February 9, 2008 in Business

Rural shopping center closer

By The Spokesman-Review
 

A proposed 714,000-square-foot shopping center in rural Whitman County has cleared two major hurdles, paving the way for a complex county officials envision as a regional draw.

Boise-based developer Hawkins Companies LLC expects national home-improvement chain Lowe’s will be an anchor tenant for the center, to be located north of state Route 270 just across the border from Moscow, Idaho. Whitman County commissioners last week gave preliminary approval to use as much as $9.1 million in bonds to pay for roads and other infrastructure at the site, and Moscow is dropping its opposition to Hawkins’ requests to tap groundwater.

Commissioners tout the development’s potential economic benefits, including increased tax revenues, part of which would be used to pay back bonds.”We’re going to capture dollars that otherwise would go to more major retail centers like Spokane and Lewiston,” said Michael Largent, board of commissioners chairman. “It will draw from a large portion of this region.”

Some area residents, however, contend it will have detrimental environmental and economic effects.

“The City Council of Moscow traded in a tiny bit of water revenue for a great loss of revenue at the Palouse Mall,” said T.V. Reed, a spokesman for the Pullman Alliance for Responsible Development. “And the Whitman County commissioners gave away 10 years worth of speculative sales and property tax revenue to subsidize a risky private business as the economy enters a recession.”

Moscow city councilors agreed Monday to drop objections to Hawkins’ requests for transfer of water rights and to supply the development with water and sewer service. But the Idaho agency that approves water use still could say sending that water over the border isn’t legal, officials said.

Regardless, Hawkins has secured two rights to use water below the site, which it would relinquish if the development were to connect to Moscow water.

“Two weeks ago, we didn’t have sufficient water to operate a shopping center with,” said Hawkins spokesman Jeff DeVoe. “At least from our perspective, this is a fairly certain project.”

The developer intends to buy the 204-acre parcel from Spokane-based Whitworth University. DeVoe anticipates preparing the site will consume the 2008 building season, and the first stores have a “reasonable” chance of opening in summer 2009.

Citizens in Pullman and Moscow have fought past attempts to build or expand big-box retailer Wal-Mart stores there. Some activists also protested Hawkins’ water requests, voicing concerns about increased draw from aquifers and transferring rights that might be for water in a different aquifer than Hawkins would tap.The draft agreement calls for Hawkins to give the county 1 percent of yearly sales tax and a portion of property tax revenues from the development to pay off the bond. It states company owner Gary Hawkins will guarantee any difference.

Commissioners cite a study by a University of Idaho research economist that found Whitman County was losing an estimated $80 million a year in retail sales to other areas, based on 2005 projections.

Idaho’s Latah County, in contrast, had a net gain of about $66 million, according to researcher Steve Peterson.

“The outflow is amazing,” Peterson said. “Every indicator is that Pullman has a substantially underdeveloped retail trade center.”

Christopher Lupke, also affiliated with the Pullman Alliance for Responsible Development, argued that a Lowe’s would take sales away from hardware stores in Pullman and Moscow, and the county shouldn’t be “subsidizing” development with public dollars.

“People just want to get out of Pullman, or they just want to get out of Moscow,” he said. “That’s not going to change.”

But Peterson asserted big-box stores are “the draw to get customers to come to your town.”

“Rather than hurting Main Street, which is often the perception, they are actually beneficial,” he said.

Moscow Mayor Nancy Chaney said it’s unclear how much retail the region can support.

“I think consumers will probably flock towards something that’s newer or more novel,” Chaney said. “But given the state of the nation’s economy, I think this pending or present recession will also make for some changes that we may not fully be able to predict.”

Site preparation could take six months, DeVoe said. The development might cost $60 million to $100 million, he said.

“We found the right piece of dirt to develop,” DeVoe said. “Real estate is about location, and this was a good location for our core tenant mix.”

Hawkins’ clients range from big-box stores, such as Wal-Mart, Costco and Home Depot, to national banks, grocery stores and fast-food chains. The company says it has completed more than 180 projects in 22 states, totaling more than 8.5 million square feet of retail space.

Hawkins intends to hold the completed center, DeVoe said.

“We want to be owning this shopping center in 25 or 30 years,” DeVoe said. “We want water to be available for our shopping center in the year 2030 as well.”

Under its agreement with the county, Hawkins also would build a new firehouse for a rural fire district.


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