(The Center Square) – Spokane Valley officials approved a 99-year ground lease on Tuesday for $1 per year, paving the way for the construction of a $44 million privately-operated ice rink facility on city-owned property.
The facility is intended to fill a service gap for ice time, with the lessees agreeing to provide 500 hours annually of free or discounted use after it opens in exchange for the below-market rate.
The deal also allows the city to purchase the facility later for $9.4 million once the project debt dips below that level.
While the ice rink was largely framed as a free investment for the community, saving taxpayer dollars on a project identified as a priority years ago, the city will front some of the money to make it happen.
“I feel like this lease isn’t the best that could have been done for the citizens,” Councilmember Michael Kelly said Tuesday before voting in support in response to public testimony, despite his own concerns.
“If the wildest projections, or the best projections of the pro forma, come true,” he continued, “10,000 additional hotel room nights, that’s about $1.5 million a night; at 3.3%, we will recover approximately $49,500 a year on a $5 million investment, it would take us close to 100 years to recover that money.”
Transportation improvements to the land will cost taxpayers about $3 million. The Valley’s Lodging Tax Advisory Committee has also recommended subsidizing the facility’s operations for the first five years.
That could amount to up to $600,000 annually in hotel tax revenue, earmarked for tourism promotion.
While Kelly opposed a motion last week to bring the lease to a vote, Councilmember Al Merkel was the only official to vote against the agreement on Tuesday.
Merkel also raised sustainability concerns, arguing that many of his questions about the project weren’t entirely answered by City Manager John Hohman.
Merkel is worried about committing more than 100,000 residents to a project for generations to come.
“The parties that we’re executing this lease with are LLCs that are separate from those,” Merkel said, noting that the donor, Bill Lawson of A&A construction, and the operator, Innovia Foundation, have set up companies to take on the project.
“I’m really confused as to how we can say that for the next 100 years these LLCs [will be] financially responsible when they just came into existence like a month ago,” he said.
Hohman said that, in the worst-case scenario, the property would likely still benefit from the Valley’s infrastructure upgrades and that the site wouldn’t look much different from the gravel pit it is today.
The council purchased the property in January 2025 for about $844,000 to expand Sullivan Park, and then approved a $1.2 million water-line project in April 2025, given the potential for economic development.
However, the then-anonymous donor, Lawson, later identified by The Spokesman-Review, had already approached Hohman months earlier, in the fall of 2024.
Innovia Foundation didn’t present the proposal to the dais until August 2025, after the council purchased the property and approved the water line.
Last week, Hohman said there wasn’t a concrete proposal in the works until Innovia presented it last summer. He also said that planning for the water-line project began in 2014, more than a decade ago.
“We do profit off of it, not financially, but from the well-being of this community, from the standpoint of having a lot of happy, smiling children and adults that now have a new venue to go spend time at,” Hohman said Tuesday in response to Merkel asking if any city official will turn a profit off the project.
Once complete, the Valley will have access to an 80,000-square-foot complex with two ice sheets the size of a National Hockey League venue.
If the city terminates the lease early, it reserves the right to require the lessees to restore the property to its original condition or to leave the improvements in place.
Several community members testified in support of the project, urging the council to allow the project to proceed, given the major investment and service gaps it would address.
A few residents also raised concerns about the revenue the city is missing out on by leasing the land at a far below-market rate.
Some took issue with the timing, taxpayer risks and the transparency of how the project came about.
The other five members of the council voiced strong support for the project when approving the lease.
They say it would’ve cost the city even more to build the ice rink, or millions to expand Sullivan Park.
“Yes, it’s a $1 lease, but we’re buying something in return for that through this process,” Councilmember Ben Wick said.
“This is an ideal location, because you’re right across the street from our mall … you’re right there. Your economic impact is going to be captured by our economic engine, which is the mall,” he added.
