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HomeMy WebLinkAbout2026, 04-28 Formal A MeetingMINUTES City of Spokane Valley City Council Regular Meeting Formal Format A Tuesday, April 28, 2026 Mayor Padden called the meeting to order at 6 p.m. The meeting was held in person by Council and staff in Council Chambers, and also remotely via Zoom meeting. Attendance: Councilmembers Staff Laura Padden, Mayor John Hohman, City Manager Tim Hattenburg, Deputy Mayor Erik Lamb, Deputy City Manager Pam Haley, Councilmember Gloria Mantz, City Services Administrator Jessica Yaeger, Councilmember Chelsie Walls, Finance Director Michael Kelly, Councilmember Kelly Konkright, City Attorney Ben Wick, Councilmember Tony Beattie, Senior Deputy City Attorney A] Merkel, Councilmember Mike Basinger, Community & Econ. Dev. Director Dave Ellis, Police Chief Robert Blegen, Public Works Director Jill Smith, Communications Manager Teri Stripes, Economic Development Manager Justan Kinsel, IT Specialist Marci Patterson, City Clerk INVOCATION: Pastor Mike Drew with Valley Assembly of God Church gave the invocation. PLEDGE OF ALLEGIANCE Council, staff and the audience stood for the Pledge of Allegiance. ROLL CALL City Clerk Patterson called roll; all Councilmembers were present. APPROVAL OF AGENDA It was moved by Deputy Mayor Hattenburg, seconded and unanimously agreed to approve the agenda. INTRODUCTION OF SPECIAL GUESTS AND PRESENTATIONS n/a IQ tITfZNi/10 [:\I 9 0]►F-3 GENERAL PUBLIC COMMENT OPPORTUNITY: After Mayor Padden explained the process, she invited comments from the public. Linda Klesch, Spokane Valley (via Zoom); Sue Delucchi, Spokane Valley (via Zoom) provided general comments. CONSENT AGENDA: 1. Consent Agenda: Consists of items considered routine which are approved as a group. Any member of Council may ask that an item be removed from the Consent Agenda to be considered separately. Proposed Motion: I move to approve the Consent Agenda. a. Approval of Claim Vouchers, April 28, 2026, Request for Council Action Form: $2,641,981.34. b. Approval of Payroll for Pay Period ending March 31, 2026: $843,346.25. c. Approval of Payroll for Pay Period ending April 15, 2026: $758,296.32. d. Approval of Council Meeting Minutes of February 10, 2026 e. Approval of Council Meeting Minutes of February 24, 2026 f. Approval of Council Meeting Minutes of March 3, 2026 g. Approval of Council Meeting Minutes of March 10, 2026 h. Approval of Council Meeting Minutes of March 17, 2026 Council Meeting Minutes, Formal: 04-28-2026 Pagel of 4 Approved by Council: 06-23-2026 i. Approval of Council Meeting Minutes of March 17, 2026 j. Approval of Council Meeting Minutes of March 31, 2026 It was moved by Deputy Mayor Hattenburg, seconded and unanimously agreed to approve the Consent Agenda. ACTION ITEMS: 2. Motion Consideration — Ice Sports Facility Ground Lease - John Hohman, Kelly Konkright, Shelly O' uinn It was moved by Deputy Mayor Hattenburg to authorize the City Manager to execute the ground lease agreement; authorize the inclusion of the improvements to Sullivan Park ivith the City infrastructure project; or take other or take other appropriate action. Mr. Hohman presented a PowerPoint presentation that included information on the ground lease agreement for the ice sports facility. Mr. Hohman provided details on the ice sports timeline, the city infrastructure project, ground lease agreement, and the motion consideration for the project. Mr. Hohman also provided a project timeline regarding the proposal, the design and construction being 100% privately paid, and the necessary infrastructure improvements from the city. Mr. Hohman continued with information about the city's infrastructure portion of the project that includes the Dance Hall, the RC track, the signal improvements, property access, and the sewer lift station and hookup fees. Mr. Konkright continued the conversation with the ground lease terms that included the council consensus to negotiate a ground lease agreement, noting that city staff had been negotiating the terms of the lease with the donor and Innovia and that through negotiation process, some terms of the original proposal have been modified that included the facility footprint increased to approximately 80,000 sq. ft and that a hotel will not be located in the retail pads while the project receives lodging tax funding for operations. Currently the lease duration is 75 years with an option to extend the lease for an additional 24 years if approved by both parties, at end of lease term, the City will own all improvements on the land unless it exercises its right of first refusal or option to purchase the improvements prior to the lease expiration, a portion of the parcel must be used to develop, and operate and maintain an ice sports facility at Lessee's expense through the duration of the lease. He noted that the facility must be available to the general public and must at least 500 hours of annual use at free or discounted rates for economically disadvantaged persons and that all revenue generated must be spent on operations, maintenance, capital improvements, and programming. Mr. Konkright explained that the other two parcels must be developed for commercial uses allowed by the zoning code at no expense to the city, all net revenue received by lessee from development of the commercial parcels must be applied towards the expenses to operate, maintain, complete capital improvements and provide programming for the youth ice sports complex, the use of lodging tax funds is subject to the conditions recommended by the lodging tax committee and based on the public benefits, the City lease rate is $1/year through the lease duration. Mr. Konkright noted that the city will provide the transportation improvements to access the property and install a sewer lift station, if lessee receives a bona fide offer to purchase its rights, the city has right of first refusal (RFF) to purchase on the same terms, the city has purchase option to buy lessee's right for $9.4M when a certificate of occupancy has been issued and lessee's debt to develop land is $9.4M or less and noted that the option expires two years after it could have first been exercised. The city can condition the purchase by the city or third party on the lessee or third party to operate and maintain the facility at their own expense. The lessee may assign its interest to a third party that will be bound to the terms of the ground lease or the lessee may sublease to a third party that will be bound to the terms of the ground lease and must be at fair market value. Mr. Konkright stated that the lessee must report annually the dates/hours of free or reduced cost services, the net revenue or the ice sports facility and the net revenue from the commercial parcels. Ms. O'Quinn thanked council for all the good questions. She spoke about the lease, the theater and how it didn't move forward and how this project differs. She also spoke about the project carrying debt and that this is a fully funded project. The city responsibility is the upgrades and not building the actual ice rinks. She also noted that Innovia has been in the community for 52 years connecting people to these great opportunities. City Manager Hohman closed the conversation with a couple last slides and spoke about the next steps and included the council strategies and goals that are part of the project. Councilmembers were given the opportunity for three questions during the discussion and further discussed the length of the lease, how the number of hours of use were determined, the LLC having a special purpose under Innovia and will be a non-profit, if any groups or non -profits would benefit from Council Meeting Minutes, Formal: 04-28-2026 Page 2 of 4 Approved by Council: 06-23-2026 improvements that the city would make to the property, what would happen if the lessee defaulted, if there would be debt incurred during the construction process that it would not fall to the city, proforma information, and the responsibility for improvements to the infrastructure. Councilmember Merkel exceeded his three questions and Councilmember Yaeger poised a point of order stating that he had exceeded his question opportunity. City Manager Hohman asked Mayor Padden if he could respond to Councilmember Merkel and was given permission. Councilmember Merkel poised a point of order and said who is running this meeting. Mayor Padden stated that she was and that that would be his last question. City Manager Hohman continued and provided details on the final question that was asked. Mayor Padden invited public comments. Rod Higgins, Spokane Valley; Mo Herr, Spokane; Sarah Bascetta, Spokane Valley; Maeve O'Toole; Ben Lund, Spokane Valley; Tyler Pasanni, Spokane Valley; Kay Fewerseek; Mike Dolan, Spokane Valley; Rachelle Miller, Liberty Lake; Matt Almond, Spokane; Jodie Buehler, Spokane Valley; John Sisser, Spokane Valley; Matt Howell, Spokane Valley; Danny LaRue, Spokane; Ryan Miller, Liberty Lake; Kurt Lukens, Pasco; Kendall Leclaire, Spokane; Luke Damskov, Spokane; Sue Delucchi, Spokane Valley. Council provided closing comments. Vote by acclamation: in favor.- Mayor Padden, Deputy Mayor Hattenburg, Councihnembers Haley, Wick, Yaeger, and Kelly. Opposed: Councilrnember Merkel. Motion carried. It was moved by Councilrnember Haley, seconded and unanimously agreed to extend the meeting to 10:OOpm. Mayor Padden called for a fifteen -minute recess at 8: SOprn. 3. First Read: Ordinance 26-006 Opportunity Fund CTA - Kelly Konkright, Mike Basinger It was moved by Deputy Mayor Hattenburg to advance Ordinance 26-006 adopting amendments to chapter 3.21 SVMC to a second reading. Mr. Basinger and Mr. Konkright spoke about the updates to the code regarding the tourism promotion area opportunity fund. Council discussed the uses for the fund and the new chapter in the city code. Mayor Padden invited public comments, no comments were offered. Vote by acclamation: in favor: Unanimous. Opposed.- None. Motion carried. NON -ACTION ITEMS: 4. Admin Report: Opportunity Zone Application Discussion — Teri Stripes Ms. Stripes presented a PowerPoint presentation that included an overview of what the Opportunity Zone is, the impact of the opportunity zone, the difference between zones and funds, what does the investor receive such as offering IRS tax benefits to investors who temporarily defer tax on capital gains and defer tax on the invested gain amounts until there is an event that reduces or terminates the qualifying investment. She further explained the city's role in the process, and what types of development are expected, the requirements of the opportunity zone application criteria, a map of our five eligible zones throughout the city, and noted that tract 123 qualifying criteria. She reviewed a map of the developable land, a map of the WSDOT surplus parcels and pedestrian overpass, and a map of the incentive areas. She noted a graph of the at -risk population profile, a graph of the demographic profile, and noted that the goal was to interrupt the cycle of decline for the at -risk population in Census Tract 123 through our planned capital investments and encouraging private investment with the OZ incentive. She continued to explain why census tract 123 should be chosen. She closed with a recommendation that staff bring forward a resolution to authorize the application and to submit a letter of support. Council discussed various points of the presentation and provided consensus to move forward with the application, resolution and support letter. It was moved by Councilmember Yaeger, seconded and unanimously agreed to extend the meeting to 10: OOpin. INFORMATION ONLY (will not be reported or discussed) 5. Department Monthly Reports 6. Fire Dept Monthly Report GENERAL PUBLIC COMMENT OPPORTUNITY: After Mayor Padden explained the process, she invited comments from the public. No comments were provided. Council Meeting Minutes, Formal: 04-28-2026 Page 3 of 4 Approved by Council: 06-23-2026 ADVANCE AGENDA Councilmember Merkel spoke about complaints regarding the Good Sam location issues and wants full presentation. City Manager Hohman provided a brief explanation and stated that he would provide an email to council with further information. Councilmember Yaeger would like to amend a request from a previous meeting where she requested to review the police contract and add that she would like to have all the public safety contracts reviewed. There was consensus to add that to the advanced agenda. Mayor Padden spoke about the ambulance costs in the valley and noted that we do have a new committee and would like to engage in a conversation about how to bring ambulance costs down. There was consensus to add that item. Councilmember Yaeger noted that the committee would be meeting on Thursday and that it would be part of the discussion. Councilmember Wick spoke about the historic preservation options that we have and would like to see more information on that topic. Council provided consensus to add that to the advanced agenda. Councilmember Merkel spoke about wildfire concerns and would like to have a presentation on the wildfire issues in the area. There was council consensus to add that topic to the advanced agenda. Mayor Padden stated that she would like a report from Chief Ellis regarding the public safety measures for the World Cup activities in our community. There was council consensus to add that item to the advanced agenda. COUNCILMEMBER REPORTS Councilmember Yaeger met Joel from Spokane Home Builders, attended a COG meeting and has a meeting on Thursday for the firefighters group. Councilmember Haley attended an STA meeting. Deputy Mayor Hattenburg attended an STA MOD pilot program, noted that the STA hired 15 safety ambassadors and that it has been successful. Councilmember Kelly attended a SCRAPS meeting. Councilmember Wick attended a SCRAPS meeting, visited the 141st air guard unit, attended an AWC legislative advocacy meeting for the next session, and had a Boeing visit. Councilmember Merkel attended the park presentation at fire house on Bates. MAYOR'S REPORT Mayor Padden noted that she attended the Valley Chamber meeting where they announced who replaced Lance Beck, as CEO. Her name is Jessica Laughery. Mayor Padden provided details on her background. CITY MANAGER COMMENTS City Manager Hohman noted that they had been at the meeting this evening for over five hours and would not keep them any longer. EXECUTIVE SESSION It was moved by Deputy Mayor Hattenburg, seconded and unanimously agreed to adjourn at 10: Ilp.In. ATTEST: Laura Padden, Mayor arcs atterson, City Clerk Council Meeting Minutes, Formal: 04-28-2026 Page 4 of 4 Approved by Council: 06-23-2026 CITY OF SPOKANE VALLEY SPOKANE COUNTY, WASHINGTON ORDINANCE NO.26-006 AN ORDINANCE OF THE CITY OF SPOKANE VALLEY, SPOKANE COUNTY, WASHINGTON, ADOPTING CHAPTER 3.21 OF THE SPOKANE VALLEY MUNICIPAL CODE TO ESTABLISH A TOURISM OPPORTUNITY FUND, AND OTHER MATTERS WHEREAS, the City of Spokane Valley City Council adopted Ordinance No. 22-016 which (1) established the Spokane Valley Tourism Promotion Area ("TPA") comprised entirely of the corporate limits of the City pursuant to RCW 35.101.020, (2) established the Spokane Valley Tourism Promotion Area Commission ("TPA Commission") to make recommendations for use of TPA tax revenue received by the City, (3) established a tax under RCW 35.101.050 and a separate tax under RCW 35.101.057 on overnight lodging within the TPA, and (4) restricts the City's use of such tax revenue for the purpose of promoting tourism within the City; and WHEREAS, on August 21, 2025, the TPA Commission recommended using a portion of TPA tax revenues to fund a "Tourism Opportunity Fund" from which the TPA Commission may, subject to review and approval by City Council, award funds to venues or event organizers to help defray the costs of locating a tourism -generating event within the City and incentivize such tourism -generating events to locate within the City; and WHEREAS, on November 18, 2025, the City of Spokane Valley City Council (1) approved a duly made motion to create the Tourism Opportunity Fund and fund it in 2026 with $170,000 from TPA funds for year 2026 and (2) directed City staff to propose amendments to the Spokane Valley Municipal Code to identify criteria for disbursements to be made from the Tourism Opportunity Fund to venues or event organizers; and WHEREAS, on February 19, 2026, the TPA Commission, by unanimous vote, recommended that City Council approve the presented draft text amendments to Chapter 3.21 of the Spokane Valley Municipal Code in order for the TPA Commission to begin administering the Tourism Opportunity Fund; NOW, THEREFORE, the City Council of the City of Spokane Valley, Washington, ordains as follows: Section 1. Amendment to SVMC 3.21.050. Spokane Valley Municipal Code 3.21.050 shall be amended as follows: 3.21.050 Uses of lodging charge revenue. A. The uses described in SVMC 3.21.050 are limited to tourism promotion pursuant to RCW 35.101.010(4) and may include payment of administrative costs associated with operation of the tourism promotion area as determined by the city council. B. Revenue from lodging charges collected from the charges under Chapter 3.21 SVMC shall only be used for the following purposes: 1. The general promotion of tourism within Spokane Valley and the Spokane metropolitan area as specified in the annual tourism promotion area work plan/budget, to be adopted annually; City of Spokane Valley Ordinance No. 26-006 2. The marketing of convention, and -trade shows, and events that benefit local tourism and the lodging business in Spokane Valley; 3. The marketing of Spokane Valley and the Spokane metropolitan area to the travel industry to benefit local tourism and the lodging businesses in Spokane Valley; and 4. The marketing of Spokane Valley and the Spokane metropolitan area to recruit sporting events in order to benefit local tourism and the lodging businesses in Spokane Valleys: 5 To operate a fund established hereby and referred to herein as the "Tourism Opportunity Fund". The purpose of the Tourism Opportunitly Fund is to incentivize significant trade events special interest events entertainment events and/or sporting events to locate within or near the Cijy when said events are reasonably expected to generate a substantial amount of tourism within the City, including but not limited to overnight stays in lodging businesses. The funds may be used to mitigate an event organizer's expenses to locate an event within or near the City, or for a venue within or near the City to offer amenities for an event in order to incentivize an event organizer to locate a specific event at said venue. C. Pursuant to RCW 35.101.130, the city council shall have sole discretion as to how the revenue derived from the lodging charge imposed pursuant to Chapter 3.21 SVMC is to be used for tourism promotion. In exercising its discretion on use of these funds, city council shall consider the recommendation(s) of the Spokane Valley hotel/motel tourism promotion area commission established pursuant to SVMC 3.21.070. (Ord. 22-016 § 5, 2022). Section 2. Amendment to SVMC 3.21.070. Spokane Valley Municipal Code 3.21.070 shall be amended as follows: 3.21.070 Hotel/motel tourism promotion area commission. A. The hotel/motel tourism promotion area commission (also referred to in this Chapter as "the commission") is created as an advisory body to make recommendations to the city council for use the- revenueue derived from that portion of the taxes/charges imposed by this SVMC 3.21 et seg. that city council has not designated for the "Tourism Opportunity Fund" established in SVMC 3.21.050(B)(5). B. Tourism Opportunity Fund: 1. The commission is authorized and directed to receive and review complete written applications for finding from the Tourism Opportunity Fund. Except as otherwise provided herein, the commission shall review pending complete Tourism Opportuni Fund applications if any, at each re ug larly scheduled meeting of the commission. If delaying review of a complete application until the next regularly scheduled meeting renders the request moot then upon receiving a Tourism Opportunity Fund request the Cijy shall (1) schedule a special meeting of the commission to review the request, and (2) provide notice thereof to the public in accordance with applicable law. 2. Tourism Opportunity Fund Application: An event organizer or venue may apply for a funding award from the Tourism Opportunity Fund by submitting a written application to the hotel/motel tourism promotion area commission If an applicant is applying for multiple non -associated events then they must submit a separate application for each event To be eligible for consideration the application must include the following: City of Spokane Valley Ordinance No. 26-006 i The applicant's name phone number, email address and physical mailing address. If the applicant is an entity, then the applicant must also identify what type of entity it is (i.e. corporation limited liabilijy company, etc) and whether it is a for -profit or non-profit entity. ii Detailed description of the proposed event The description shall include (a) the dates) locations)and specific venue(s) of the event; (b) the purpose(s) of the event and a description of the activities that will occur at the event,• and (cc) whether the event is intended to be a one-time event an event that will repeat on a recurringbasis asis (includingtpected interval between events), or part of a series of associated events. iii Whether the applicant is a venue owner or operator and, if so, identify (a) whether and specifically how the applicant intends to use the funds to recruit one or more events to said venue b) the specific event(s) to be recruited (cLagy pertinent deadlines that applicant must meet in order to recruit said event(s) and (d) the date by which the applicant anticipates being notified whether the event will locate at the applicant's venue. iv. Whether the event will be held at the identified location if the application for funding from the Tourism Opportunity Fund is denied and if not the alternate location or locations at which the applicant may hold the event. v Identify the market demand for the event along with an explanation of how the event will generate tourism activity within the City, including but not limited to (1) the total projected number of "tourists," as defined in RCW 35.101.010(5) that are reasonably expected to attend the event and �(?) the projected number of overnight stays in lodging businesses within the City by tourists as a result of the event. vi Identify the demographic and geographic market(s) to which the event is or will be targeted. This information should be demonstrated by market data and research. If the applicant has data regarding one or more past similar events and the data demonstrates whether and the extent to which those past events generated tourism in the area where it was held then said data must be included with the application unless applicable law prevents the applicant from doing so. vie The marketing plan that the applicant will implement to attract tourists to attend the event which plan must include a marketing budget, strategy, and timeline. viii Identify (a) the amount of fiends the applicant is requesting from the Tourism Opportunity Fund and (b) the specific expenses of the event for which the funds will be used or the amenities that the venue will provide using the fiends, if the application is approved. xiv. Identify the methods the applicant will use in order to (1) measure the total number of lodging room nights of tourists that were generated by the event for hotels (a} -within the City and 02) outside of the City, but within Spokane Count and (2) Quantify the actual economic impact on hotels of the event in the tourism promotion area based on an average daily rate. 3 Review by the Commission: In reviewing applications for use of the Tourism Opportunity Fund, the commission shall determine whether each of the following criteria are met: i The applicant maye a person nonprofit entily, or for -profit entity, but must be either (a)a venue owner or operator; or (b) an event organizer/organization. ii The proposed use of the funds must be for an approved use identified in RCW 35.101 et seq. or SVMC 3.21 et M. City of Spokane Valley Ordinance No. 26-006 iii. The event must be either a destination convention, conference, trade show, association gathering, sports event entertainment event or similar event that is expected to generate tourism activity in the City. iv. The event cannot be a private wedding memorial family reunion, or similar private social event. v The date of proposed event must be identified in the application and be within five (5) years after the application was submitted. vi The applicant must demonstrate that the event will generate substantial tourism within the City, including but not limited to overnight stays of tourists within the City. vii. The event does not include any activity that is contrary to applicable law. 4. Decision of the Commission: L The commission must deny all Tourism Opportunity Fund applications that do not satisfy all of the criteria identified in subsections B.2. and B.3. herein. If an application meets all of the criteria then the commission may grant the request in frill or in part, only if and to the extent the expected return on investment to the economy within the tourism promotion area warrants an award from the Tourism Opportunity Fund. The commission does not have authority to award funds in amounts greater than that requested by the applicant in their written application. ii. The commission's decision on any given application shall be placed on the next regularly scheduled consent agenda of City Council. Alternatively, the commission's decision maybe_ presented as a non -consent agenda item at the next regularly scheduled Council meetingrather than on the next regularly scheduled consent agenda if the next regularly scheduled City Council meeting does not include a consent agenda. The commission's decision shall be final immediately following said City Council meeting unless the City Council vetoes the commission's decision by majority vote at said meeting. If f City Council vetoes the commission's decision then the application shall be deemed denied in its entirety. 5 Before receiving any funds awarded from the Tourism Opportunity Fund, a successful applicant must first execute an agreement containing terms identified by the Ci1y. Said agreement must include the following terms in addition to other terms the City deems appropriate: i. Identify the total amount of funds awarded from the Tourism Opportunity Fund. ii Identify a mandatory process for seeking fund disbursements including whether the finds will be disbursed on a reimbursement basis for qualified expenses incurred for the event or an alternative basis. If the disbursement is on a reimbursement basis, then the applicant must provide invoices or other evidence demonstratingthe he expenses submitted for reimbursement are qualified expenses for the event that the applicant actually paid. If the disbursement process is not on a reimbursement basis then within fogy -five (45) dgys after receiving a disbursement, the applicant must provide the City with invoices or other evidence sufficient to establish that the disbursed funds were used for uses authorized b the agreement. iii Require the applicant to apply the awarded funds only for the specific purpose(s) authorized by the commission and specifically identified in the agreement, iv. Require the applicant within six (t�60) days after the event has concluded to complete and submit a report to the City identifying the event's total economic lodging impact within the City of Spokane Valley Ordinance No. 26-006 tourism promotion area including but not limited to the total overnight staYgenerated bathe event and the total number of tourists that attended or participated in the event; v Require the applicant to indemnify the Ci1y for any claims arising out of any matter or situation related to the event other than claims alleging injury or damage resulting solely from negligence of the City; vi Require the applicant to procure insurance namingthe as an additional insured with coverage limits in amounts that the City deems sufficient to satisfy the applicant's indemnity obligations; and vii. Provide that a breach of the agreement b the applicant entitles the City to (a) a return of any funds disbursed to but not vet expended b the applicant, (b) be reimbursed b t�pplicant for finds spent in violation of the agreement (c) deny pending or future applications submitted by the applicant for funding from the Tourism Opportune Fund; (d) terminate the agreement; and (e) demand any other relief authorized bpplicable law. viii.Provide that funds from the Tourism Opportune Fund (a) cannot be used for any event other than the event identified in the application and for which the commission awarded said funds, and (b) must be returned to the Ci1y for deposit back into the Tourism Opportunity Fund if the event is cancelled or otherwise does not occur at the location identified in the application. C. Appointments to or removals from the hotel/motel tourism promotion area commission shall be made by the mayor, with confirmation by a majority of council pursuant to the then -currently adopted governance manual. 1BD. The hotel/motel tourism promotion area commission shall be composed of five voting representatives from the following hotel chain scales, as defined by Smith Travel Research (STR). If no representative from a hotel in the corresponding chain scale is willing or able to serve on the hotel/motel tourism promotion area commission, that position may be made available to a representative of any lodging business within the boundaries of the tourism promotion area: 1. One economy hotel; 2. One midscale hotel; 3. One upper midscale hotel; 4. One upscale hotel; 5. One full -service hotel over 200 rooms. A commission member may only represent one type of property identified in SVMC 3.21.070(B)(1) through (5) at any given time, and an ownership group may only represent one such property on the commission at any given time. GE. In addition to the above voting commission members, there shall be one nonvoting ex officio member as assigned by the city manager, who will function as a liaison between the city council and the hotel/motel tourism promotion area commission. ED. For appointment of the initial hotel/motel tourism promotion area commission, three members shall have a three-year term, and two members shall have a two-year term. Upon the expiration of the initial three-year term, the term for those three positions shall thereafter convert to a two-year term. City of Spokane Valley Ordinance No. 26-006 GE. Members of the hotel/motel tourism promotion area commission shall serve without compensation. HE. All meetings of the hotel/motel tourism promotion area commission are subject to Washington's Open Public Meetings Act, Chapter 42.30 RCW, and Washington's Public Record Act, Chapter 42.56 RCW. (Ord. 22-016 § 7, 2022). Section 3. Amendment to SVMC 3.21.080. Spokane Valley Municipal Code 3.21.080 shall be amended as follows: 3.21.080 Spokane Valley tourism promotion area annual work plan/budget. A. The hotel/motel tourism promotion area commission shall develop a recommended annual work plan/budget for use of Spokane Valley TPA revenues_; The work plan shall include'ng-GZ recommended activities and programs for funding from the taxes/charges authorized by Chapter 3.21 SVMC, a*d-(ainelitdinta complete list of projects for which application was made for funding for that year, and (3) the amount of funding if any, to designate for the Tourism Opportunity Fund in the City's budget for the upcomingfiscal year. The recommended work plan/budget shall be submitted to the city council in written form no later than November 15thSeptember 3 of each calendar year for inclusion in the City's annual budget adoption process. B. The city council may by motion approve the proposed work plan/budget, or instead return the proposed work plan/budget to the hotel/motel tourism promotion area commission for further recommendations. C. The city council may not add a project to the annual work plan/budget that was not previously considered by the hotel/motel tourism promotion area commission. If such action is proposed by city council, the proposed work plan/budget shall be returned to the hotel/motel tourism promotion area commission for further discussion and recommendation, providing at least 20 days for comment unless the comment period is waived by the hotel/motel tourism promotion area commission. After the comment period, the city council may exercise its sole discretion as to how the revenue derived from the charge is to be used to promote tourism, pursuant to RCW 35.101.130(1). D. After the annual work plan/budget is adopted by city council, it shall govern the use of revenue derived from the charges during the calendar year in which annual work plan/budget was approved. The city council may make amendments to the annual work plan/budget by motion, subject to compliance with the requirements of SVMC 3.21.080(C) regarding review and comment period by the hotel/motel tourism promotion area commission. E. The hotel/motel tourism promotion area commission shall provide a written report to the city council at least 4-5-fifteen (15) days prior to when the annual work plan/budget is due to the city council. The report shall include information on the previous year's operations of the tourism promotion area such as (but not limited to): 1. The number of hoteliers paying the tourism promotion area fee; 2. A summary of key factors influencing Spokane Valley's visitor industry in the past year; 3. An outline of major initiatives including visitor marketing and promotion, recruitment of group meetings or sporting events occurring in the past year; 4. The level of hotel occupancy and associated room demand contrasted to previous year; 5. The level of TPA per -room night proceeds contrasted to previous year; City of Spokane Valley Ordinance No. 26-006 6. The number of group meetings or sporting events that were booked, or in which significant support services were provided by the booking organization. This would include the number of participants and estimated economic impacts; 7. Other relevant efforts and impacts of the TPA activities. (Ord. 22-016 § 8, 2022). Section 4. Severability. If any section, subsection, sentence of clause of this Ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining provisions of this chapter. Section 5. Effective Date. This Ordinance shall be in full force and effect five days after publication of this Ordinance or a summary thereof occurs in the official newspaper of the City as provided by law. Passed this day of , 2026 Mayor Laura Padden City Clerk, Marci Patterson Approved As To Form: Office of the City Attorney Date of Publication: Effective Date: City of Spokane Valley Ordinance No. 26-006 Mard Patterson From: Erik Lamb Sent: Wednesday, April 29, 2026 3:04 PM To: Marci Patterson Subject: FW: Ice Rink Lease Questions As identified by Councilmember Merkel, please find below his responses regarding the question and answers to include in the minutes. Erik Erik Lamb // Deputy City Manager 10210 E. Sprague Ave // Spokane Valley, WA 99206 509-720-5100 // elamb(o)SookaneVallevWA.gov Sp6kn ,,;�valley This email and any attachments may be subject to disclosure pursuant to Washington State's Public Record Act, chapter 42.56 RCW. From: Albert Merkel <amerkel@spokanevalleywa.gov> Sent: Tuesday, April 28, 2026 12:25 AM To: John Hohman <jhohman@spokanevalleywa.gov> Cc: Kelly Konkright<kKonkright@spokanevalleywa.gov>; Erik Lamb <elamb@spokanevalleywa.gov>; Gloria Mantz <gmantz@spokanevalleywa.gov>; Michael Kelly <mkelly@spokanevalleywa.gov> Subject: RE: Ice Rink Lease Questions Thanks, I do not speak for CM Kelly who surely has his own questions and opinions. I copied him because the original email went to both of us. Most of these answers are non -responsive or disappointing. It is not within Staff's authority to decide what is relevant to answer for council members. Staff doesn't get to decide what is good for the people to know. Here is a quote from the Public Records Act, which by now you should be very familiar with: "The people of this state do not yield their sovereignty to the agencies that serve them. The people, in delegating authority, do not give their public servants the right to decide what is good for the people to know and what is not good for them to know. " Here are my further questions in blue: 1. These LLCs are for profit. Why are we working with for profit companies on this, especially given your statement that this will never make profit? Ignite Youth Ice, LLC is a wholly owned subsidiary of a non-profit organization (Innovia Ignite Foundation), so the project will be under the umbrella of a non-profit. Also, the ground lease is structured such that funds collected by Lessees are required to be devoted to operation of and programming for the ice sports facility, including making it accessible to economically disadvantaged persons. Thus, no net profits will be generated for Lessees that they could take out as profit or otherwise divert away from the ice sports facility. This answer is not responsive. Being owned by or under the umbrella of a non-profit org does not preclude profit for this LLC, or those on the board. The structure of the ground lease is insufficient to cover for using LTAC funds to benefit a for profit entity. Wouldn't loan repayments be monies diverted from the ice sports facility? 2. What financial responsibility determination has been done with these LLCs? Both are brand new LLC's, why would we entrust brand new LLC's with a 75 year lease, especially considering the very loose language on transferring this lease? Who sits on the boards of the LLCs? The LLCs are connected to Innovia (a well- known and well -established non-profit organization) and Bill Lawson —who is well known throughout the area to be a very successful land developer. Also, any institution lending funds to Lessees for the project will require Mr. Lawson to personally guarantee any loan, and the ground lease only allows lending institutions (referred to in the lease as "Leasehold Mortgagees") to obtain security interests in Lessee's improvements on the land — not the land itself. There are adequate assurances that both Lessees are financially capable and motivated to fulfill the terms of the ground lease. This answer is not responsive. What does being "connected to" mean legally? What precisely is the connection? What do you mean by "adequate assurances"? what are the adequate assurances? Surely you aren't saying `trust me'? what's next, `I'm here to help'? 3. What percentage is each LLC owning of this lease? Why isn't this specified? Each LLC should be separately liable for the whole lease making the financial responsibility even more dubious. The lease expressly states the Lessees are joint tenants. As joint tenants, each is independently responsible to ensure all Lessee obligations under the lease are met. This answer is not responsive. See counterpoint above. 4. What are the details of the offers to purchase the land? Why were these not formally presented to the council? We do not know what you are referring to, so we will answer as best we can. The City has not received any offers to purchase the land, so there was nothing to present in that regard. If you are referring to the right of first refusal and/or option to purchase identified in the proposed lese, the details of those were formally presented to Council in the agenda packet materials and discussed during the Council meeting. non -responsive. at approximately 2 hours and 39 minutes into the last city council meeting, Manager Hohman discussed a "conversation" he had with a local business owner who wanted to do "something" with the property if he could acquire it, and went on to opine that we may get several offers if we were willing to sell the land. Why did you not disclose what he wanted to do and who he was? Are you assuming I forgot that you said this? Either that was a lie then or you are lying now. The people deserve to know the substance of that conversation, and if that could be a viable opportunity. 5. Once we received other interests why didn't we do a formal RFP for the use of this land? As stated above, we are not aware of anybody expressing an interest in the Sullivan Property other than Mr. Lawson/Innovia wanting to provide the community with a public ice sports facility. Economic development frequently occurs due an agency's ability to recognize opportunities and then to timely act on those opportunities. The City had already identified the need for an ice sports facility to enhance youth sports tourism and regional need but it was deemed unfeasible because of the high development costs of the facility. The proposal presents a once in lifetime opportunity to bring a much -needed facility to the community without the City having to commit the capital investment to construct the facility. Again, non responsive? How can you say you are not aware of anybody, when you presented the opposite? Again, either you were lying then or now in either case this extremely concerning. 6. If we sold this parcel as is, why would we have to pay for the infrastructure? Why wouldn't it be the buyers responsibility? The statement by staff at the 4/21 /2026 Council meeting was that the City would have to install the infrastructure improvements if the City were to develop the property itself — not that the City would have to install infrastructure improvements if it sold the property. However, were the City to sell the property, it is possible that the City could be required to pay for a proportionate share of those infrastructure improvements that traverse and benefit City property depending on the circumstances. There seems to be a lack of understanding that the access road traverses through the City's current Sullivan Park property which is separate from the parcel where the proposed ice rink facility would be constructed. There seems to be a lot of theoretical here. During the presentation you flat out stated that theoretical incomes should not be used, well by the same token theoretical costs should not be used. It should never have been stated that the city would have to pay these costs "either way". 7. If leasing property with an option to purchase improvements is an option to subvert procurement and contracting regulations, why don't we do this for every project we build? Leasing land to a third party with an option to purchase is allowed when there is no obligation for the City to exercise the option and no pre- determined decision to exercise the option. We cannot do that for a project where the City fully intends to be the owner from the outset (such as road improvements, construction of city hall, etc.) because it would not be a "true" option to purchase. Leasing with an option to purchase also requires a developer or contractor willing to pay for the improvements on their own and to accept that they may not be paid for their work. Contractors for street projects and park projects have not been willing to do so, indeed, we generally see the opposite where they seek change orders to increase and maintain their profit margin. Have we tried? These "intention" points are extremely loose. How can you construe the city's intention when there are 7 council members who would have to vote? It seems there is some convenient arguing going on here, when its convenient you dismiss hypotheticals, when its not you fully endorse hypotheticals. 8. How much exactly is the donor giving? Much was said about how amazing the business plan is, why are you not sharing the details with the council? This would include what the plan is for the debt. The debt will be the donor's and personally guaranteed by the donor. The financial risk is on the donor- not the City. Further, regardless of the amount of debt, the lease is structured to focus on the completion of construction and ongoing operations of the facility. If there is noncompliance and default on either of those critical components, the City has the option to require the lessee to return the site to its original state so the City can utilize it for other purposes. how do we know this? Where is it written? Where are the operating agreements for the LLC's? if the LLC's go bankrupt because of the debt how will they pay to restore the property? Is their a performance bond on that? Again, when convenient you insist that the financial plan is so good, and we should trust everyone, but when not convenient you say its not our business. 9. Why did we agree to cover operational expenses without knowing that there will be debt on this project? The City is not agreeing to "cover" the ice sports facility's operational expenses. LTAC funds may be used, on a reimbursement request basis, for operational expenses only to the extent ice rink revenues are not sufficient to cover Lessee's operation costs after paying maintenance expenses. LTAC funds are also only available subject to the standard lodging tax application and approval process, allowing the LTAC and Council to review and approve or deny the proposed uses of lodging taxes. How can you start an explanation by saying we aren't agreeing to cover the debt and finish by explaining precisely that we are. Sure there are some technical loopholes, but we already voted to dedicate these funds. How is reimbursement not the same as "cover"? Why are we paying to service debt on this project? The City will not pay for Lessee's debt service on the project as this is not an allowed reimbursable expense. so what you are saying is that we will pay some other expense that would ordinarily be covered by operational income in order for the LLC's to use operational income to pay the debt. This is creative financing but its also extremely misleading. If any operational income is used to cover debt, we are paying it through reimbursement. I don't see a circumstance where any debt on this project wouldn't be paid out of operational income, which would lead to lest revenue to cover expenses, which would then lead to us covering more expenses, and thus essentially servicing the debt. Why would we do this? How is this different than what the PAC was asking for? PAC was asking the City to issue $28 million in bonds (i.e. take out a $28 million loan) and give the proceeds to PAC to build the theatre or to issue the bond and own the building outright. The City would be responsible for making sure the bonds funds were fully paid back to the investors with interest. If PAC defaulted on bond payments, the City would be on the hook for the $28 million. With the ice sports facility lease, the City is not taking out a loan or issuing bonds. Any loan would be solely the responsibility of Lessees and guarantors (none of which would include the City). So we will just be on the hook for doing something with the facility itself if they default. Again not seeing the difference, especially since these LLC's have no financial history. 10. Who will pay for the promotional costs with Spokane Sports and/or 116 and west? If we will be paying these costs why were they not included in the pro forma? The promotional costs will be paid for by proponents as part of their business plan. These could be eligible reimbursements from the City's TPA and/or LTAC awards if recommended by those advisory committees. so in other words, we will. 11. What timeline is required for developing the commercial pads? Would the lessee be out of compliance if they were making "reasonable efforts" for that development but not actually developing? In this case doesn't this incentivize them to slow roll development since we are covering operational losses? There is no required timeline to develop the commercial pads. A deadline would not make sense because (1) it only benefits the lessee to develop the commercial parcels ASAP, and (2) the timing depends in large measure on the market. Moreover, the lease motivates Lessees to develop the commercial parcels within at least the first 5 years because the LTAC funding ends after year 5 of the lease and lessee will want those funds to cover ice sports facility operational expenses. It's actually the opposite. The Lessee's incentive would be to not build or at the very least slow roll in order to maximize the LTAC fund recovery. The timing depending on the market is code for we will get around to it when its convenient. 12. Why was there no serious consideration for opportunity cost? Reasonable lease income could easily be calculated, why did we not include that? The decision before the City Council is to move forward or not on the proposed land lease. This is an opportunity before you now that would be lost if the Council desired to investigate other alternatives. Therefore, the potential income from a theoretical proposal is not relevant. Why would it be lost? What is the pressing need to get this done right now? how could a matter of a couple months affect any of this? Also, this investigation could have been done over the last year that you knew about the project. If there is all of the sudden a pressing need, then the city manager failed in his responsibility to do due diligence. 13. Why did you allow Innovia to lie to us about their involvement with the PAC? How could theyjustify stating they were not involved considering theirwebsite: https://innovia.or /news/regional-interest-in-the- spokane_valley_-performing-arts-center-continues-to-rise/ (including a quote from the same Shelly O'Quinn) and the spokesman review: https://www.spol<esman.com/stories/2021/nov/01/36-million- spokane-valley-performing-arts-center-a/. Clearly, they were involved since they were managing endowments funded by the PAC. Surely the city knew this from the project presentations 2019-2023. As you stated, Innovia merely managed funds from the donors of that project. Innovia did not own, manage, or present this project in front of the City Council. Ms. Bueller's public comments at the meeting recalling Innovia presenting this project are incorrect. Many in the community would have liked the theater to succeed and have stated this publicly. Wishing well for a project and being responsible for its development, total funding, and project management are very different things. Innovia was not responsible for any of those aspects of the theater project. So they were involved. It was a misstatement for Ms. Quinn to say she had no involvement. Managing money and making donations is substantial involvement. Ms. Quinn's statement: "Innovia was NOT involved in the theater project" was false. 14. What assurance do we have that the donor will not contract or subcontract to his own company for the construction? Donor is working with Garco Construction Inc., which is not owned by the donor. Also, it will be a private project paid for with private funds —not public funds. Non Responsive. it seems when it is convenient this project is described as a public good project and when not convenient it is private. How do we know Garco will not sub to the donnor? 15. Can we verify the cost of the sewer lift maintenance as being 7,000 per year? This information came directly from a company that specializes in in sewer lift stations. 16. Who are the beneficial owners, managers, members, and guarantors of each LLC, and why were those identities not clearly disclosed in the lease materials? This information is not relevant. It is completely relevant. We are essentially donating a 99 year to these groups. We should know who is benefiting from our city assets. Its not up to the city staff to decide what is relevant. If you have this information you should answer, if you don't it is negligence. 17. Are any individuals associated with the LLCs indemnifying the City personally, or is the City relying solely on thin LLC entities? The City is not building or operating anything on the land. The donor is contributing his own private funds and borrowing (potentially) money on his credit and against his own assets. Lessees are required to have insurance that would cover third party claims and name the City as an additional insured. The City therefore has minimal risk exposure. The city is absolutely building on the land. If the insurance is insufficient to cover an incident (considering ice sports are some of the riskiest sports, this is especially relevant), then why couldn't an agreived party also sue the city? If the donnor or innovia were also guaranteeing the indemnification personally that would add a layer of protection above the insurance caps. 18. If one LLC dissolves, becomes insolvent, or defaults, what exact remedies does the City have? The other LLC would remain responsible under the lease. Ultimately, if both LLCs dissolved, the City would own all improvements on the land. Exactly, so it would be up to us to restore it in this case. In question 8 you stated they would have to restore it, now you are stating it would be our problem. 19. Can the lease be assigned, sold, pledged, refinanced, or transferred without full Council approval? If the mandatory conditions identified in the lease for the transaction are satisfied, then "yes." 20. Will the City require audited annual financial statements from each LLC for the life of the lease? No. WHY NOT? This facility is being granted huge amounts of city fund and assets. If they were a nonprofit they would have required audited financial statements, why are we not requiring this especially when we are agreeing to cover operational losses? How can we be sure those losses are real and not fraud waste and abuse without at least audited statements? How much cash is the donor contributing on day one, and how much is contingent, pledged, or conditional? Again, this is not relevant as the City has no financial stake in the development of the ice rink facility. This is absolutely relevant. Staff has no authority to determine what is relevant to the council. This is a violation of policy of answering questions. These LLC's are all getting huge amounts of public assets, we should know this especially when so many different numbers are being thrown around in news reports. You all are so dedicated to fighting what you call "misinformation" unless its convenient. 21. How much debt will be placed on the project, at what interest rate, and who guarantees repayment? How much debt will be placed on the project is up to the Lessees. Lessees guarantee payment by granting the lender a security interest in the improvements (not the [and) and, likely, a personal guarantee from the donor. Yes, but we are guaranteeing financial losses. We should know up front how much operational income will be going to service debt. 22. What happens if construction bids exceed budget? Who covers overruns —the donor, lenders, or taxpayers indirectly? Lessees for ice rink and commercial sites. City is responsible for its portion of the infrastructure improvements. 23. If the donor withdraws, dies, changes priorities, or fails to fund, what protections does the City have? If Lessees do not use the land for the intended purpose, then the lease terminates. Lessees must restore the land to its original condition. if Lessee has no assets to resore the land, its up to us. Considering the Lessees are shell corps, this is far from a comforting guarantee. 24. Has the donor provided proof of funds? Also not relevant. If the project doesn't move forward, the City maintains ownership of the underlying property. This is absolutely relevant. Staff has no authority to determine what is relevant to the council. This is a violation of policy of answering questions. This is simple responsibility determination, if we don't have this it shows negligence. 25. Did any City official disclose personal relationships with parties who mayfinancially benefit from the project? This is a non-profit project. There are no City officials that will financially benefit from this project. Outside of the professional relationships discussed at the April 21 S` meeting, there are no relationships between City officials and the parties. The benefit to City officials will be the happy children and adults that will be able to learn to skate at this facility and the tax revenue received by the City for the expenditures from visitors to the City that will make future City budgets easier to prepare. 26. What would the City earn over 75 years if this parcel were sold and placed on the tax rolls? That would depend on when (and if) it was sold, the sale price, and what was developed on the property. This is also not relevant because you are being asked to decide on this proposal and not on the property being sold. This is absolutely relevant. Staff has no authority to determine what is relevant to the council. This is a violation of policy of answering questions. This is simple opportunity cost analysis, if we don't have this it shows negligence. 27. Will all side letters, memorandums, donor agreements, and amendments be public records? Anything created or received by the City will be a public record. There are no side letters, memorandums of understanding, or other amendments between the City and Innovia, Bill Lawson, Garco, or any other party for this proposal. The sole proposal and terms governing the proposed project are contained within the lease that was presented to Council on April 21It. We can't speak to any agreements that Innovia, Garco, or Bill Lawson have between themselves. 28. What measurable KPIs will be reported annually (attendance, revenue, subsidies, maintenance, hotel nights, tax generation)? Lessees must issue annual reports detailing the amount and type of public benefits provided to the community by the ice sports facility, revenues and expenses of the ice sports facility, the revenues and expenses for Lessee's commercial parcel income, and how the commercial parcel net revenue was spent on the ice sports facility. 29. What clawback provisions exist if promised development does not occur? If Lessees do not use the land for the intended purpose, then the lease terminates. Lessees must restore the land to its original condition. 30. Why should Spokane Valley taxpayers subsidize a regional facility if regional partners are not contributing capital? The lessees are contributing capital for this project. Also, the project is to benefit the residents and businesses of Spokane Valley. Spokane Valley is where the majority of economic benefits will be generated. Moreover, the majority of City funding for infrastructure improvements and ice sports facility operations comes from lodging taxes which are overwhelmingly paid by persons who do not live in Spokane Valley. From: John Hohman <jhohman@spol<anevalleywa.gov> Sent: Monday, April 27, 2026 5:25 PM To: City Council<CityCouncil@spol<anevalleywa.gov> Cc: Kelly Konkright<I<1<onl<right@spokanevallevwa.gov>; Erik Lamb <elamb@spokanevalleywa.gov_>; Gloria Mantz <gmantz@spol<anevalleywa.gov> Subject: RE: Ice Rink Lease Questions Councilmembers Merkel and Kelly, Thanks for following up. To clarify, we requested your input because you stated that you had a number of questions during the April 21 sl meeting. In an effort to be efficient with time, I reached out to you both so we could answer your questions prior to the motion consideration scheduled for the April 28`h meeting. My observation of the meeting was that Deputy Mayor Hattenburg ended discussion due to the non -productive argument that ensued after Councilmember's Haley's comments concerning the proposal. If the conversation had stayed civil per the Governance Manual, maybe the Deputy Mayor would not have moved to end the discussion which would have resulted in more interaction on the item. The Mayor did allow comments at the end of the meeting so every council member was able to speak about their views of the project. This lease document is complicated which is why staff had such a detailed and lengthy presentation on April 21 st. It is also why staff has prepared the following responses to your questions. We anticipate that these answers will help explain the lease in more detail. Please see our responses below in Red font: These LLCs are for profit. Why are we working with for profit companies on this, especially given your statement that this will never make profit? Ignite Youth Ice, LLC is a wholly owned subsidiary of a non-profit organization (Innovia Ignite Foundation), so the project will be under the umbrella of a non-profit. Also, the ground lease is structured such that funds collected by Lessees are required to be devoted to operation of and programming for the ice sports facility, including making it accessible to economically disadvantaged persons. Thus, no net profits will be generated for Lessees that they could take out as profit or otherwise divert away from the ice sports facility. 2. What financial responsibility determination has been done with these LLCs? Both are brand new LLC's, why would we entrust brand new LLC's with a 75 year lease, especially considering the very loose language on transferring this lease? Who sits on the boards of the LLCs? The LLCs are connected to Innovia (a well- known and well -established non-profit organization) and Bill Lawson —who is well known throughout the area to be a very successful land developer. Also, any institution lending funds to Lessees for the project will require Mr. Lawson to personally guarantee any loan, and the ground lease only allows lending institutions (referred to in the lease as "Leasehold Mortgagees") to obtain security interests in Lessee's improvements on the land — not the land itself. There are adequate assurances that both Lessees are financially capable and motivated to fulfill the terms of the ground lease. 3. What percentage is each LLC owning of this lease? Why isn't this specified? Each LLC should be separately liable for the whole lease making the financial responsibility even more dubious. The lease expressly states the Lessees are joint tenants. As joint tenants, each is independently responsible to ensure all Lessee obligations under the lease are met. 4. What are the details of the offers to purchase the land? Why were these not formally presented to the council? We do not know what you are referring to, so we will answer as best we can. The City has not received any offers to purchase the land, so there was nothing to present in that regard. If you are referring to the right of first refusal and/or option to purchase identified in the proposed lese, the details of those were formally presented to Council in the agenda packet materials and discussed during the Council meeting. Once we received other interests why didn't we do a formal RFP for the use of this land? As stated above, we are not aware of anybody expressing an interest in the Sullivan Property other than Mr. Lawson/Innovia wanting to provide the community with a public ice sports facility. Economic development frequently occurs due an agency's ability to recognize opportunities and then to timely act on those opportunities. The City had already identified the need for an ice sports facility to enhance youth sports tourism and regional need but it was deemed unfeasible because of the high development costs of the facility. The proposal presents a once in lifetime opportunity to bring a much -needed facility to the community without the City having to commit the capital investment to construct the facility. 6. If we sold this parcel as is, why would we have to pay for the infrastructure? Why wouldn't it be the buyers responsibility? The statement by staff at the 4/21 /2026 Council meeting was that the City would have to install the infrastructure improvements if the City were to develop the property itself — not that the City would have to install infrastructure improvements if it sold the property. However, were the City to sell the property, it is possible that the City could be required to pay for a proportionate share of those infrastructure improvements that traverse and benefit City property depending on the circumstances. There seems to be a lack of understanding that the access road traverses through the City's current Sullivan Park property which is separate from the parcel where the proposed ice rink facility would be constructed. 7. If leasing property with an option to purchase improvements is an option to subvert procurement and contracting regulations, why don't we do this for every project we build? Leasing land to a third party with an option to purchase is allowed when there is no obligation for the City to exercise the option and no pre- determined decision to exercise the option. We cannot do that for a project where the City fully intends to be the owner from the outset (such as road improvements, construction of city hall, etc.) because it would not be a "true" option to purchase. Leasing with an option to purchase also requires a developer or contractor willing to pay for the improvements on their own and to accept that they may not be paid for their work. Contractors for street projects and park projects have not been willing to do so, indeed, we generally see the opposite where they seek change orders to increase and maintain their profit margin. 8. How much exactly is the donor giving? Much was said about how amazing the business plan is, why are you not sharing the details with the council? This would include what the plan is for the debt. The debt will be the donor's and personally guaranteed by the donor. The financial risk is on the donor— not the City. Further, regardless of the amount of debt, the lease is structured to focus on the completion of construction and ongoing operations of the facility. If there is noncompliance and default on either of those critical components, the City has the option to require the lessee to return the site to its original state so the City can utilize it for other purposes. 9. Why did we agree to cover operational expenses without knowing that there will be debt on this project? The City is not agreeing to "cover" the ice sports facility's operational expenses. LTAC funds may be used, on a reimbursement request basis, for operational expenses only to the extent ice rink revenues are not sufficient to cover Lessee's operation costs after paying maintenance expenses. LTAC funds are also only available subject to the standard lodging tax application and approval process, allowing the LTAC and Council to review and approve or deny the proposed uses of lodging taxes. Why are we paying to service debt on this project? The City will not pay for Lessee's debt service on the project as this is not an allowed reimbursable expense. I don't see a circumstance where any debt on this project wouldn't be paid out of operational income, which would lead to lest revenue to cover expenses, which would then lead to us covering more expenses, and thus essentially servicing the debt. Why would we do this? How is this different than what the PAC was asking for? PAC was asking the City to issue $28 million in bonds (i.e. take out a $28 million loan) and give the proceeds to PAC to build the theatre or to issue the bond and own the building outright. The City would be responsible for making sure the bonds funds were fully paid back to the investors with interest. If PAC defaulted on bond payments, the City would be on the hook for the $28 million. With the ice sports facility lease, the City is not taking out a loan or issuing bonds. Any loan would be solely the responsibility of Lessees and guarantors (none of which would include the City). 10. Who will pay for the promotional costs with Spokane Sports and/or 116 and west? If we will be paying these costs why were they not included in the pro forma? The promotional costs will be paid for by proponents as part of their business plan. These could be eligible reimbursements from the City's TPA and/or LTAC awards if recommended by those advisory committees. 11. What timeline is required for developing the commercial pads? Would the lessee be out of compliance if they were making "reasonable efforts" for that development but not actually developing? In this case doesn't this incentivize them to slow roll development since we are covering operational losses? There is 10 no required timeline to develop the commercial pads. A deadline would not make sense because (1) it only benefits the lessee to develop the commercial parcels ASAP, and (2) the timing depends in large measure on the market. Moreover, the lease motivates Lessees to develop the commercial parcels within at least the first 5 years because the LTAC funding ends after year 5 of the lease and lessee will want those funds to cover ice sports facility operational expenses. 12. Why was there no serious consideration for opportunity cost? Reasonable lease income could easily be calculated, why did we not include that? The decision before the City Council is to move forward or not on the proposed land lease. This is an opportunity before you now that would be lost if the Council desired to investigate other alternatives. Therefore, the potential income from a theoretical proposal is not relevant. 13. Why did you allow Innovia to lie to us about their involvement with the PAC? How could theyjustify stating they were not involved considering their website: erest-in-tha- spokanomm. sookane-valley-performing-arts-center-continues-to-rise/ (including a quote from the same Shelly O'Quinn) and the spokesman review: https://www.spokesman.com/stories/2021/nov/01/36-million- spol<ane-valley-performing-arts-center-a/. Clearly, they were involved since they were managing endowments funded by the PAC. Surely the city knew this from the project presentations 2019-2023. As you stated, Innovia merely managed funds from the donors of that project. Innovia did not own, manage, or present this project in front of the City Council. Ms. Bueller's public comments at the meeting recalling Innovia presenting this project are incorrect. Many in the community would have liked the theater to succeed and have stated this publicly. Wishing well for a project and being responsible for its development, total funding, and project management are very different things. Innovia was not responsible for any of those aspects of the theater project. 14. What assurance do we have that the donor will not contract or subcontract to his own company for the construction? Donor is working with Garco Construction Inc., which is not owned by the donor. Also, it will be a private project paid for with private funds — not public funds. 15. Can we verify the cost of the sewer lift maintenance as being 7,000 per year? This information came directly from a company that specializes in in sewer lift stations. 16. Who are the beneficial owners, managers, members, and guarantors of each LLC, and why were those identities not clearly disclosed in the lease materials? This information is not relevant. 17. Are any individuals associated with the LLCs indemnifying the City personally, or is the City relying solely on thin LLC entities? The City is not building or operating anything on the land. The donor is contributing his own private funds and borrowing (potentially) money on his credit and against his own assets. Lessees are required to have insurance that would cover third party claims and name the City as an additional insured. The City therefore has minimal risk exposure. 18. If one LLC dissolves, becomes insolvent, or defaults, what exact remedies does the City have? The other LLC would remain responsible under the lease. Ultimately, if both LLCs dissolved, the City would own all improvements on the land. 19. Can the lease be assigned, sold, pledged, refinanced, or transferred without full Council approval? If the mandatory conditions identified in the lease for the transaction are satisfied, then "yes." 20. Will the City require audited annual financial statements from each LLC for the life of the lease? No. How much cash is the donor contributing on day one, and how much is contingent, pledged, or conditional? Again, this is not relevant as the City has no financial stake in the development of the ice rink facility. 21. How much debt will be placed on the project, at what interest rate, and who guarantees repayment? How much debt will be placed on the project is up to the Lessees. Lessees guarantee payment by granting the 11 lender a security interest in the improvements (not the [and) and, likely, a personal guarantee from the donor. 22. What happens if construction bids exceed budget? Who covers overruns —the donor, lenders, or taxpayers indirectly? Lessees for ice rink and commercial sites. City is responsible for its portion of the infrastructure improvements. 23. If the donor withdraws, dies, changes priorities, or fails to fund, what protections does the City have? If Lessees do not use the land for the intended purpose, then the lease terminates. Lessees must restore the land to its original condition. 24. Has the donor provided proof of funds? Also not relevant. If the project doesn't move forward, the City maintains ownership of the underlying property. 25. Did any City official disclose personal relationships with parties who may financially benefit from the project? This is a non-profit project. There are no City officials that will financially benefit from this project. Outside of the professional relationships discussed at the April 21 s` meeting, there are no relationships between City officials and the parties. The benefit to City officials will be the happy children and adults that will be able to learn to skate at this facility and the tax revenue received by the City for the expenditures from visitors to the City that will make future City budgets easier to prepare. 26. What would the City earn over 75 years if this parcel were sold and placed on the tax rolls? That would depend on when (and if) it was sold, the sale price, and what was developed on the property. This is also not relevant because you are being asked to decide on this proposal and not on the property being sold. 27. Will all side letters, memorandums, donor agreements, and amendments be public records? Anything created or received by the City will be a public record. There are no side letters, memorandums of understanding, or other amendments between the City and Innovia, Bill Lawson, Garco, or any other party for this proposal. The sole proposal and terms governing the proposed project are contained within the lease that was presented to Council on April 21 ". We can't speak to any agreements that Innovia, Garco, or Bill Lawson have between themselves. 28. What measurable KPIs will be reported annually (attendance, revenue, subsidies, maintenance, hotel nights, tax generation)? Lessees must issue annual reports detailing the amount and type of public benefits provided to the community by the ice sports facility, revenues and expenses of the ice sports facility, the revenues and expenses for Lessee's commercial parcel income, and how the commercial parcel net revenue was spent on the ice sports facility. 29. What clawback provisions exist if promised development does not occur? If Lessees do not use the land for the intended purpose, then the lease terminates. Lessees must restore the land to its original condition. 30. Why should Spokane Valley taxpayers subsidize a regional facility if regional partners are not contributing capital? The lessees are contributing capital for this project. Also, the project is to benefit the residents and businesses of Spokane Valley. Spokane Valley is where the majority of economic benefits will be generated. Moreover, the majority of City funding for infrastructure improvements and ice sports facility operations comes from lodging taxes which are overwhelmingly paid by persons who do not live in Spokane Valley. I anticipate that these answers will assist you on determining how you both will vote on this motion. We will have this information available during the presentation portion of the discussion. 12 Thanks, John Hohman City Manager From: Albert Merkel <amerkel@spokanevalleywa.gov> Sent: Thursday, April 23, 2026 3:52 PM To: John Hohman <ihohman@spokanevallevwa.gov>; Michael Kelly <mkelly@spokanevalleywa.gov_> Cc: Laura Padden <Ipadden@spokanevalleywa.gov>; Kelly Konkright<I<Konkright@spolcanevalleywa.gov>; Erik Lamb <elamb@spokanevalleywa.gov>; Gloria Mantz <gmantz@spokanevalleywa.gov> Subject: RE: Ice Rink Lease Questions John, Thank you for reaching out and asking for my opinion regarding the proposed ice facility lease. I do find the timing notable. During many action items, I have been cut off from asking questions or, as you described it, forced to have an "abbreviated conversation." That raises an obvious question: why is this the first time you are asking for my input? If the Mayor and staff truly care about having a real conversation on this matter, why not simply allow the full Council discussion to occur openly and in its fullest during the public meeting process, rather than curtail the discussion and try to resolve this without the public seeing it? If Councilmembers feel that discussing a 100 year lease with huge implications for our city is too taxing or a waste of time, maybe they should resign and take up a hobby like knitting. We were elected to discuss the people's business, not blow through meetings to make bed time. Unlike Councilmember Haley, who has expressed the view that councilmembers should asl<questions and receive answers behind closed doors away from the eyes and ears of the public, I strongly disagree. I believe in full transparency between the Council, staff, and the public we serve. Questions should be asked in public, answers should be given in public, and residents deserve to hear both. As you well know I often ask questions I know the answer too because the public also deserves to know. Further I don't appreciate the continued insinuations that I don't understand or don't prepare for meetings simply because I ask questions when other councilmembers sit quiet. I would also appreciate it if staff members would do a betterjob of not being condescending to the public including but not limited to sneering, laughing, rolling eyes at members of the public when they testify (also council members, but at least they are accountable to the public). This is a huge violation of city policy but you continue to allow it to happen, which is extremely unprofessional. All that being said, here are the questions you requested. These are not only for me personally, nor are they only for councilmembers, they are for the public. When discussion is cut short, it is the public that is being cut out. To that end, I am requesting that the following questions be answered both in writing and in the public forum before any final action is taken on this lease: 1. These LLCs are for profit. Why are we working with for profit companies on this, especially given your statement that this will never make profit? 13 2. What financial responsibility determination has been done with these LLCs? Both are brand new LLC's, why would we entrust brand new LLC's with a 75 year lease, especially considering the very Loose language on transferring this lease? Who sits on the boards of the LLCs? 3. What percentage is each LLC owning of this lease? Why isn't this specified? Each LLC should be separately liable for the whole lease making the financial responsibility even more dubious. 4. What are the details of the offers to purchase the Land? Why were these not formally presented to the council? 5. Once we received other interests why didn't we do a formal RFP for the use of this land? 6. If we sold this parcel as is, why would we have to pay for the infrastructure? Why wouldn't it be the buyers responsibility? 7. If leasing property with an option to purchase improvements is an option to subvert procurement and contracting regulations, why don't we do this for every project we build? 8. How much exactly is the donor giving? Much was said about how amazing the business plan is, why are you not sharing the details with the council? This would include what the plan is for the debt. 9. Why did we agree to cover operational expenses without knowing that there will be debt on this project? Why are we paying to service debt on this project? I don't see a circumstance where any debt on this project wouldn't be paid out of operational income, which would lead to lest revenue to cover expenses, which would then lead to us covering more expenses, and thus essentially servicing the debt. Why would we do this? How is this different than what the PAC was asking for? 10. Who will pay for the promotional costs with Spokane Sports and/or 116 and west? If we will be paying these costs why were they not included in the pro forma? 11. What timeline is required for developing the commercial pads? Would the lessee be out of compliance if they were making "reasonable efforts" for that development but not actually developing? In this case doesn't this incentivize them to slow roll development since we are covering operational losses? 12. Why was there no serious consideration for opportunity cost? Reasonable lease income could easily be calculated, why did we not include that? 13. Why did you allow Innovia to lie to us about their involvement with the PAC? How could they justify stating they were not involved considering their website: https//innovia.org/news/regional- interest-in-the-Spokane-valley-performing-arts-center continues to -_rise/ (including a quote from the same Shelly O'Quinn) and the spokesman review: https://www,spoI<esman.com/stories/2021/nov/01/_36 _million -Spokane -valley -performing -arts- centerra/. Clearly, they were involved since they were managing endowments funded by the PAC. Surely the city knew this from the project presentations 2019-2023. 14. What assurance do we have that the donor will not contractor subcontract to his own company for the construction? 15. Can we verify the cost of the sewer lift maintenance as being 7,000 per year? 16. Who are the beneficial owners, managers, members, and guarantors of each LLC, and why were those identities not clearly disclosed in the lease materials? 17. Are any individuals associated with the LLCs indemnifying the City personally, or is the City relying solely on thin LLC entities? 18. If one LLC dissolves, becomes insolvent, or defaults, what exact remedies does the City have? 19. Can the lease be assigned, sold, pledged, refinanced, or transferred without full Council approval? 20. Will the City require audited annual financial statements from each LLC for the life of the lease? How much cash is the donor contributing on day one, and how much is contingent, pledged, or conditional? 14 21. How much debt will be placed on the project, at what interest rate, and who guarantees repayment? 22. What happens if construction bids exceed budget? Who covers overruns —the donor, lenders, or taxpayers indirectly? 23. If the donor withdraws, dies, changes priorities, or fails to fund, what protections does the City have? 24. Has the donor provided proof of funds? 25. Did any City official disclose personal relationships with parties who may financially benefit from the project? 26. What would the City earn over 75 years if this parcel were sold and placed on the tax rolls? 27. Wilt all side letters, memorandums, donor agreements, and amendments be public records? 28. What measurable KPIs will be reported annually (attendance, revenue, subsidies, maintenance, hotel nights, tax generation)? 29. What clawback provisions exist if promised development does not occur? 30. Why should Spokane Valley taxpayers subsidize a regional facility if regional partners are not contributing capital? Coucilman Al Merkel From: John Hohman <ihohman@spokanevalleywa.gov> Sent: Wednesday, April 22, 2026 1:16 PM To: Albert Merkel <amerkel@spol<anevalleywa.gov>; Michael Kelly <ml<elly@spol<anevalleywa.gov> Cc: Laura Padden <Ipadden@spokanevalleywa.gov>; Kelly Konkright<kl<onl<right@spol<anevalleywa.gov>; Erik Lamb <elamb@spokanevalle w�ov>; Gloria Mantz <gmantz@spokanevalleywa.gov> Subject: Ice Rink Lease Questions Gentlemen, Due to our abbreviated discussion last night, I'm checking in with both of you to see if you have any remaining questions that you may not have had time to ask regarding the Ice Sports Facility land lease. Please provide me with your questions and I will do my best to have a timely response for you. Thanks, John 1s