Project was worth the gamble

Like many downtown developers, Steve Schmautz gambled when he purchased the decrepit Legion Building in 2002. And like many of those developers, he finds his bet paying off.

It took a little more than a year, but last week Schmautz signed a new tenant that will bring occupancy in the building at the corner of Riverside and Washington to 97 percent despite rents above market for “A” office space in downtown Spokane.

Maybe the tenants were taken with the stained glass and hand-applied Venetian clay walls in the lobby. Or the carefully restored woodwork. The fourth floor was restored to its 1930s appearance: glass walls, marble bases and hexagonal tile floors that Schmautz says he worked on hands and knees after hours to clean.

You almost expect Sam Spade to step out of one of the glass-paneled doors with the Maltese Falcon in his hand.

More likely you’ll encounter Schmautz’s wife, Tresa, who relocated her family counseling business into a neat corner office with views down Riverside and up the South Hill.

Schmautz says Tresa insisted he be as true as possible to the Legion Building’s history even as costs exceeded projections, and kept on going. There would be no corners cut.

When his analytical side was telling him “no way,” he says, Tresa’s response was “You have to do that.”

Schmautz says he dallied for more than a year before buying the Legion in mid-2002 for slightly less than $1 million. Others developers had passed, but Schmautz says he liked the building’s size, location at the edge of the downtown core, and unobstructed views from all four sides.

“It was gorgeous,” he says.

You had to look deep to see the beauty.

Schmautz, the owner of SDS Realty, has undertaken numerous redevelopment projects, but says the Legion “had deteriorated beyond your imagination.” Water pouring in through a leaky roof did much of the damage. A flat roof was slapped on when a 1939 fire destroyed the original mansard roof. Repairs were so haphazard some roof tiles and other debris from the fire were found strewn above the fifth floor ceiling.The Legion had been seven stories tall before the fire. One of Schmautz’s challenges was faithfully restoring the look of the building as it was when completed in 1901. Historic photographs were an important guide.

In fact, Schmautz says, one of the joys of the project was the enthusiasm of long-time Spokane residents, including the grandchildren of shopkeepers who once occupied ground floor storefronts. Others sent mementos like old postcards.

“It was a lot of fun to listen to their stories,” he says.

Fortunately, the Legion was as sound structurally as it was a mess cosmetically. As debris was cleared away and the building began to reveal more of itself, Schmautz says he walked through creating new interior spaces in his head. Potential tenants would need to see some finished space to understand his vision for the project. SDS offices, for example, are a combination of brightly painted, curved interior surfaces and the raw brick of the exterior walls. Bathroom stalls throughout the Legion feature full-length paneled doors. The basement exercise area includes tiled changing areas.

The Jaazz Salon & Day Spa on the ground floor is flooded with sunlight, with big flat-screen televisions overhead. “We wanted to have it look more metropolitan than Spokane was used to,” says co-owner Mark Brado.

He says new customers tell him they drove by Jaazz’s former location just a half-block down Washington for years and never noticed the business.

“(The move) was a good decision despite the new costs,” he says.

Schmautz says the Legion’s amenities pushed lease rates to between $18.50 and $23 per square foot, above the $20 per foot for most downtown “A” space. The building has limited parking, but he says that has not discouraged most potential tenants. Visitors from outside Spokane are “amazed” the city has such a building, says Schmautz, who credits workmen like Wayne King, Cort Johnson and Dave Coomes, and designer Wendy Cossette.

He also salutes Linda Yeomans, who did the paperwork that put the building on the Spokane Register of Historic Places, and AmericanWest Bank, which stuck with the project despite costs that eventually tripled his contingency. The final cost exceeded $5 million.

“We didn’t scrimp,” Schmautz says.