Nitze-Stagen & Co., the Seattle-based real estate investment and development concern, has agreed to co-develop the 76-acre Summit site west of downtown Spokane with Spokane-based Metropolitan Mortgage & Securities Co., which owns the property.
Well be the lead developer, says Kevin Daniels, Nitze-Stagens president.
The Seattle company is holding meetings this month with West Central neighborhood representatives and city of Spokane planners to discuss the project, and hopes to begin making site improvements by next summer, assuming regulatory issues dont cause undue delays, Daniels says.
Of city officials, he says, Im sure theyll be very receptive, and (they) have been to date. A lot of questions remain to be answered in the pre-application process, though, he says, because this is not a normal project for anybody at the city, due to its size, complexity, and unusual nature.
Nitze-Stagen and Metropolitan continue to envision a self-contained urban village on the site that will include a pedestrian-friendly mix of residences, offices, and retail shops. Daniels has claimed it will be unlike any other Spokane development, featuring a style called new urbanism that can be seen in areas such as Portlands revitalized Pearl District and San Diegos Gaslamp Quarter.
The projected mix of uses has been modified, though, from earlier proposals for the site to include a heavier residential and lighter commercial emphasis, Daniels says. As now envisioned, the project will include about 1,700 residential units of various types, close to 500,000 square feet of office space, and 40,000 square feet of retail space, he says. Earlier plans had called for around 1,000 residential units and more than 1 million square feet of office space.
The changes were based on determinations that the demand for in-city living space will be much stronger here over at least the next several years than the market for office space, Daniels says.
In some ways you could say our new vision is less intensive, and I cannot imagine why it wouldnt be very favorably perceived, he says.
The Summit site is by far the largest piece of undeveloped land near downtown Spokane. It extends west from Monroe Street along the north bank of the Spokane River to Summit Boulevard, which parallels a northward bend in the river.
The main focus of getting property ready to be sold or developed will be at the west end, Daniels says. Were talking to a number of development companies to either acquire or jointly develop the residential product.
Nitze-Stagens role as lead developer will include making infrastructure improvements to the site, such as installing utilities, streets, and curbs, and assisting other companies that want to develop portions of the site, he says. That assistance may include providing expertise, equity financing, or acting as co-developer, he says. Nitze-Stagen also will spearhead development of commercial space there, which is where our expertise lies, he says.
While it expects to work with a host of other developers at the Summit site, Daniels says Nitze-Stagens focus is on the success of the project as a whole. Were not looking at this as breaking off a piece here and there.
Nitze-Stagen, which also has offices in New York, has gained prominence in the Seattle area for taking on complex, urban adaptive reuse projects, and using its development expertise and investment resources to overcome obstacles. Two of its highest profile projects include redevelopment of a 2 million-square-foot Sears, Roebuck & Co. distribution center in Seattle into a mixed-use facility called Starbucks Center and a massive restoration of the historic Union Station terminal building there.
Daniels is a graduate and current regent of Gonzaga University who approached Metropolitan Mortgage in the fall of 2002 to discuss the Summit site after becoming interested in its development potential. Nitze-Stagen and Metropolitan entered a formal due diligence process last spring, and since then the two companies have been studying the feasibility of developing the site jointly.
Metropolitan began accumulating property at the Summit site about 20 years ago and disclosed plans in 1990 for a possible development there, similar in concept to what now is being eyed.
The city of Spokane approved a master plan, environmental impact statement, and planned-unit development for the site in 1994. Metropolitan has struggled since then, though, to attract a major office or commercial tenant.
Its unclear what effects, if any, recent financial troubles at Metropolitan have had on the companys real estate development activities.
The American Stock Exchange temporarily suspended the trading of various shares of the company last month, shortly after its stock brokerage affiliate was fined and censured by the National Association of Securities Dealers Inc. (NASD) for fraudulent trading practices. In the wake of that disciplinary action, Metropolitan Mortgage and affiliate Summit Securities Inc. suspended the payment of dividends on preferred stockfor the first time everto preserve liquidity, and Metropolitans share prices fell sharply in response to that action.
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