Two years ago, veteran commercial real estate broker Marshall Clark said hed never seen so many vacant retail spaces in the Spokane Valley, especially along the traditional retail area of East Sprague Avenue between Thierman and Sullivan roads.


Since then, he says, Its gotten worse.


As the Spokane Valley Mall area has burgeoned into one of the regions largest retail hubs, the Valleys old-guard shopping corridor to the south and west has fallen further onto hard times.


Some observers blame the areas woes on the Valley couplet, which opened more than a year ago and diverted eastbound traffic off of a 2 1/2-mile stretch of East Sprague between Theirman and University roads. Others say, however, that the dark retail spaces that dot East Sprague as far east as Sullivan arent restricted to the couplet, and that the problems started before the couplet opened.


Regardless, many are hoping that new leadership in the fledgling city of Spokane Valley will do something to restore business vitality there.


Its not going to be a magic solution, but focused civic interest would be a benefit to everybody, says Eldonna Gossett, president and CEO of the Spokane Valley Chamber of Commerce.


Vacancy rates for retail space in the Valley are higher than on Spokanes South Hill and North Side, and properties in the Valley are fetching lower rental rates on average than in either of those areas, according to a survey conducted in February by Spokane appraisal firm Auble, Jolicoeur & Gentry.


Of the 3.4 million square feet of Valley retail space surveyed, 13 percent was vacant, compared with 11 percent on the South Hill and 6 percent on the North Side. The average annual rental rate for the retail space in the Valley came in at $13.28, slightly below the South Hills $13.44 rate and well below the $14.63 that North Side properties were getting.


Though an updated vacancy report is slated to come out next month, Scot Auble, president of the appraisal firm that does the survey, says, It hasnt changed.


Also, the situation on East Sprague is likely much worse than those numbers suggest, Auble says. The empty spaces in older strip centers along Sprague make up much of the overall vacancy rate for the Valley, he says, adding that if the survey included only space along Sprague, the vacancy rate would be far higher.


Similarly, says Clark, annual lease rates for many of the retail spaces along Sprague have fallen to around $8 a square foot, and in some pockets they go for as little as $3 a square foot. Premium locations at higher-traffic intersections, however, still fetch higher rates, at or above the Valley average, he says.


Also, overall, according to the same earlier survey that found rental rates across the Spokane area, Valleywide retail rental rates had risen to the aforementioned $13.28 in February, up from $10.86 in February 2000 and $10.69 a year earlier.


Some of the empty spaces in the Valley have remained empty for some time. A former Rite Aid Corp. store at the southeast corner of Sprague and University has been vacant since the company moved from that space about two years ago. A former Home Base store along Sprague has been empty since the company closed its store here over a year ago.


Overbuilt?


Clark blames some of the vacancy problems on developers who continued to build new strip centers in the Valley after the retail market began to cool in the late 1990s. A couple of strip centers built two years ago along Sullivan Road, near Sprague, have vacant spaces that never have housed a tenant.


It wouldnt be to the extent it is today if they would have stopped building when they didnt have tenants, Clark says.


Some observers say, however, that the stretch of Sprague that lies farther out than the new couplet, between University and Sullivan roads, is thriving, and that the only segment thats struggling is within the couplet, where Sprague carries only westbound traffic.


Gossett points to a number of big-box retailers that remain along the two-way section of Sprague in the Valley, including a ShopKo Stores Inc. outlet, and a Target Corp. store, among others.


Martin Burnette, spokesman for the Spokane Valley Business Association, says a number of the associations members with businesses along the Sprague leg of the couplet have reported continued sales declines since the couplet opened. Members who own properties there say they continue to struggle to attract tenants, Burnette says. East of the couplet, however, fewer people are reporting such problems, he says.


Auble says, however, Its hard to point to the couplet as causing those problems because that was the area that was seeing some vacancies already.


While the couplet might not be completely to blame for the current state of retail along Sprague, the two-street corridors future is at the center of many of the proposed solutions to the problem.


Some people have proposed converting that leg of Sprague back into a two-way street, but leaving the couplets eastbound leg, Appleway Boulevard, as it is now.


Others have suggested that the new city of Spokane Valley should locate its City Hall along Sprague, perhaps to generate more traffic and spark development.


When the new city is officially launched, responsibility for the couplet will shift to it from Spokane County.


Spokane County Engineer Ross Kelley says a transition committee for the new city asked the county to study what it would cost to convert Sprague back into a two-way street along that 2 1/2-mile stretch. He says the county estimated that it would cost $2 million to convert Sprague into a two-way street and keep Appleway as is, and $4 million to convert both streets into two-way thoroughfares.


Ultimately, that will be the city of Spokane Valleys call, Kelley says.


While Clark, Burnette, and others have come out in favor of such a conversion, Marlene Hollenback, co-owner of Dishman Dodge, which is situated between Sprague and Appleway and benefits from traffic going both ways, says that would be a costly, unnecessary move. Instead, she suggests that the new city look into creating more cross streets between the two legs of the couplet.


She says that in a positive sign, Dishman Dodge recently found a potential buyer for its former used-car building, which is on the north side of Sprague. While she declines for now to disclose the buyer, she says the 16,000-square-foot building likely will be improved and occupied by next spring.


Even for businesses on the north side (of Sprague), things are going to go back to normal and be OK eventually, Hollenback says.


Dishman Dodge also plans to start work next spring on a new, $2 million showroom building at the southeast corner of Sprague and Park Road. The new showroom will be visible from Sprague, Park, and Appleway.


Another new project is proposed that would take advantage of traffic along both Sprague and Appleway.


Orville Barnes, who owns Barnes Consulting Co. and markets University City Shopping Center, says a multitenant retail center, to be called U-City West, is envisioned along Dartmouth Road, between Sprague and Appleway. Preliminary plans call for the center to include about 35,000 square feet of retail space.


Interest is a little slower than what I expected, but nothing is very swift anywhere right now, Barnes says. Well see more activity in the spring.