A venerable home builder is bringing new hope to a stalled downtown Spokane development project.
Greenstone Corp. has purchased the Kendall Yards property with plans to build a waterfront neighborhood affordable to downtown workers yet still attuned to the ambitious mixed-use community envisioned by seller Marshall Chesrown.
By reducing the scope of the upscale project and dropping the price of new homes, Greenstone is betting that it can complete the struggling project on the north bank of the Spokane River – an accomplishment that has eluded developers for years.
The number of housing units will drop from about 2,500 to fewer than 1,000. And the focus will be mostly on wood-frame construction, including many townhouses, rather than numerous pricey steel-and-glass high rises, Greenstone President Jason Wheaton said.
Within two years Greenstone plans to have perhaps 60 to 80 housing units available in the $175,000 to $250,000 range. The average price under the previous plans was $400,000 to $500,000.
Wheaton said housing options will include single-family homes, urban lofts, condominiums and apartments. There may be a residential tower eight to 10 stories tall.
The architecture, Wheaton said, will include modern and historical features. Homes will be built with energy efficiency as a priority.
The project’s commercial building space will be cut to about 600,000 square feet from 1 million.
Controlled by Jim Frank, Greenstone is the largest home builder in the Inland Northwest and is perhaps best known for its extensive work on Liberty Lake developments.
The terms of the purchase were not disclosed, though Greenstone acknowledged it is restructuring about $20 million of debt associated with the project.
Washington Trust Bank is providing the financing.
Kendall Yards construction is expected to be ongoing for the next 10 to 15 years.
Chesrown was unavailable for comment Wednesday. He said in a prepared statement: “We are very pleased that Greenstone has committed to develop the property and carry the Kendall Yards vision forward.”
Another major change to the project will be park planning. Greenstone will ask the city of Spokane to abandon Ohio Avenue so the Centennial Trail corridor can be turned into a greenway park open to bicyclists and walkers, akin to Riverfront Park.
“We’re really excited about extending the park, and we think the community will be, too,” Wheaton said.
Brenda Corbett, chairwoman of the West Central Neighborhood Council, said Greenstone’s plans would be good for the area.
She said fewer, more-affordable housing options would be well received, along with a continued commitment to find suitable retailers for the area. The neighborhood hopes for an affordable grocery, hardware store and day care, she said.
“We need these things,” Corbett said. “And we need to have all different ranges of income in here to make this a truly mixed and healthy neighborhood.”
She said the neighborhood council and Greenstone have been meeting for a couple of months. Neighbors will like the idea of less traffic congestion than initially feared and having working-class housing, she said.
“We’re hopeful that this is the one that gets done,” Corbett said.
The Kendall Yards project has been embraced by city leaders and the business community. Under Chesrown’s company, River Front Properties LLC, the land has undergone a massive, multimillion-dollar pollution cleanup stemming from its use as a railroad refueling depot.
More than 223,000 tons of contaminated soil have been removed from the 78-acre site. The cleanup was partly financed with federal grants and low-interest loans and is ready for builders.
Yet legal issues remain in play. The Union Pacific Railroad has initiated legal action against River Front Properties because of fears that it may be on the hook to refund Chesrown for some of the cleanup costs. The railroad claims indemnity from an $8 million demand by Chesrown, citing its sale of the land 19 years ago to Metropolitan Mortgage & Securities Co.
When Metropolitan Mortgage failed in 2004, Chesrown scooped up the property at a bankruptcy auction for $12.8 million. He then began his ambitious development project with plenty of fanfare.
The housing market collapse, however, took its toll. And high-end homebuilders have buckled under the weight of the credit crunch. Chesrown’s Black Rock North development is the subject of a bank foreclosure action, and little has happened at Kendall Yards in many months.
Wheaton said Greenstone has been weathering the recession by offering a broad range of houses and prices. “It’s worked for us in this tough economy,” he said.
Greenstone is a partner with Centennial Properties Inc. in RiverCrossing LLC, a development project in Liberty Lake. Centennial Properties is a real estate subsidiary of Cowles Co., which also owns The Spokesman-Review.