Spokane Valley council advances donor-funded ice sports complex lease after hours-long debate

Spokane Valley's City Council voted 5–2 on April 21 to move forward next week with consideration of a negotiated ground lease that would allow a donor and the Innovia Foundation to build and operate a two-sheet ice sports complex on the city's Sullivan Park property.

City staff and outside advisers told the council the facility would be privately financed and operated by Innovia or entities formed by the donor, with the city responsible only for specified infrastructure: a sewer lift station, two access points and signal work. Staff said the infrastructure package totals about $3,030,000, funded in part by $2,000,000 recommended from the lodging-tax advisory committee plus roughly $1,000,000 from other city funds. The negotiated ground lease before the council ties all commercial-pad revenues to the ice complex and requires the lessee to provide at least 500 hours per year of free or reduced-rate public access for disadvantaged residents.

"This model allows the donor to fund construction and operation while preserving public benefit," City Attorney Kelly Concrete said in a presentation explaining key lease terms, including an initial 75-year lease with an option to extend to 99 years and an option to purchase the improvements for $9.4 million once outstanding debt falls below that threshold.

Opponents raised several concerns at the meeting. Donna Shepherd, who participated by phone during the first public-comment period, asked why the city would accept a $1-per-year lease while paying for sewer lift maintenance and other infrastructure. "It looks like taxpayers will be paying more in expenses than we'll receive in lease income," Shepherd said, asking for written clarifications in the lease about maintenance and subleasing restrictions. City staff responded the lease requires Innovia to install and maintain grease separators and that the city will install and maintain the sewer lift station at an estimated annual maintenance cost of roughly $6,000–$7,000.

Council members split over risk and process. Councilmember Merkel repeatedly pressed staff on liability and the decision to lease rather than sell or issue an RFP; Merkel also flagged that the lessee structure uses new LLCs that lack an operating history. "Why are we signing a 99-year lease to entities with no financial track record?" Merkel asked. Several colleagues defended the negotiated deal as the only realistic path to deliver a large community facility without raising taxes.

Supporters—including hotel operators, youth-sports organizers and the hotel-industry lodging-tax advisory committee—urged the council to advance the item. Jason Greenwell, general manager at Eagles Ice Arena, said region rinks are at capacity and that two additional sheets would allow more tournaments and reduce travel. "We have kids on the ice until after 9 p.m. because there's no capacity; this project addresses that," Greenwell said.

Gloria Mance, who summarized independent pro forma work, cautioned that the earlier SFA economic analysis assumed a city-owned scenario and that the donor-operated model preserves public benefits but reduces some revenue projections. The SFA update estimated construction costs for a city project at $42 million to $51 million and conservative direct visitor spending of $4 million to $7 million across years 1–5; staff said the donor-construct model removes capital burden from the city but means some revenue assumptions change.

The council's 5–2 vote was procedural: it agreed to bring the ground-lease ordinance forward for a formal vote next week. Mayor Laura Padden framed the choice as an opportunity to create a regional youth-sports destination and to use private investment to expand tourism and community programming. Councilmember Kelly and others said their questions were about protecting taxpayers and ensuring reporting and safeguards are in place before final approval.

Next steps: If council places the ground lease on the next agenda, councilors will have a formal vote to approve or reject the negotiated lease; staff said construction is targeted for 2027 if approvals and permitting proceed on the proposed timeline.