A Local Developer’s ROI (Return on Investment)
In the 2019 election City of Spokane Mayoral candidate Nadine Woodward ran on the proposition that she would tackle the increasing presence of homeless people in downtown Spokane. In August of 2019 in a Facebook post she wrote, “Spokane developer Larry Stone has gone to great lengths and personal cost to document the serious problems facing our city.” Stone’s seventeen minute YouTube documentary video entitled “Curing Spokane” dramatized the issue and offered simplistic, law-and-order-based actions to save our downtown. The cost of producing “Curing Spokane” was not a campaign contribution, at least not technically, but it was almost certainly a significant help in Woodward eking out a narrow win in the November 2019 General Election.
Two years later, in early 2022, Mayor Woodward and her administration were desperate to make homelessness less visible downtown. Camp Hope, established in December 2021, aggregated the homeless and represented a glaring reminder of the administration’s failure to provide basic shelter to its citizens in accordance with Martin v. Boise (2018). Mindful of appearances, the Woodward administration sought a location away from downtown in which to shelter the homeless more or less out of sight.
Several spokespeople for the administration have claimed that “100 other properties” were “evaluated”before selecting what became the TRAC Shelter (aka the “Trent Shelter”). “100 properties” always sounded a bit too glib. Of what did these “evaluations” consist? In any case the “100 properties” quote seems to serve as a measure of the Woodward administration’s desperation to buy or lease a property for the purpose of a shelter. Out of this supposedly diligent search, Woodward and company settled on a building then owned by “CDA Loon, LLC”, the building that would become the TRAC Shelter. Representatives of City government, including Woodward’s two conservative allies on the City Council, Bingle and Cathcart, toured the property on March 18, 2022. It was a “public-private partnership” that secured the Woodward administrations lease on the building—and, along the way, gave Woodward’s ally, developer Larry Stone, a lucrative, taxpayer-funded lease based mostly, it appears, on Mr. Stone’s financial capacity to buy the building.
Carl Sagerstrom of RANGEmedia.co, in a superb investigative article entitled “Big political donor bought the Trent shelter location for the city”, takes up the story. (I urge you to click and read the whole article—and to subscribe to RANGEmedia.):
When the city chose the property, Stone did not own it.
The building was owned by CDA Loon, LLC, an affiliate of Berg Manufacturing, which previously operated in the warehouse and had an active lease advertisement for the building. “The City approached the building owner through its [real estate] broker about a potential lease, but was not able to reach an agreement,” City Communications and Marketing Director Brian Coddington told RANGE via email. “The proposed use of the building was a sticking point as was the owner’s desire to sell the building.”
Larry Stone swooped in just six days after the Woodward administration’s March 18th tour. On March 24, Stone bought the Trent building for a sale price of 3.5 million dollars. Stone’s organization sent a draft lease agreement to the City the following day. Thus was born the “public-private partnership” between the City of Spokane, i.e. the Woodward administration, and Spokane developer Larry Stone.
The property that became the TRAC Shelter was purchased, according to publicly available county property records, by “CDA Loon, LLC” in April of 2018 for 1.8M. Note (see Coddington quote above) “the owner’s desire to sell the building” in 2022. Obviously, in 2022, 3.5M was an acceptable sale price to “CDA Loon, LLC”, since that is the price at which Larry Stone snapped it up in March 2022. (The purchase price of 3.5M was almost exactly the county’s “assessed value” of the property.)
The Stone’s five year lease of the TRAC Shelter building to the City contains an option for the City to buy the property, an option that is completely worthless. The option specifies a mechanism for Stone and the City to obtain an appraisal but no requirement to sell at any particular price. When the City Council entertained purchasing the property (as a way to save money in the long run), Stone had the City over a barrel. The appraisal came in at 4.1M, but Stone was quoted as saying he wanted “north of 8M”. Stone, a developer who didn’t acquire the 3.5M to buy the TRAC Shelter building by missing opportunities to profit, knows a good deal when he sees one.
Larry Stone knows which side his bread is buttered on—and he wants to be sure that bread stays butter-side-up. Earlier this year he made donations to the current election campaigns of Mayor Nadine Woodward to continue as Mayor; candidate for City Council President Kim Plese; City Council Member (District 1, NE Spokane) Michael Cathcart; and candidate for City Council Member (District 2, South Hill) Katey Treloar (the one with the ubiquitous blue signs prominently declaring “non-partisan”). All four campaigns, wisely sensitive to the “appearance of corruption”, returned Mr. Stone’s money. (The transactions remain visible on the Public Disclosure Commission’s website.)
But the story doesn’t end there. (See P.S. for more detail.) Thwarted by the earlier return of his contributions to his favored individual candidates’ campaigns, on June 9, 2023 and again on July 13, “Stone Lawrence B” contributed $15,000 to the “Spokane Good Governance Alliance”, a total of $30K, roughly 20% of the total receipts of the “Alliance” in 2023—and more than any other contributor (at the time of this writing). The Public Disclosure Commission reports that Mayor Nadine Woodward’s campaign has already received over $35,000 worth of “independent” support from the “Alliance”. Plese, Cathcart, and Treloar have received lesser amounts of “independent” support from the same entity.
Mr. Stone is a smart businessman who knows that it pays to have allies in City Government—and he has the wealth to wield electoral influence. On account of weak restrictions (thanks to conservative undermining of campaign finance law in the Supreme Court decision Citizens United v. FEC) Mr. Stone can exercise all his “free speech” rights his money can buy in backing the candidates he expects will support his financial interests.
None of this is currently illegal, strictly speaking. It just smells really bad. Pay attention as you fill out your ballot.
Keep to the high ground,
P.S. A “Political Committee” registered in the State of Washington with the Public Disclosure Commission can receive and spend any amount of money to influence voters for or against any candidate—as long as the expenditures are made “independent” of the candidate’s campaign—thanks to Citizens United v. FEC.
Money finds a way.
Spending money through a Political Committee offers contributors, be they individuals or businesses, a degree of anonymity as they wield electoral influence. Larry Stone contributed $15,000 to the ironically named “Spokane Good Government Alliance” on June 9, 2023. The “Spokane Good Governance Alliance” this year has a war chest of over $150K that comes from list of just ten contributors at this time, all tied to businesses with a pecuniary interest in the outcome of local elections. Mr. Stone’s $30,000 dwarfs the legally capped contributions that were returned by the individual candidates to whom he tried to contribute. So far the “Spokane Good Governance Alliance” money has gone mostly to advertising and political strategy companies in Arizona and Washington, D.C., entities that will flood the airwaves and the internet with advertising to influence your vote in this year’s local elections.
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