The Buchanan Building in downtown Spokane will become the new home of Limelyte Technology Group, thanks to an innovative partnership between Limelyte’s CEO and a Spokane City Council member.
Councilman Steve Salvatori, who owns two other commercial buildings downtown, recently bought the Buchanan for $200,000. The building at 28 W. Third Ave. was used as a funeral home for much of the 20th century.
Limelyte Technology has been renting office space from Salvatori since 2011 but has run out of space, company CEO Rob Martinson said.
Looking for options, Martinson found an ad listing the Buchanan for sale. He approached Salvatori, asking if he would consider buying it.
“I told Rob that I needed another commercial building like a hole in the head,” Salvatori said.
But after a few days of reviewing options, they hit on a shared-management, shared-benefit plan: Salvatori will own the building, but Martinson will become its unofficial manager.
Martinson’s task will be to find other tenants for the building. When he recruits a tenant, the rent paid by that person or company is applied to the rent Limelyte owes to Salvatori. When the total of new rents surpasses Limelyte’s monthly rent, Salvatori and Martinson will split the money 50-50.
Martinson has the option of buying out Salvatori if he decides to get out of the deal. The net appreciation of the building would be divided between them.
“I just love this building,” Martinson said while visiting the Buchanan, which was built in 1911. “I love brick buildings and ones with character. This place will be great for us.”
Salvatori added: “Basically, Rob and I treat this as 50-50 partners, with both of us looking out for each other. We both know the wiser investments in the building we make, the greater chance we have of sharing future appreciation.”
Martinson will move Limelyte Technology into the building around June 1.
The company has signed a three-year lease and will occupy about half of the main floor.
The Buchanan has been on Spokane’s Register of Historic Places for more than 15 years, and Salvatori hopes to get it approved for the National Register of Historic Places.
An upstairs loft is being converted into office space. In addition to half the main floor being available, the Buchanan’s basement has nine rooms designed for one- or two-person offices.
Like Salvatori’s other downtown properties, the Buchanan gives tenants month-to-month rents with rates ranging from $1 to $2 per square foot.
Even if few new tenants move in, Martinson said he expects Limelyte will stay and use the space to continue growing.
Much of Limelyte’s work is database development. Customers include companies that run background screening for landlords or employers.
In its first decades, the Buchanan was a mortuary operated by James D. Buchanan, who remained there until 1924, when the Hennessey and Calloway funeral home took it over. It’s been partly modified and used by different businesses, but it’s been vacant for several years. It sits next to open space at the corner of Third Avenue and Division Street that once was envisioned as a hotel project.
“This area is a great location, with lots of traffic,” Salvatori said. “I hope our little project will help make the entire block more exciting and appealing as the economy recovers.”