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.