Nordstrom Staying Downtown Agreement Means $80 Million Revitalization Project Will Proceed

Downtown Spokane breathed a sigh of relief Thursday when Nordstrom announced - after months of negotiations - that it would remain in River Park Square.

With a letter of intent from Nordstrom in hand, Citizens Realty Co. and Lincoln Investments Co. will proceed with a proposed $80 million redevelopment plan for River Park Square, officials said. Citizens and Lincoln are affiliates of Cowles Publishing Co., which publishes The Spokesman-Review.

The proposed shopping center, anchored by Nordstrom, would stretch from Lincoln to Wall and include an atrium over Post Street and expanded parking facilities. The developers also hope to attract numerous national retailers and a 20-theater cinema, said Betsy Cowles, president of both Citizens and Lincoln.

Nordstrom’s target opening date is March 1999.

Susan Durrie, co-owner of The Children’s Corner Bookshop, a River Park Square store, literally danced down the aisles of her store with excitement when she heard the news.

“I couldn’t imagine it not happening. I think it’s wonderful,” Durrie said. “I think it demonstrates that we will not abandon this downtown. It has to do with more than this business. It has to do with this city and its culture.”

City officials heralded the agreement with Nordstrom as a saving grace for Spokane - one that will create 2,800 jobs, $50 million in wages, $2.5 million annually for the city’s general fund and more than $360,000 every year for Spokane’s schools.

If this project had not gone forward, many city officials and retailers worried that downtown Spokane retailers would have continued to pack up and leave.

“It would’ve been a domino effect,” said Rich Hadley, president of the Spokane Area Chamber of Commerce. “It would’ve been real hard to keep retail downtown.”

Although the agreement with Nordstrom removes a cloud that has hung over downtown for months, much work remains to be done before the River Park Square project reaches fruition.

The developers need to finalize financing, attract other national retailers, relocate utilities on Post Street and proceed with negotiations with the city of Spokane on financing of a parking garage.

Cowles does not expect resolution of those issues before the summer.

Although Cowles would not say precisely what Nordstrom required before signing a letter of intent, she said obtaining lease agreements from other national retailers was crucial. Some retailers have agreed to come to Spokane if Nordstrom stays, she said.

The first phase of the project will be to demolish the west end of River Park Square, except for the parking garage. That’s where the new 130,000-square-foot, three-floor Nordstrom store will be built. The new Nordstrom would not occupy the whole block.

At a press conference on Thursday, a huge white banner was unraveled from the top of the now-vacant building at the corner of Lincoln and Main, proclaiming it to be the future home of Nordstrom.

“This is the news we’ve all been waiting for,” said Mayor Jack Geraghty, who added that the investment by the Cowles family was the largest in any project since Expo in 1974. “The key is the investment, quite frankly, by the Cowles family in downtown Spokane,” he said.

Though Betsy Cowles would not say how much her family contributed to the project, private investment is listed as totaling $45 million.

Another $23.8 million will come from a federal Housing and Urban Development loan, which will be repaid by private dollars. An economic development initiative grant also from HUD tied to the creation of jobs will contribute another $1 million. Because Nordstrom’s rent will not cover the debt, other local property owners have agreed to help pay off the HUD loan over a 20-year period, Cowles said.

Demolition on River Park Square’s west wing will not begin before January 1997, both to allow time to resolve the other issues and to prevent construction from interrupting the crucial Christmas shopping season, when some retailers earn up to 50 percent of their annual sales.

Nordstrom’s decision was cause for celebration among River Park Square’s other retailers, many of whom have grown increasingly concerned about their futures.

“Happy,” “ecstatic” and “exuberant” is how Penny Corwin, manager of Super Color One Hour Photo, described her mood after hearing the announcement from Cowles and property manager Bob Robideaux at a special meeting for tenants Thursday morning.

“We’ve been waiting for this announcement,” Corwin said. “The whole downtown has been holding its breath on this one.”

Cowles said River Park Square is “working on options” for Eddie Bauer and Anderson and Emami, the two retailers remaining in the block that is due for demolition.

Noticeably absent from Thursday’s festivities was downtown’s other major anchor, The Bon Marche. When the River Park Square redevelopment project began two years ago, Nordstrom’s said it would not stay without The Bon.

In July, however, The Bon announced that it would anchor the proposed Spokane Valley Mall, effectively taking itself out of talks with River Park Square developers. Negotiations also are continuing between The Bon and Sabey Corp., owner of NorthTown Mall, about an expansion of its store there.

This move by Nordstrom doesn’t change anything regarding The Bon’s downtown location, said Gary Yiatchos, senior vice president of marketing for the Seattle-based retailer.

“It’s really premature to make any decisions about how long we would remain downtown,” Yiatchos said. “The issue will continue of what’s the viability of having three stores in that marketplace.”

, DataTimes ILLUSTRATION: 2 photos (1 color) Map of area.