The Argonne-Mullan corridor, an area of Spokane Valley thats flush with partially vacant office buildings, is a focus of renewed interest from developers who recently have completed or are planning projects worth at least $13 million.


During the last two years, at lease six buildings have sprung up in the mile-long corridor, which stretches from Interstate 90 to Sprague Avenue, and at least two other buildings are being developed there currently.


The growth is unusual for an area that hasnt seen much construction activity since the late 80s when a host of office buildings were built, says Bruce Miller, vice president of WAM Enterprises Inc., of Spokane.


Its now being developed into the second generation (of office space), says Miller. Its still a very central location, and its a better location than the office buildings on Sullivan and Liberty Lake, he asserts.


Driving through the corridor, its almost impossible to miss the for lease signs that dot the landscape. At least a dozen buildings have vacancies. Lease rates in the corridor range between $12 and $20 a square foot, real estate agents here say. The average rate in the corridor is about $13 a square foot, says Vic Overholser, a commercial real estate agent with SDS Realty Inc., of Spokane. He says lease rates in the corridor are lower than in downtown, where rates start at about $14 a square foot, and in Liberty Lake, where rates start at about $20 a square foot.


Despite a recently soft lease market in the corridor, though, developers and real estate agents are optimistic the office market along Argonne and Mullan will stabilize and improve over the next few years.


Its picking up some, says Dan Cantu, a developer and real estate broker. It has always been a strong real estate market because of access to Interstate 90, free parking, and its easy to get downtown, or to get to Coeur dAlene. There is just as much product (office space) here as there is on the periphery of downtown Spokane.


There is very little open space in the corridor left to develop. Farmers & Merchants Bank, of Spokane, owns one of the last parcels of vacant land, just north of its headquarters at 25 N. Mullan. The bank hasnt decided what it will do with the property, says John Wagner, Farmers & Merchants president and chief operating officer.


Its an excellent corridor, Wagner says. The impact of the one-way on Sprague has changed up some of the frontage. We hope to make a decision on what to do with the property in the next 18 months.


A number of developers, though, are moving forward with projects.


Cantus company, Cantu Investments LLC, of Spokane, recently finished building a $3 million, 27,000-square-foot building at 1420 N. Mullan, which is next to the Mullan Centre Building, at 1410 N. Mullan. The new two-story structure can accommodate up to a dozen tenants. Cantu says he is negotiating lease agreements with a handful of businesses, but declines to name them. Cantu Investments also built the $2 million Mullan Centre Building in 2001. That 16,000-square-foot building has six tenants, and is full.


I had the opportunity to buy the (adjoining) ground and it made sense, says Cantu. It was time to build a second building.


WAM Enterprises plans to start work on a 5,300-square-foot office building at 620 N. Argonne, in the coming months. The $1.3 million project is expected to be done by next year. Panco Construction Inc., of Spokane, will build it. Miller says WAM Enterprises designed the building to cater to the medical industry.


We dont have any tenants, but weve had numerous requests, says Miller. We dont want to compete with general office space.


WAM Enterprises also built a $2.5 million retail center at the corner of Mission and Argonne in 2003 and sold the 9,520-square-foot building to a Portland company last year.


Argonne Forest LLC, of Spokane, is developing a $2.3 million office building at 8775 E. Mission, which is on the periphery of the corridor. Argonne Forest will lease the building to the University of Phoenix, a national school for adults continuing their education. Divcon Inc., of Spokane, is building the 13,500-square-foot structure, and Architectural Ventures, of Spokane, designed it. Argonne Forest is owned by Al Payne and Joe OConnor, both of Spokane.


Spangle, Wash. developer Harvey Raugust completed a $1.75 million retail center at 9119 E. Broadway a few months ago. The 6,500-square-foot building is located where a Circle K convenience store once stood and can be accessed from both Argonne and Mullan. Overholser, who is marketing the structure, says Starbucks Corp., of Seattle, and Spokane-based Weldon Barber, which operates a chain of upscale mens haircut shops, will lease space there. He says hes negotiating a lease agreement with a Spokane-based fitness equipment retailer for the remaining space, but declines to name the business.


Boulder Creek Inc., of Spokane, developed a project in the corridor worth about $1.1 million last year, according to a Spokane Valley building permit. The company built a 17,000-square foot office building at 511 N. Argonne, which now houses Walsh & Associates, a social service agency for people with disabilities.


Spangle developer Dennis Raugust, who is the son of Harvey Raugust, developed a 10,000-square-foot building at 505 N. Argonne, last year. Originally, the building was valued about $500,000, according to a Spokane County building permit. It later was sold to Firgrove Investments, of Spangle, Wash. It leases about 3,000 square feet of floor space to A-TECH Inc., a Spokane Valley surveillance security company.


Argonne Professional LLC, Spokane Valley,completed a 3,600-square-foot structure at 521 N. Argonne last summer. Argonne Professional leases the building to Blasingame Insurance Agency, of Spokane Valley. The project cost about $575,000.


While it looks promising for more development in the corridor, some businesses are leaving. For example, ITT Technical Institute is moving from its complex at 1050 N. Argonne to a bigger building just north of Interstate 90.


The vocational school will depart from the two buildings its leasing by the end of the year.


That could leave the complex, which has about 25,000 square feet of floor space, vacant. Dave Black, CEO and part-owner of Tomlinson Black Commercial Inc., of Spokane, owns the buildings with a partner.


Black says the buildings are for sale. However, Black also says hes close to finding tenants to occupy space there, but declines to name them.


The possibility of the ITT buildings sitting vacant could push the corridors lease rates lower, says SDS Realtys Overholser. Despite that possibility, Overholser says, his enthusiasm for the corridor is high.


Absolutely, its an attractive area, he says. Its only going to improve over the next few years.