Kendall Yards loses financial partner

A national company that planned to partner with Black Rock Development on the first phase of Kendall Yards is no longer financially committed to the mixed-use development north of downtown Spokane.

Cypress Equities, which specializes in retail development, build-to-suits and other aspects of mixed use projects, won’t develop or share ownership and expenses in the first phase of Kendall Yards, as was jointly announced last July.

The absence of Cypress Equities as a partner may affect some aspects of planning, but it won’t impact the final product, said Marshall Chesrown of Black Rock Development.

“The only change is they aren’t an equity development partner as was originally proposed,” Chesrown said.

The deal was never about money, he said, but about partnering with a company with a high level of expertise with big mixed-use developments. However, the companies couldn’t reach a final agreement.

“We’re just not compatible together on the terms. It’s a big deal and it’s a lot of negotiations,” Chesrown said.

Cypress Equities is a subsidiary of The Staubach Co., a Dallas, Texas-based firm founded by former football star Roger Staubach. The company represents users of office space that include IKEA, Coldwater Creek, Ethan Allen, Barnes & Noble Booksellers and others.

The joint-venture was touted for its potential to bring relationships with key retailers around the country to the mix.

Chesrown said the company is still involved in some aspects of the retail planning for the project.

Next week, Black Rock plans to break ground on the first phase of the 78-acre Kendall Yards project.

Located on the north bank of the Spokane River, the development is expected to include one million-square feet of commercial space and 2,600 residences. It’s planned in phases, to be built over the next 20 years.

Black Rock is in the process of getting the city’s approval for a tax increment financing district. The little-used financing tool would fund adding streets, extending sewer lines and other infrastructure, and be repaid with a portion of the taxes generated by the increases in property values spurred by the development.

Cody George, Spokane’s economic development advisor, said city officials aren’t concerned with the change in arrangements.

“It’s a business decision on their part. My understanding is that everything is still in place to make this a success,” George said.

Chesrown said Black Rock is currently negotiating with two other national companies specializing in mixed-use projects.

“We will still probably team up with a developer that has done a lot of mixed-use developments.”