The city of Spokane is considering giving $106,000 to a private developer to spur construction of a six-story, 104-unit apartment building on the east end of downtown.
The project, called Riverside Commons, would replace a small drive-through bank building built in 1994 on the corner of Riverside Avenue and Browne Street.
Beyond the cash investment from the city, the project would likely qualify for up to $1.37 million in other incentives, including the multi-family tax exemption, the urban utility installation program and a waiver of the general facility charge.
The City Council will consider approving the cash gift on Monday. It would also require approval from Mayor David Condon.
“I absolutely love the area, as far as walking and the bars and restaurants,” said Kevin Edwards, a local commercial real estate developer leading the project whose office is near the site. “I stare out at this property all day and I would see maybe three cars go through the drive-through. And there are six lanes. I thought, what the hell, this is the most underutilized piece of property in downtown Spokane.”
Edwards, who worked with an investor to buy the underlying property, said he is communicating with an out-of-town developer of student housing to develop the building, but he would not name the company.
Edwards said the final plans for the building are still incomplete and will surely vary from what’s been filed with the city. But those plans describe a 7,200-square-foot building, with units averaging about 880 square feet. Construction is anticipated to start in spring 2020 and take 18 months to complete, in time for the fall term of classes in 2021. Illustrations and designs show 73 parking stalls in an underground lot and 37 spaces in a street-level lot.
A city committee made up of elected officials and municipal financial officers recommended approving the cash investment, and said the project would “add lasting value to the city and achieve measurable positive impacts by bringing new livable wage jobs, generating tax revenue, and advancing the community’s visions.”
The members of the committee that evaluated and recommended the project are Council President Ben Stuckart, Councilwoman Candace Mumm, the city’s chief financial officer Gavin Cooley, and Rick Romero, the city’s former utilities director who’s been leading its economic development initiatives.
Stuckart said the program funding the cash investment – the Projects of Citywide Significance program – has been successful. The program is an offshoot of the Targeted Investment Program that Stuckart came up with in 2013, which led to the renovation of the Union District on East Sprague Avenue. Instead of focusing on a certain part of town, the citywide significance program focuses on big projects that “improve the public realm,” Stuckart said.
“And it’s resulting in housing. We desperately need more housing in our community,” he said. “The more people that live downtown, the safer it will be. Experts agree: Having eyes on the street, the more walkable it is and people living there is better than any number of cops. The east end is a great place for this.”
The program began in 2017 with $1.8 million, money saved when the city refinanced bonds paying for the settlement of a federal lawsuit related to the River Park Square parking garage at a lower interest rate in 2016. In 2005, $25.2 million in bonds were taken out to pay for a settlement in a federal lawsuit related to the troubled downtown parking garage. River Park Square and its garage are owned by Centennial Properties, an affiliate of the Cowles Co., which also publishes The Spokesman-Review.
All of the money in the program has been obligated, said Teri Stripes, a planner with the city who works on incentive programs. Other projects that will receive the money when they’re completed are the Ridpath Apartments, the Otis Hotel, Avista’s Catalyst Building, ParkView West, the Falls Tower, Esmerelda Industrial Park and the McKinley School.
The two projects that have already received reimbursement are the Wonder Building on the north bank of the Spokane River, and The M, a mixed-use and apartment building owned by the Cowles’ Centennial Properties.
Stuckart said the program wasn’t a giveaway to developers but was designed to spur growth.
“We’re not just cutting a check to developers,” he said. “We’re incentivizing jobs, housing, how much sales tax these projects bring, how much property tax these projects bring in for the public. We’re measuring it with good jobs and tax revenue for the city.”
In a letter detailing their positive recommendation of the project, the city’s project review committee said the project will “cause both direct and indirect public benefits and can reasonably be expected to stimulate economic growth and create new jobs (and) provide increased sales and property tax revenues.” It noted that “other indirect benefits of housing and retail sales in the surrounding area are anticipated.”
City staff estimated that 36 jobs would be created, seven of which would be at or above living wage, which it defines as 130% of the city’s median income. The city’s median household income from 2013 to 2017 was $44,768, according to the census.
The committee also estimated that the city would get $468,649 in “returned revenue” over three years. Stripes said this dollar figure counted only city revenue from sales, property and utilities taxes. The state and county will also see tax revenue.
Other city incentives the project could receive include an eight-year break on property taxes under the multi-family tax exemption, which could result in $1.2 million in savings; a waiver of the General Facility Charge, which excuses charges for new sewer and water connections, equaling about $53,373 for this project; and the Urban Utility Installation Program, which provides up to $10,000 for water and sewer line upgrades when vacant land is redeveloped.
The Riverside Commons property, which is made up of two separate parcels, was purchased by Spokane Riverside Partners LLC in May from Umpqua Bank for $1.47 million. It was last sold in 1994 for $185,000. That company is owned by Select Credit & Leasing LLC, which in turn is owned by Ken Cook. Cook owned trucking and freight companies for decades, and now owns investing and consulting businesses in Washington, Arizona and Montana. Edwards asked Cook to buy the properties when Umpqua Bank, the previous owner, put them on the market.