Consultants: Valley may need to scale down city center plan

After more than a year of work and a half-million dollars in studies, a new report indicates retail demand for a city center in the Valley’s historic heart may be as hollow as the decaying buildings that would be torn down to build it.

“The proposed subject site would be seen as a third or fourth choice by many leading retailers seeking to open just one unit in the region,” wrote consultant Bob Gibbs, of Gibbs Planning Group.

The city hired Gibbs to look at the viability of a dense shopping, housing and office development near the University City Mall aided by publicly funded improvements that could include a new library and city hall.

“Although these studies should not be considered conclusive, they all indicate that the Spokane Valley region presently has an oversupply of 2 (million) to 4.7 million square feet of retail inventory given its present retail demand,” Gibbs wrote of his research.

With so many high-traffic locales for retailers to set up shop, such as downtown Spokane, the Spokane Valley Mall and other sites along the freeway, Gibbs indicated the city center may be unlikely to attract the kind of stores needed to anchor a center of the size envisioned.

A scaled-down neighborhood center or a city center that offers a “market niche” not present in the area could be feasible, Gibbs wrote, though City Council members were unclear on what that niche might look like.

“This could be a killer for the project,” Councilman Rich Munson said June 19 at a council meeting.

Last year the city hired a team of land use, transportation and economic development experts to lay out a plan intended to transform Sprague Avenue from nine miles of cinder block and parking lots into a sustainable business corridor with housing, mixed-use development and strict aesthetic standards.

Urban designer Michael Freedman, who led that team, also presented the council with three ways it could make a downtown, one of the city’s goals since incorporation. The option with the highest likelihood for success, which the council tentatively chose to pursue, is to gain control of about 21 acres east of University Road and south of Sprague and then select a developer to build it with the city footing the bill for the project’s infrastructure.

Initial research by economists at ECONorthwest, also part of that team effort, supported the center as a commercially viable project. But they, as well as Gibbs and ClearPath consulting, which was hired to negotiate with land owners, raise serious questions for the council to answer before it moves forward. “There really was a disconnect among the three reports on what’s going to go in there, and we need to get that resolved,” Munson said.

In one regard, all three consulting firms’ analysis were unanimous: A downtown won’t happen without leadership from the city.

If Spokane Valley takes the most aggressive approach and secures the land before soliciting bids from national developers, ClearPath estimated a purchase option could cost between $550,000 and $1 million for one year while buying the land outright would cost between $5.5 million and $9.3 million.

“I’m kind of cautious about that approach,” Wilhite said. “I’d rather use someone else’s money.”

Freedman, the urban designer, gave the city two other options that are less risky – but also have less chance of working.

The city could place the special regulations and zoning for a city center on the land and wait for someone to develop it. Or, the city could put the rules in place and build the streets and a city hall, then let the rest of the center fill out on its own – an option favored by Wilhite.

How the city will approach the project is just one of the decisions the council must work out in the next few months.

U-City Mall owner Jim Magnuson – whose family also owns about half of the property where the city wants to build the center east of University – told consultants he’s not interested in selling his land.

“Mr. Magnuson wishes to participate directly with the city and have the development take place on his land west of University,” the ClearPath report said.

Said Wilhite, “I guess I’d want to hear what his definition of co-development is.”

Also in question is ownership of a former railroad bed south of the proposed city center property that could extend Appleway Boulevard east.

Spokane Valley recently lost a lawsuit in which it claimed that the right of way transferred from county ownership to the city after incorporation. The City Council has voted to appeal.

Plans to turn Appleway and Sprague into two-way streets from their current couplet also are likely to be contentious. Outside Spokane Valley, competition from other mixed-use projects might affect the city center.

For instance, consultants indicated Spokane Valley might attract retailers by offering the first town-center type development in the area, which typically feature freestanding retail stores and pedestrian-oriented layouts.

Liberty Lake has plans for two such centers.

Many of the variables surrounding Spokane Valley’s center will have to be resolved by September. By then the Spokane County Library District will need to know for sure where to build a replacement for the Spokane Valley Library.

The library “must be a part of this program,” Mike Ragsdale of ClearPath told the council recently.

Like many things affecting the fate of the city center, though, building the new library ultimately will be up to voters. A $30 million levy for the new Spokane Valley Library and a branch library in Greenacres will be on the ballot in March.

The council also decided recently to hold an advisory vote on a city center concept.

ClearPath consultants wrote that public and political support for the project was crucial to its success.

“There was some concern that community members who have not previously participated in this project, may in the future, become politically active and stall progress,” the consultants’ report said.

Additionally, “support could waiver once actual costs and the finalized plan are known,” the report said.

Although the city has money set aside in a civic building reserve fund, more will be needed. Whether it comes in the form of bonds, tax-increment financing or another mechanism, paying for the city center is likely to receive an abundance of public scrutiny in the historically conservative Spokane Valley.

In the meantime, city planners have proposed spending $149,000 more on services from consultants as the plan moves forward.

The council approved some additional consulting funds at its June 19 meeting. And despite questions that will have to be answered about the project, council members remain enthusiastic about the concept of having a city center.

“You can study things to death and you’re never going to have all the questions answered totally,” Wilhite said.

“If we’re going to do it, let’s just do it.”