The Cowles Publishing Co. subsidiary that owns the vacant former J.C. Penney building in downtown Spokane filed for Chapter 11 bankruptcy reorganization Friday to free the property up for redevelopment.
CPC Development Co. was one of several named defendants in a July Superior Court jury award of $6.5 million. The bankruptcy filing will release the building for development while the case is appealed, said Steve Rector, chief financial officer of CPC Development.
“It allows us to retain possession of the building until we’re able to resolve the legal issues,” Rector said. “We would have been hamstrung.”
CPC Development Co.’s main asset is the 170,000-square-foot, three-story building at the corner of Main and Lincoln, the company said in a news release. Bankruptcy documents list the value of the building at 809 W. Main as $2.4 million. The company’s principal creditor, with a claim of $6.5 million, is listed as RWR Management Inc.
A Spokane Superior Court awarded that judgment to Bob Robideaux, owner of RWR Management, for work he performed on the development of River Park Square, the downtown mall.
The jury said several companies affiliated with Cowles Publishing Co. should pay Robideaux and his management firm that amount for extra work he did as project coordinator, developer and construction manager of the $117 million mall renovation project. Cowles Publishing Co. also owns The Spokesman-Review, which was not named in the suit.
Reached at home, Robideaux declined to comment, referring questions to his attorney, Robert Dunn, who did not return a call seeking comment late Friday afternoon.
Rector said the bankruptcy filing does not remove CPC Development’s liability. However, it does allow development to move forward until the appeals court rules, which could take more than a year, he said.
“It’s a common business tool that’s used to relieve financial strain,” he said.
Rector said several development concepts for the building are being explored.
“It’s going to be most likely an urban, mixed-use type of project, bringing in both residential and commercial,” he said. “Just in the last six months, we’ve been taking a good hard look at what we can do with that building.”
The most likely scenario, he said, would put retail on the first floor, a blend of retail and condominiums on the second floor, and condominiums alone on the third floor. The basement could be used for underground parking, he said.
Downtown housing has been in strong demand lately, with a recent study showing the downtown core could absorb as many as 300 additional units a year for several years. Developer Ron Wells said recently he has a waiting list of 140 people who have expressed interest in living downtown.