Top business stories for Spokane area in 2021

This year brought a slight sense of normalcy in the Spokane region as businesses were allowed to fully resume operations when the state reopened in June.

In 2021, headlines shifted from restrictions and uncertainty to land-and-building transactions, retirements, new developments and expansions, and a booming housing and rental market.

Here are some of the top business stories that dominated headlines in 2021:

The Davenport Hotels sells for more than $200 million

Several properties and businesses changed hands this year, but one of the largest transactions occurred this month when developers and hoteliers Walt and Karen Worthy sold The Davenport Hotels to Denver-based private capital firm KSL Partners for more than $200 million, according to Spokane County Recorder’s Office records.

Spokane County Assessor Tom Konis told The Spokesman-Review the sale price of Worthy’s five hotels and the parking garage west of the Davenport Tower was nearly double the properties’ assessed value for the 2022 tax year. NAI Black CEO and principal Dave Black, who was not involved in The Davenport Hotels sale, said the transaction could be the “biggest deal ever to go down in Spokane.”

In addition to The Davenport Hotels, several other notable downtown buildings changed hands this year, including the historic Bennett Block building, which the Hieber family sold to a group of investors for $6 million in September. That same month, Sweeto Burrito franchisee Scott Isaak purchased the historic Peyton building for $11.4 million.

Amazon continues region expansion

A year after opening its West Plains fulfillment center, Amazon continued its expansion in the region in 2021, making it one of Spokane County’s largest employers.

Amazon opened its 1.3-million-square-foot Spokane Valley fulfillment center in September at 18007 E. Garland Ave., where it fulfills orders for larger items, including patio furniture, bulk paper items and outdoor sports equipment. The Spokane Valley fulfillment center created 1,000 new jobs, according to Amazon.

Amazon also launched air cargo operations at Spokane International Airport in October, making it the second facility of its kind in the state. Amazon is also planning to open a delivery station and sortation center adjacent to its West Plains fulfillment center in 2022.

Leadership changes

Leadership changes at local companies occurred this year with several CEOs choosing to retire, ending careers that spanned decades.

Bernardo|Wills Architects co-founder Bob Wills announced his retirement from the firm in June. A significant part of Wills’ career involved designing several projects at Fairchild Air Force Base.

Rosauers Supermarkets CEO Jeff Philipps retired in August after 21 years of leading the grocery chain, which expanded into six new markets, implemented online grocery shopping and grew sales to nearly $600 million.

Some other retirements this year included Spokane County United Way president and CEO Tim Henkel, Sharp Shooting Indoor Range & Gun Shop owner Robin Ball and Kiemle Hagood board chairman and co-owner Tom Quigley.

State approval for sports betting

The Kalispel and Spokane tribes were granted state approval in September to allow sports betting at their casinos.

Sports wagering approval brought expansions to both Northern Quest Resort & Casino, which unveiled opened the 2,300-square-foot Turf Club Sports Book earlier this month.

The Spokane Tribe completed an expansion in November that added 20,000 square feet of additional gaming space, including a larger nonsmoking gaming room, new restaurant and sportsbook.

Red-hot real estate market

The Spokane region’s red-hot real estate market continued to heat up with rising prices, low inventory, high demand and multiple offers persisting throughout the year.

The region’s median closing price for the first time hit a record-breaking $395,000 in July as out-of-area buyers and remote workers relocated to the Lilac City, a trend accelerated by the pandemic.

Since then, the county’s median housing price dipped to $375,000 in November, but experts predict the housing boom will continue into 2022, although market activity is not expected to be as brisk as this year.

The region’s real estate boom spilled into the rental market as Spokane-area rents rose swiftly this year. Spokane led the nation in rent growth at 8.1% in June. Tenants grappled with affordability and some reported double-digit rent increases. Since then, rents began to stabilize and prices fell 3.1% from October to November.

Median rents in Spokane in November were $990 for a 1-bedroom unit and $1,361 for a 2-bedroom unit, according to rental listing site Apartment List. December data has not yet been released.

Lumber prices spike during recovery

The same time that the Spokane area had its historic-home boom, builders were saddled with the highest lumber prices in history. Early in 2021, builder advocates said the prices added more than $24,000 to the cost of the average new home.

Joel White, executive director of the Spokane Home Builders Association, said contractors were paying about $365 per 1,000-board-feet of framing lumber in April, 2020.

But in 2021, in the middle of a housing boom, contractors are paying more than $1,000 per 1,000-board-feet, White said.

“It’s absurd what is going on,” White said. “It’s a supply-side issue. We don’t have enough lumber to meet the demand.”

Spokane County recovers jobs

Spokane County’s unemployment rate hit 3.5% in October, matching a record previously set in October 1997, according to data from the Washington State Employment Security Department. The county’s unemployment rate in October has since been adjusted to 3.8%, which held steady in November.

Despite labor shortages in the hospitality and food service sectors, Spokane’s job growth has been buoyed by essential businesses and its position as a regional hub, Doug Tweedy, a regional economist with the ESD, told The Spokesman-Review in October.

Spokane County has mostly recovered job losses as a result of the pandemic, but future employment growth will be dependent upon a continuing influx of new residents, Grant Forsyth, Avista Corp.’s chief economist said at an economic forecast last month.

Car prices drive higher

The economy’s quick recovery from the coronavirus pandemic caused a major rift in the market for automobiles.

Several car makers stopped building cars betting that buyers would not be willing to spend on high-ticket items during a recession.

As a result, the lack of supply drove new car prices and used car prices to all-time highs.

Gus Johnson Ford, which sold in October to Corwin Automotive Group, would generally have about 150-to-200 new vehicles on its lot. But in July 2021, the car lot had mostly empty spaces.

“I’ve never seen anything like it before,” said Jason Moran, used car manager at Gus Johnson, 8300 E. Sprague Ave. “If you would have told me anytime that we would be out of new cars, I would have laughed at you.”

Longtime businesses closeThe pandemic forced closure of several Spokane-area businesses. In June, construction startup Katerra Inc. shuttered its Spokane Valley plant and laid off more than 60 employees.

Vancouver, Canada-based pulp and forest products company Mercer International Inc. purchased the former Katerra plant for $50 million in August.

Jim’s HomeBrew Supply, which claimed it was one of the oldest operating brewing shops in the country, closed in September after more than 70 years of operation.

Other closures included Charley’s Grill & Spirits, Lantern Tap House, Wolffy’s Hamburgers, Amy’s Donuts, Spa Paradiso and Fleur de Sel.