December 25, 2005 in Business

Bert Caldwell: Chesrown’s plans shoot for the stars

Bert Caldwell The Spokesman-Review
 
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Marshall Chesrown says he sold his Denver automotive empire in 1997 thinking business could not possibly get any better. If the buyers wanted to pay more than the business was worth, well, that was a deal no car salesman could walk away from. So he sold, returned to the Inland Northwest, and began to build a real estate empire.

Meanwhile, back in Denver, the car business got better and better and better.

So can business in Spokane, says Chesrown, and his Kendall Yards project is just the thing to infuse the city’s treasury with new tax revenues, and downtown restaurants and retailers with cash fresh from the pockets of transplanted Californians.

“There’s a whole lot of things already happening,” he notes, citing the Convention Center expansion and several condominium conversions. Chesrown says he wants to piggyback Kendall Yards on those developments, just as he leveraged Coeur d’Alene-area renewal fostered by Duane Hagadone into sales at The Club at Black Rock, the golf and residential development whose success has far exceeded local expectations.

The people buying hideaways in North Idaho are often the same people who have become the army of the New Urbanism, the return to urban core areas by retirees and baby boomers who want the amenities of a downtown. Chesrown says Kendall Yards can provide those newly fashionable urban spaces on a scale Spokane so far has not been able to offer. In fact, the development on the north bank of the Spokane River could provide them on a scale possible in no other space so close to a downtown anywhere.

With 1.5 miles of riverfront, he says, “the uniqueness of this space is second to none.” He likened the potential to the prosperity realized by projects in Denver, San Diego, even New York City’s mammoth Battery Park City.

Chesrown dismisses those who doubt a mixed-use development like Kendall Yards will work in Spokane. If you’ve never offered anything but single-family homes in a suburban grid, how would you know, he asks.

But Spokane will not be able to fully exploit the opportunity unless city officials abandon some standards used to judge the impacts of new development, particularly traffic, Chesrown says. Traffic managers, for example, assume a single-family residence will generate X number of trips per day. That’s not the case with a development designed to put every amenity possible within walking distance, or a short bus ride, he says.

Agreeing with city traffic engineers on a more appropriate formula, using the experience of other urban developments as a yardstick, will be critical. Chesrown says he needs a traffic light-controlled intersection at the north end of the Monroe Street Bridge to provide access to the east end of Kendall Yards, as well as new ramps that would allow drivers to access Maple Street from Broadway. His traffic engineers have studied how in-bound and out-bound Kendall Yards traffic will affect flows as far away as Interstate 90.

All that research will be included in the material Chesrown submits next month, when he seeks city approval of a new planned-unit development encompassing the Kendall Yards tract. He’d like final action by the City Council sometime next spring.

“I have a personality, I want things done yesterday,” says Chesrown, who has put the project on a fast track since snatching the property out of the Metropolitan Mortgage & Securities Co. bankruptcy. The $12.8 million purchase closed last Jan. 12. Four months later, a brownfields cleanup was underway at the former railroad yard. That phase of the project — the largest of its kind in the country — is nearly complete.

The faster he can get the city’s blessing, the sooner Kendall Yards can be fully built out, Chesrown says. Although convinced the trend towards urban living will persist, he’s less certain how long would-be residents now in other areas have to get the maximum equity out of their present homes before markets in places like Southern California soften, and delay planned retirements. Best case, the Yards fills up in eight years. Worse case, it takes 20. This on a property that has been barren for 50 years.

Many buyers will be local, he adds.

Chesrown says he could proceed using a 1992 PUD as his blueprint, but that document and its heavier reliance on commercial development no longer represents the best use of the property. It relates less well, if at all, to the West Central neighborhood to the north, and does not exploit an asset like the Centennial Trail.

Kendall Yards is “a lifestyle sell,” he says, with the unique combination of handy proximity to downtown Spokane as well as the river, which will soon have a whitewater park almost in the development’s front yard. You won’t see that in Manhattan.

Like another dynamo, Davenport Hotel co-owner Walt Worthy, Chesrown is pressing ahead with a “Damn the torpedoes!” attitude welcome after years of inaction by Metropolitan. His project will bump into more obstacles in urban Spokane than in rural Kootenai County, but that’s to be expected. Aside from possible traffic issues, the only downside to Kendall Yards is the long, sunny slope down to the river.

It makes a lot more sense to put 2,000-plus new households at the end of a one-mile walk rather than a 20-mile commute.


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