A developing story

To some developers, it may seem like a field of dreams. The 5-acre piece of land is just seconds from downtown Spokane, in the heart of the blossoming University District, with a supply of staff and students to shop in stores and restaurants or live in any housing that may be built. Last month, Washington State University-Spokane put out a request for proposals to develop land stretching southeast from the intersection of Pine Street and East Spokane Falls Boulevard, directly across from the Riverpoint Campus.

The request calls for a private company to develop the land under a 55-year ground lease. The only use WSU bars outright is constructing condominiums for sale. Among the conditions is one allowing WSU to buy any project improvements — developer-speak for buildings, parking lots and the like — at a fair market value price after 20 years, and every five years thereafter.

Initial proposals are due Dec. 22, with awarding of the bid slated for March.

“We’re hoping to see someone that recognizes housing, the retail opportunity to serve the neighborhood and the campus, and if there are some other activities like clinics or workout facilities that might relate to (WSU’s) nursing program,” so much the better, said Gerald Schlatter, WSU’s executive director of capital planning and development. Schlatter said WSU has been working on this project for two years and has talked to numerous potential users.

“Who knows what’s going to happen?” he asked. “It’s an evolution.”

The parties eyeing the property include, but are not limited to:

“ The YMCA and YWCA, which recently announced plans to sell their downtown Spokane buildings and construct new facilities on a jointly shared campus near downtown;

“ American Campus Communities, a publicly traded company and national builder of student housing with $367 million in assets, including 18 on- and off-campus residential properties connected to universities in states including Texas, New York and Colorado;

“ The Phoenix Project, a collection of Spokane businesspeople and citizens connected by a desire to see the city develop a thriving public market along the lines of the Pike Place Market in Seattle, and create low-rent space for promising young businesses, possibly to include artists, recording studios, radio stations, production studios and software and technology firms.

“There’s going to be a lot of growth with Eastern (Washington University) and WSU and the Riverpoint campus. There’s a lot of potential in that part of town,” said Mike Craven, development manager for SRM Development, a Spokane company also preparing a proposal for the land.

Craven declined to disclose details of his company’s proposal, but said it would most likely incorporate a mix of uses, as WSU has requested. Craven also said he thinks the element that section of town most lacks is housing.

The centerpiece of the property — most visible to drivers passing by on Spokane Falls Boulevard just east of Division — is the six-story, 120,000-square-foot Jensen-Byrd building, built in 1909. While Craven said his firm would most likely tear down the building and the property’s other smaller structures if it were to win the bid, the Phoenix Group sees the building as perfect for a public market and the kind of low-rent space it’s seeking for a business incubator.

The property is made up of three parcels, stretching east from Pine Street between Spokane Falls Boulevard and Main Street. The property fronting Spokane Falls Boulevard is 45,000 square feet and contains two small buildings with one operating business. The middle parcel spans 105,000 square feet of land and contains the Jensen-Byrd building and three additional structures, comprising 180,000 square feet of storage and warehouse space. The parcel to the south is 64,000 square feet of undeveloped land that would front Riverside Avenue if that street were to be extended east, as has been planned.

YMCA President and CEO Rig Riggins said he’d “love to” use the property as the new joint campus for his organization and the YWCA. However, he said it’s unlikely under the current terms of WSU’s request for proposals. The YMCA has been around for 120 years, so a 55-year ground lease doesn’t sound like a long time, Riggins said. The clause that allows WSU to buy back any property improvements after 20 years also gives him pause.

Both the YMCA and WSU see a lot of compatible uses that could be developed between the nonprofit organizations and the university. For example, the YMCA and YWCA’s offerings could complement university programs and research in nursing, exercise science, physical therapy and other areas, according to a document WSU drafted to explore the possibilities. The YMCA and YWCA’s facilities would offer exercise and recreation opportunities for university staff and students. And they would offer students opportunities for internships, employment and access to sample populations for research.

“We would love to be there but I don’t know that we’re going to be able to and we certainly can’t do it under the RFP that exists,” Riggins said, adding that he hopes the request for proposals will be re-drafted in such a way that would work for the nonprofit organizations. “It fits on a lot of levels, but right now it feels like a square peg in a round hole for us.”

When asked if the RFP may be redrafted, Schlatter declined to comment. He did, however, say he was comfortable with the schedule, which calls for a developer to be selected by March.

National student housing builder American Campus Communities also is “in the process of evaluating” whether it will submit a bid, according to an official with the publicly traded company. By the end of 2004, the company owned 18 student housing properties comprising 13,000 beds and 4,300 apartment units, according to its annual report.

The Austin, Texas-based company has built properties to serve universities including Arizona State, Virginia Polytechnic, the University of Georgia-Athens, Texas A&M, the University of Colorado-Boulder, California State universities at Fresno and San Bernardino and the State University of New York at Buffalo.

The properties have an average occupancy rates above 90 percent and bring in average revenues of about $450 per bed, per month, the annual report said.

A statement on American Campus Communities’ Web site states: “Student housing is all we do.” However, Schlatter doesn’t see the property being restricted entirely to housing, he said.

“I don’t see it all just being housing. I don’t at all,” Schlatter said of the property. “There’s just too much opportunity there to develop something of a larger scale.”

Hearing that should make Chris Kelly happy.

Kelly, a co-founder of the Entrepreneurs Forum of the Great Northwest, is the driving force behind the Phoenix Project, envisioned as a thriving public market on the ground floor of the Jensen-Byrd building with something like a small Silicon Valley on the floors above. He imagines offering space to promising start-up businesses in the technology field, which would benefit from proximity to accountants, attorneys and other professionals located in the building.

He sees the Phoenix Project as having the ability to drive momentum and vitality in Spokane’s University District by locating “in a single location all the elements needed for creativity to thrive,” his 72-page proposal says.

Kelly, a writer and consultant, said Spokane badly needs a project like this to spur innovation and create more start-up businesses. With four times Spokane County’s population, King County produces eight times as many technology start-ups, Kelly noted in his proposal.

“We need to make a proactive effort to jump start new-business creation, not only in technology, but in all sectors of our regional economy,” Kelly wrote, saying The Phoenix Project could provide the solution, if it could win the bid to lease WSU’s property.