November 15, 2009 in Business

Scaled-back Kendall Yards plans offer better fit for Spokane

Bert Caldwell The Spokesman-Review

Jason Wheaton, President of Greenstone, is framed at a press conference by photos of the Kendall Yards property just northwest of downtown Spokane on Thursday. Greenstone is taking over development of the property from Marshall Chesrown.
(Full-size photo)

Greenstone Corp. last week closed a deal five years in the doing.

And not a moment too soon for Spokane government and business officials weary of economic headwinds.

Greenstone’s acquisition of Kendall Yards revives a project expected to model New Urbanism just across the Monroe Street Bridge from the old.

In 15 years, its 78 acres will be covered with housing clusters, commercial centers and parks within easy walking distance of downtown.

That’s the plan, anyway. But plans go awry, as former owner Marshall Chesrown knows too well.

Chesrown envisioned a $1 billion urban version of the luxury developments he was creating in Idaho when be bought the property in 2004.

A mini-core of high-end shops and residential towers would fill the space between Monroe and Maple streets. More housing – for a total 2,600 units – would extend the project west of Maple.

At a festive groundbreaking, complete with balloons, refreshments and song, officials manned the traditional golden shovels. Chesrown likened the work done and the work ahead to swimming the English Channel. That was May 17, 2007. He did not make it.

The financial tides were turning, inundating upscale developments such as the Yellowstone Club in Montana, the Tamarack Resort in Idaho, and Kendall Yards. After a multimillion-dollar environmental cleanup of the former railroad yard, the bulldozers left. The corner of West Ide Avenue and North Monroe Street at the bridge’s north end has become a shabby parking lot, not a showpiece.

Enter Greenstone. Re-enter, that is, because Greenstone owner Jim Frank attempted to buy what was then called the Summit Property in 2004. He and a partner in Kingfisher Land Holdings LLC purchased a $9 million note on the land with the expectation it would be theirs when the tangled affairs of Metropolitan Mortgage and Securities and subsidiary Western United Life Assurance Co. were sorted out.

Greenstone President Jason Wheaton says the company had already begun working with Met and a Seattle firm on plans for the site, which was still partially buried beneath a basalt-encrusted railroad trestle. Instead, Chesrown stepped in with a $12.8 million bid for the land. As a consolation, Kingfisher flew away with a $2.5 million profit on the note.

Chesrown’s financial problems created a new opportunity, one Greenstone and Frank grabbed by assuming a debt of $20 million, a sum Wheaton says does not represent all Chesrown sank into preparing Kendall Yards. Thanks to the Idaho entrepreneur’s efforts, and a restructuring of the debt, Greenstone will move forward with a more modest project that is still expected to take a decade-plus.

The vision may be less grandiose, but it may be one that better suits the adjacent West Central neighborhood and a city that has difficulty digesting $1 million homes and $500,000 condominiums. It was going to take a horde of “equity refugees” from California to fill those boxes. Many of those potential buyers are now equity inmates trapped in homes they cannot sell.

Wheaton says there may eventually be pricey abodes at Kendall Yards. Greenstone has succeeded because its developments in Liberty Lake and Coeur d’Alene offer homes at all price points, he says. But Spokane-area residents can more easily live with, and in, the $175,000 to $250,000 townhouses that will start going up late next year.

And with many fewer homes, perhaps 1,100, traffic will be much more manageable. A “world class” extension of the Centennial Trail will meld the development with the Spokane River gorge. Construction will bring jobs at a time they are sorely needed.

Mayor Mary Verner was on the mark with her observation: “This project has everything Spokane is looking for.”

Met dithered for decades. Chesrown moved the earth, but could not move the markets.

Greenstone has a reputation for quality projects with a sense of community that are scaled for families. In these worst of times for housing, the company has been able to move forward while others have faltered.

Spokane will be a much richer city if Greenstone can finish the job at Kendall Yards.

14 comments on this story so far. Add yours!

Rifleman__Dodd on November 15 at 10:06 a.m.
Bert, hate to burst your bubble… but for those prices one can go out 5 miles and get 5 acres for the same home.

and so where are the 1100 $75K/year jobs going to come from?

Someone needs to wake up and smell the coffee pot. We ARE in a recession, there are few new jobs and the old ones are going away.

As reported elsewhere in the Spokesman. Greenstone is ponying up $500 MILLION to build 1100 homes.. uh thats like $500K per home.

Now with the city and county budgets in the tank, whose going to pay for streets, sewers, power, water, increased garbage, police, fire, zoning, snow plowing? Uh you and me Joe taxpayer.

Please pull your head out of the wishing well. Wanting something to happen doesnt MAKE it happen.

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JFRENCH on November 15 at 1:44 p.m.
Rifleman…. Don't like it then GET OUT. Your constant complaining about EVERYTHING is so old. Oh, boo hoo, the cops are bad guys, building houses is scary, they didn't pick a boy for a lilac scholarship, waaaa….. There are plenty of places for you to live where you can be up in the mountains somewhere making your own rules and where you won't have to deal with scary cops and daily life.

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Tom Sowa on November 15 at 2:29 p.m.
Rifleman, you should be applauding the demise of old Kendall Yards and the arrival of a revised project as a perfect example of the market taking care of things.

It will decide again, determining whether KY II is timed right and sized right, or not.

If not, there's always KY3. Which if 2 didn't work, will have the benefit of the earlier mistakes made. Over time something will be there, and it's better for developers to shoot high and try to put something great in place (or at least way above-average).

Got a better plan for that site? Miniature golf course and a couple of condos?

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jordanpallen on November 15 at 4:45 p.m.
I was kinda bummed when I found out Spokane would not be receiving the grandiose plan for KY, but I think the GS plan is more feasable. I look forward to it.

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Rifleman__Dodd on November 15 at 4:59 p.m.
JFRENCH seems to be unable to contribute anythingpositive by whining to the blogs. Someone get him a towel and a new diaper (and we know what thats for).

Its also nice to have a resident stalker.. at least HE admits to reading my posts.

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Uptight_Spokanite on November 15 at 7:22 p.m.
Yes “Rifleman” your constant snarky dismissal of everything the S-R reports seems kind of trollish.

http://www.spokesmanreview.com/blogs/…

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westside on November 15 at 8:01 p.m.
Good for Kendal Yards..good for Spokane and….. good for more taxes for city hall!

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Rifleman__Dodd on November 15 at 10:16 p.m.
uh westside the City Council gave the developers a multi-year property tax exemption…. What Taxes?

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Rifleman__Dodd on November 15 at 10:32 p.m.
Uptight_Spokanite it rolls more like this.

http://www.spokesmanreview.com/blogs/…

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SPOKANITE on November 15 at 11:04 p.m.
Uh Rifleman_Dodd That multi-year property tax exemption was only for Kendall Yard's proposed multi-family development. Greenstone's development program appears to propose primarily single family, therefore very little would receive the 8 year tax abatement to which you refer.

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JFRENCH on November 16 at 2:27 a.m.
Uh, Rifleman, it goes like this: You are a moron. It's hard to NOT read your posts because they follow every Spokesman article. Believe me, I have no need or want to stalk you. I'm sure you're living in your mother's basement, pumping out these rediculous theories that no one wants or needs to hear about. If anything, I would say that YOU haven't contributed one positive post to any that I've ever read. It's all about how the cops are so bad or how you're a taxpayer. SO WHAT? I'm a taxpayer too. If you don't like it, move out of Spokane! We like our city the way it is and we don't have any need for some whining pussy that complains about literally everything that happens in the city. Leave or deal with it.

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Rifleman__Dodd on November 16 at 8:38 a.m.
JFRENCH perhaps that “We like our city the way it is” attitude is why Otto Zehm died, the Riverpark Square fiasco occured, the Ms. Savage death off the parking garage,corruption in the Police Department, snow plowing sucks, the economy is bad and the rest of the other problems exist without solution.

I deal with it by volunteering, attending debates and making my voice be heard. All things a good citizen should be doing instead of telling people to deal with it or leave. I believe we can rise above our problems unlike others who want to wallow in them.

BTW my mom is a Gold Star Widow, 84 and could kick your butt from her wheelchair, and she's the Bingo Queen in her retirement home. I can set up a death cage match with her if you want.

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Mr. Natural on November 16 at 3:40 p.m.
Seeing is believing. This is prime property but still seems vague on a sustainable environment without certain commercial aspects such as a good downtown marketplace. Also I think there will be surprises in the realm of relic contamination. Wouldn’t want any old railroad vapors seeping into residences would we…All in all it has to be developed and by developing it into a residential neighborhood it brings a needed influx of people to Spokane…I do hope this all works out for the best for everyone.

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johnsantana on November 16 at 11:07 p.m.
Rifleman, you should muffle your musket because you don't know what you are talking about. Sure you can go 5 miles out and and buy a place for the same price on 5 acres. My guess is that must be your preference. However, some people value walking distance to downtown greater than 5 miles out on 5 acres. Its a different category of buyers. Some people value walkability more than the size of the site. Two different categories of buyers.

Where are the 1,100 jobs paying $75,000/yr going to come from? I think you probably meant, where are the 1,100 households earning $75,000/yr going to come from. It only takes a couple earning $37,500 each to be a $75,000/yr household. Teachers and nurses make that or more. Firefighters and cops can make that much themselves. A very large segment of the households earn $75,000 or more. We are not talking luxory housing when speaking of $175K to $250K price point.

Finally, your math figuring $500,000,000 outlay and 1,100 homes might be close for you to figure it is close to $500,000 per home. However, you fail to account for the fact that this project involves commercial development with offices and retail. There are no smoke and mirrors with Berts reporting on this. Your contrary analysis just lacks basic facts.

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