Legality concerns, agent's exit delay

Whitman County commissioners delayed a decision Tuesday on increasing the county’s contribution to help build a shopping center at the stateline.

In the week since Hawkins Companies asked for an additional $5.9 million to build public infrastructure at its long-proposed 714,000-square-foot shopping center, commissioners learned their bonding company would not underwrite bonds on the project and Prosecutor Denis Tracy advised them he had concerns about the legality of the proposal.

“I guess we’ll see what we can put together over the next week,” Commissioner Greg Partch said before canceling a public session on the topic Tuesday afternoon.

County commissioners in 2008 agreed to use $9.1 million of county funds to build streets, a water and sewer system and other public infrastructure at the site. Hawkins last week said if that number was raised to $15 million, they could begin construction in the spring.

Partch, commissioners Pat O’Neill and Michael Largent and several other county officials met for about an hour and a half in executive session Tuesday to discuss legal questions on the project and possible acquisition of land at the stateline site.

Jeff DeVoe, project leader for Hawkins, then met with Tracy, Treasurer Robert Lothspeich and Administrative Director Gary Petrovich for about 90 minutes.

That session was closed to the press, but observers through the windows from the commissioners’ waiting room could see a few expansive gestures and hear occasional loud exchanges.

DeVoe was the first participant out of the session and made a quick departure without comment.

No one in the meeting would comment on what was said.

Earlier Tuesday, Tracy issued a 57-page memo to the commissioners.

Commissioner O’Neill said the memo outlined Tracy’s legal concerns over the amendment to the 2008 agreement.

“Guess I have some reading material,” said O’Neill. “Or (toilet paper). I don’t know which.”

Partch said he had some disagreements with Tracy’s memo, but would not specify what they were.

Citing attorney-client privilege, Tracy would not comment on the content of his memo.

“I can say I have very grave concerns about the riskiness of this venture,” said Tracy. “It seems to be a big gamble of taxpayer dollars.”

Partch, noting the development could generate as much as $18 million in tax revenue over the next 22 years, said it is a risk worth taking to spur development between Pullman and Moscow.

“This isn’t a Hawkins thing,” he said. “This is a corridor thing.”

He echoed assertions made by DeVoe last week that some of the prospective tenants of Hawkins’ shopping center may soon begin switching to sites in Moscow if construction does not begin soon.

“They’re saying is it’s either going to happen in Whitman County or it’s going to happen in Moscow,” said Partch. “So we are up against a very aggressive time frame to make this decision.”

Commissioners are also under a self-imposed deadline, with O’Neill and Partch last week setting Jan. 9 decision deadline.

Commissioner Largent, who objected to setting the deadline, Tuesday said he wanted to more thoroughly weigh the risks of obliging $15 million of county funds versus losing the shopping center.

“I would be disappointed if they set up in Moscow. But protecting its location in Whitman County is not worth doing it at any cost,” said Largent.

Largent, who voted in favor of the $9.1 million 2008 agreement, said he worries now that the potential revenue from the shopping center, project source of funds to pay off the bond issue, would never become a reality. He was concerned retailers could close stores at the site, or it could be annexed into Pullman.

Partch said Pullman cannot annex the land without approval of landowners, be they Hawkins or whoever may buy the developed ground in the future.

“Why would you ask to pay more taxes if you didn’t have to?” he asked, asserting property owners inside Pullman face a relatively higher tax load than those in unincorporated areas of Whitman County.

When asked, Tracy said Partch was “wrong” about the annexation process.

Last week, Jack McLaughlin, financial advisor with investment firm D.A. Davidson, advised the county via e-mail that his firm would not underwrite bonds for the Hawkins project unless Hawkins provides a letter of credit from a major bank.

Hawkins in the development agreement has pledged to pay any gaps between revenues and bond payments during years three through seven of the bond’s term.

“I happen to think we should pay close heed to our investment banker’s advice,” said Largent. “Of course I’m supportive of Hawkins and this project. But my primary job is to protect Whitman County.”

O’Neill dismissed McLaughlin’s email.

“We never asked him to sell the bonds,” said O’Neill.