennett said.
However, there is some hope, she said, for development along the corridor in the near future.
While she declined to give any names until negotiations are complete, Bennett said she is in the process of finalizing work on a contract with a local service provider to purchase the lot next to the Toyota dealership, just west of the Idaho-Washington border.
"We need to develop the corridor, because that's the way we're going to grow. We want to grow our communities together," she said. "I'm very optimistic about it."
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Remember back on January 29, 2008 . . . 
(I've got a complete copy of the agreement in case anybody's interested)


And on October 6, 2008

http://www.tomandrodna.com/WaterRights/Steed_CC_100608.mp4

or (in Windows Media Video, .wmv, format) . . .

http://www.tomandrodna.com/WaterRights/Steed_Stuff_100608.mp4

And Wally Steed on June 4, 2012 . . .

http://www.tomandrodna.com/WaterRights/Walter_Steed_060412.mp3

Seeya 'round town, Moscow, because . . .

"Moscow Cares" (the most fun you can have with your pants on)
http://www.MoscowCares.com
  
Tom Hansen
Moscow, Idaho

"There's room at the top they are telling you still 
But first you must learn how to smile as you kill 
If you want to be like the folks on the hill."

- John Lennon
 



Seeya 'round town, Moscow, because . . .

"Moscow Cares" (the most fun you can have with your pants on)
http://www.MoscowCares.com
  
Tom Hansen
Moscow, Idaho

"There's room at the top they are telling you still 
But first you must learn how to smile as you kill 
If you want to be like the folks on the hill."

- John Lennon
 
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