Companies affiliated with Metropolitan Mortgage & Securities Co., of Spokane, have quietly loaned the owner of the Davenport Hotel property downtown more than $1.5 million over the last 18 months, Spokane County records show.


The affiliate companies, Metwest Mortgage Services Inc. and Old Standard Life Insurance Co., loaned the Davenports owner, Davenport Sun International Hotels & Properties Inc., $385,000 and $1,585,000, respectively, in late 1997 and the fall of last year, according to deeds of trust filed with the Spokane County auditors office.


Davenport Suns executive director and chief operating officer, Jeffrey Wai-Kwong Ng, who signed the deeds of trust, confirmed in an interview earlier this week that the loans were made. He said, however, that the larger, more recent loan was used in part to retire the first, smaller one, making the total amount borrowed less than $1.6 million.


He declined to say specifically what the money was used for, but he referred to it as a bridge loan and implied that its being used to cover costs accruing while the company seeks to arrange a larger financing package for the hotels rehabilitation.


Were working on the final stages of a financing agreement, he says, adding that the company hopes to have it in place by the end of this year. The biggest impediment to arranging financing hasnt been the so-called Asian Flu, as many people believe, but rather the downfall of the Russian economy and its effects on lenders, Ng contends.


We have not given up. Thats the good news, he says.


The property pledged as security in the deed documents included the Davenport Hotel, at 807-819 W. Sprague, and land just south of the hotel, at 817 W. First, that currently is used as a parking lot.


Old Standard, which made the larger loan to Davenport Sun, is a former subsidiary that Metropolitan Mortgage sold in 1996 to National Summit Corp., a Delaware corporation owned by C. Paul Sandifur Jr., Metropolitans president and CEO. Old Standard is in the business of acquiring receivables by using investment income, funds derived from the sale of annuities, and receivable cash flows.


Erik Skaggs, Metropolitans manager of community and government relations, declines to discuss any specific financial agreements between Metropolitan and Davenport Sun. However, he says, We have a very strong corporate interest in seeing the Davenport Hotel renovated and opened, and were constantly exploring new ideas and new financial opportunities to help that happen. All I can say is, we are working very diligently to help the Davenport come on line. We think it would be an anchor for downtown revitalization.


Metropolitan has had some (development-related) concepts that would have involved the Davenport and has enjoyed a very good relationships with the Ngs, he says, referring to Jeffrey Ng and other members of the Ng family who are involved with the company.


Recently, he says, Weve been basically trying to assist the Davenport in broadening its exposure, not only in the community, but in the Legislature and back in Congress because it (the hotel) is such a jewel for Spokane.


Metropolitan has ample financial reason to the see the long-awaited Davenport Hotel reopening become a reality. The 14-story, 85-year-old downtown landmark is located just east of the Metro Block, which Metropolitan owns, but mostly vacated two years ago after it bought and moved into the 18-story former Farm Credit Banks Building, at 601 W. First.


Other downtown real-estate development sources here say the value of the Metro Block would rise sharply the instant the hotel reopens.


A Downtown Spokane Development Plan draft released earlier this year said Metropolitan plans to renovate the Metro Block into a creative business incubator that would seek to attract artists, writers, designers, and some high-tech businesses. Metropolitan has acknowledged that its looking at a possible arts-oriented redevelopment of the Metro Block, but it has yet to divulge any details about the possible project.


Similarly, the property that Davenport Sun owns on the block just south of the hotel is just west across Post Street from a piece of land Metropolitan acquired when it bought the former Farm Credit Banks Building. It has been rumored to be considering developing a possible office tower on that site.


Davenport Sun bought the Davenport Hotel in March 1990, but since then has been unable to kick off a full-blown renovation of the historic structure due to financial, environmental, and other obstacles.


Ng says Davenport Sun has a pending agreement with a major hotel chain that would manage operations at the Davenport, and is waiting only for the financing package to be approved before it makes the agreement official. It also has developed a short list of architectural firms and general contractors and will proceed with the selection process once the project financing is secured.


Ng estimated the cost of work yet to be done at between $30 million and $35 million. Davenport Sun said it already has spent about $16 million to buy the hotel and refurbish the lobby and three banquet rooms, which now are used for special events.