Spokane developer and historic preservationist Ron Wells said he has a verbal agreement to pay $5.3 million for most of a downtown city block, including two historic buildings that have been scheduled for demolition.
Property owner Wendell Reugh has threatened to tear down the 1934 Rookery Building and the 1915 Mohawk Building if no buyer stepped forward. Several deals have been proposed over the past three years, but all have fallen through.
This is Wells’ third try to buy the property. The difference this time, he said, is the region’s hot housing market, which has attracted new investors to the area and driven up real estate values. He has two investment partners and several others interested in joining the team, he said. He has proposed putting $1 million down on the property, then paying off the remainder through condominium sales.
Wells proposes restoring the Rookery and Mohawk buildings for condominiums and putting an 11,000-square-foot grocery on the first floor of the Rookery. He’d also build two 22- to 25-story condominium towers on the southwest and southeast corners of the block bounded by Riverside, Sprague, Howard and Stevens. He said he’s not sure of the total number of condominiums, but that prices for the units would likely be above $200 per square foot.
However, the deal hinges on the city of Spokane’s willingness to assist financially with the construction of a parking garage, Wells said. In February, the city, which was still facing a trial over the River Park Square parking garage debacle, declined to lease a parking garage as part of a deal proposed for the block by Renaissance Community Fund LLC, of Los Angeles.
Wells said he’s not sure how far the city will go to assist the project, but he has received support from City Council President Dennis Hession and from Mayor Jim West. He added that his investment team will not be asking for as many concessions as the investors from California.
“Our threshold of expectations … is not nearly as extensive as what Renaissance wanted,” Wells said.
Hession did not return calls seeking comment. The city’s economic development advisor, Tom Reese, deferred comment, as did the city’s Historic Preservation Officer Teresa Brum.
Reugh is reviewing the terms and conditions of the proposal and likely won’t decide until next week whether it’s acceptable, said Steve Gill, property manager for Reugh Companies. If the conditions are agreed upon, Wells will have 30 days to determine whether he can arrange financing and to work out an agreement with the city.
After the deal with Renaissance fell through, it appeared the Rookery and Mohawk might go the way of the 1890 Merton Building, which was torn down in the fall, along with several smaller buildings on Sprague.
All three buildings were eligible for listing on the National Register of Historic Places. The Spokane Preservation Advocates have held protests and collected thousands of signatures on petitions to save the buildings. The group also gave Renaissance a $5,000 grant to help move the deal along.
“We’ve been doing all we can to encourage people to develop the property,” said Dave Shockley, vice president of the SPA.
Wells said the region’s hot housing market has made a huge difference in his ability to attract investors. Housing prices in Kootenai County have risen 25 percent since this time last year and numerous residential projects have been proposed for downtown Spokane, including a proposed urban village on the Spokane River’s north banks and a condominium project overlooking the Spokane Falls.
“On a scale of one to 10, the last time I made a serious run at this, interest in this market was a one,” Wells said. “Today, it’s a 10.”
A sticking point for developers in the past has been the price Reugh was asking — $4.5 million. Following demolition of the Merton and the other smaller buildings, and additional work on the site, that price rose to $5.6 million, Wells said. Negotiations between the parties brought the price down to $5.3 million, he said.
Wells said the property is 43,831 square feet. The $5.3 million price tag breaks the price per square foot down to about $117, he said, which seems reasonable considering its location in the heart of the city’s commercial district.
Gill, Reugh’s property manager, said the deal with Wells is the last chance to save the Rookery and Mohawk buildings. If no agreement is reached, they will be torn down and replaced with a surface parking lot in about two weeks, he said. He added, however, that he is cautiously optimistic.
“We’ve had a lot of discussions over the years and nothing’s happened,” Gill said Friday afternoon. “We have to wait and see if all the terms and conditions have been agreed to.”
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