December 9, 2004

Sleepy Spokane awakes to a real estate renaissance

  • Over $1 billion has been invested in downtown projects over the past five years.
    ConoverBond Development

    Montvale Hotel
    Photo courtesy ConoverBond Development
    ConoverBond Development next month plans to reopen the century-old Montvale Hotel, one of several developments in downtown Spokane.

    Spokane doesn't have the fast-paced environment of Seattle or Portland, but it is changing. Over the last five years, investors in this once sleepy city have made over $1 billion in downtown real estate improvements.

    In 1990, downtown Spokane's economic future looked grim. Rumors of Nordstrom and The Bon Marche closing were rampant. The "mallification" of Spokane that started decades before was finally wreaking havoc in Spokane's historic core.

    Then along came a renaissance. Though collective efforts were made to improve the local economy, one development in particular, River Park Square, lead downtown toward recovery.

    Ron Wells of Wells and Co., often considered the father of Spokane's recent rebirth, teamed up with Avista to redevelop the historic steam plant building. Developing the 60,000-square-foot plant and its imposing towers was akin to building a water slide in Oklahoma during the dust bowl.

    My company, ConoverBond Development, then redeveloped the abandoned 136,000-square-foot Holley Mason Building. First it was used as a temporary home for Lewis and Clark High School while the school's historic 1914 building was remodeled. Today, Holley Mason is 100 percent occupied by high-tech office tenants.

    Other projects followed: the Davenport Hotel, the Riverpoint Campus for Eastern Washington University and Washington State University, and the historic American Legion Building. The long-abandoned 1899 Montvale Hotel will re-open next month.

    The city has organized an annual high-tech and business party called Launch Pad, with the goal of ending the brain drain that has seen local talent end up in Seattle and Portland. Launch Pad is Spokane's big city social event, connecting the younger generation to the city's future by demonstrating the successes of local business. Mixing positive examples with young minds shows the region can offer high-quality jobs.

    In keeping with an emphasis on attracting young people, the Big Easy Concert House has opened, bringing acts here that would normally sleep through Spokane on their way between Seattle and Minneapolis.

    Those familiar with progress in Spokane's commercial real estate market might have compared it to a game of golf: most people like it for its slow pace, but get tired of it around the 10th hole.

    But the game is changing.

    One clear source of change is banks. As local banks such as American West have emerged and credit unions such as Spokane Teachers and Global have expanded their commercial portfolios, developers have been able to make projects work.

    In the years since Expo ‘74, few real estate transactions in Spokane have been bid over the asking price. Purchasers knew the actual sales price might be 80-85 percent of the asking price.

    That's changing.

    Bidding on Spokane's 77-acre Summit Site, just north of downtown, went from $11 million to an auction price of over $12.8 million. Other downtown land prices are seeing sales in the $50-$100 per foot range — prices rarely seen outside the Puget Sound area.

    Like the rest of our nation, Spokane strives for better economic times. It must cut city spending to balance a $10 million budget shortfall. But, Spokane voters in 2003 passed a $165.3 million school improvement bond, which with state matching funds will mean over $210 million for Spokane Public Schools by 2009. Just last month, city voters approved a $117 million bond issue for street repairs.

    An old concept — the Great Gorge Park — is gaining momentum in downtown Spokane again. The park was conceived by the Olmstead Brothers. With recent completion of a footbridge across the Spokane River at Latah Creek, Great Gorge Park seeds are germinating.

    Proof that Spokane's economic climate is finally changing is the sheer number of big-time events scheduled for Spokane over the next few years. Next year, Spokane will host the World's Sister City Meeting and, in 2007, it will host the U.S. Figure Skating championships as well as the first and second rounds of the NCAA Division I men's basketball championship.

    Gonzaga University basketball has been an economic driver, providing community loyalty and pride. Add Eastern Washington University's success in basketball, volleyball and football, and Spokane's got the sort of fun that helps drive better economic times.

    Once ranked second to last in Money magazine's best cities list, Spokane has worked to improve its appeal. Recently, the Milken Institute ranked Spokane 55th (up from 157th in 2003) as one of the nation's best performing cities.

    One key ingredient missing from Spokane's landscape is the willingness to embrace diversity.

    Diversity is key to any city's economic success. In a city of poor economic and social diversity one has to ask: Where are new ideas going to come from? Spokane must get out of the business of trying to be only a "family-friendly" environment and learn it has to encourage people from diverse backgrounds and beliefs to live and invest here in order to find permanent economic stability.

    Spokane's real estate climate and respect west of the Cascades will continue to grow as our community proves that it's worthy of investment and participation.

    Robert C. Brewster Jr. owns and manages ConoverBond Development, a Spokane-based real estate investment company specializing in urban redevelopment, including historic renovation and new construction.

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