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Spokane, Washington  Est. May 19, 1883
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Owners of Wonder Building sue lumber manufacturer Katerra, claiming lease was broken

UPDATED: Tue., Sept. 29, 2020

The renovated Wonder Building is seen in a November 2019 photo. Timber manufacturer Katerra had leased office space in the historic bakery through 2026, but abruptly vacated the property earlier this month, the owners said. The owners are suing for damages.  (JESSE TINSLEY)
The renovated Wonder Building is seen in a November 2019 photo. Timber manufacturer Katerra had leased office space in the historic bakery through 2026, but abruptly vacated the property earlier this month, the owners said. The owners are suing for damages. (JESSE TINSLEY)

The owners of the recently renovated Wonder Building have sued one of their anchor tenants, the lumber manufacturer Katerra, seeking $3.5 million in damages including unpaid rent through 2026.

The lawsuit, filed Friday in Spokane County Superior Court, alleges Katerra took its personal property and left the historic bakery at 835 N. Post St. on Sept. 22, a full five years before their lease was set to expire. The lawsuit alleges Katerra made no effort to inform Wonder Spokane LLC, the Colorado-based firm that owns the 95,000-square-foot mixed-use building, that it was leaving and would not be paying its rent for the month.

In a statement Tuesday, Katerra declined to comment on the legal action.

“We do not comment on pending litigation,” the statement read. “However, Katerra is proud to be a land and business owner within the Spokane region and we look forward to continue fostering our many local partnerships.”

Katerra also owns a 270,000-square-foot timber manufacturing plant in Spokane Valley that opened in September 2019. The factory is being used to produce cross-laminated timber, a sturdy building material from lumber that is meant to replace steel and concrete.

Most of the Wonder Building was shuttered Tuesday afternoon, though signs posted just inside the front door indicated phone numbers to call to alert building tenants of deliveries as a precaution during the pandemic. That included a sign for Katerra, the California-based company with a manufacturing facility in Spokane Valley that has provided building materials and other services for several area construction projects, such as the Catalyst building that opened earlier this month along East Sprague and the completed high rise known as The M on the University of Washington’s Seattle campus.

Katerra signed a lease for office space inside the Wonder Building in March 2019, according to the lawsuit, agreeing to pay an increasing monthly rent that would have been $24,771 for September. The firm began moving its offices into the Wonder Building in July 2019, filing permits to complete improvements expected to cost $780,000.

Court records indicate the two companies agreed to waive Katerra’s rent payment in April “for the stated reason that the coronavirus pandemic has negatively affected its business.” The company was to pay that April rent amount over three months beginning in October, according to the terms of an amended lease agreement signed at the end of March. Wonder Spokane was also seeking an additional $5,500 to cover an insurance claim related to sewer gas, according to the amended lease agreement, that was also to be paid beginning in October.

Wonder Spokane is being represented by Shelley Ripley of the firm Witherspoon Kelley. Katerra has 20 days after receipt of the lawsuit to answer the claims in court.

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