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Developer seeks court property

Fri., March 31, 2006

The developer of the Kendall Yards mixed-use project along the Spokane River has drawn a bull’s-eye on a squat one-story building at 500 N. Cedar, just west of downtown Spokane.

Developer Marshall Chesrown would like to buy the building and tear it down to expand the boundaries of his project, said Kendall Yards project manager Tom Reese. But its present owner, the State of Washington, won’t move quickly in selling the land, the home of Spokane’s Court of Appeals Division III.

Chesrown’s 77-acre project already contains land on both sides of the court’s one-acre site. The appeals court property would be converted to commercial or residential use if the state agrees to sell it, Reese said. In exchange, Chesrown proposes to construct a new building for the court on land he owns nearby.

After one early discussion of a possible sale, state court officials say they’re in a good position relative to a would-be buyer.

“We’re not the ones who are looking to move,” said Ken Kato, chief judge of the Spokane division of the Court of Appeals. “It’s not often in poker, much less in business, when you hold all of the cards.”

Reese said the court building, which has been remodeled at least twice since the state acquired it in the 1970s, would most likely be torn down to make way for future development. “It’s a single-level building and that isn’t the highest and best use for that site,” said Reese.

Kato said the developer from this point on will negotiate a possible sale with the state’s General Administration real estate services office. Kato could not guess how much the land and building are worth.

Kato added it is probably the only property owned by a state court in Washington.

Reese said an initial offer was made to relocate the court to land owned by Chesrown north of the current building. That undeveloped site, near College Avenue and Cedar Street, would be just east of a power substation owned by Avista Corp., Reese said.

Kato said the state declined that offer. “One thing we don’t want to do is be next to a substation,” Kato said. “I don’t want to snap, crackle and pop.”

Reese said the next step will be a formal proposal for a swap with several relocation sites to be considered by the state.

Chesrown’s company has also begun discussions with Spokane County officials for possible purchase of the Public Health Center, which is also adjacent the Kendall Yards project but east of the court site.

Chesrown, who also developed the Club at Black Rock project in North Idaho, bought the 77 acres for Kendall Yards from Summit Properties, a unit of Metropolitan Mortgage & Securities Co., following that company’s bankruptcy filing.

The Kendall Yards project, according to initial plans, would create a combined residential and commercial neighborhood connecting the West Central area, the Spokane River Gorge and downtown Spokane.

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