Of the Journal of Business


Avista Corp. had been working to open a back-office operation in a Spokane Valley office park planned here by technology guru Bernard Daines when the project was affected adversely by growth-management issues, Avista Chairman, President, and CEO Tom Matthews says.


Daines has been planning to develop the park on property across Sullivan Road from the Spokane Valley Mall, Matthews says. Daines declines to disclose the location of the project yet.


Says Matthews, We were negotiating with him to put a back-office operation there for Avista Advantage, an Avista subsidiary, in a park that would provide space for hundreds of workers.


Daines, who founded Packet Engines Inc. here and sold it last December, has been planning to launch his next high-tech startup, tentatively called Worldwide Packets, in the proposed park, Matthews says. What he needed was a labto show people what you can do on the Internetand a place that was wired.


Worldwide Packets would demonstrate its technology by allowing Avista Advantage to use it, which would benefit Avista Advantage, Matthews says.


Avista Advantage, which provides Internet-based specialty billing and information services, has been contracting out its back-office processing services to Louisville, Ky.-based NPC, but now wants to handle that work itself.


Daines declines to discuss the technology-park project in detail, but says development of the park has been slowed because of tenant recruitment issues related to growth management. He explains that potential tenants are reluctant to move into the park because theyre nervous about their ability to attract workers, who could be apprehensive about their ability to find suitable home sites here.


Daines plans had been hurt when Alcatel, the company that bought Packet Engines, decided against building a new operation in Spokane. Daines says the idea was for Alcatel to occupy space in his proposed office park, but the company later decided to move elsewhere.


Also, Daines, a Spokane native and the founder of two other highly successful high-tech startups, says he had hoped to build a home for himself, as well as allow other family members to build homes for themselves, on a piece of property he owns in the Valley, but was unable to divide the land the way he wanted because of limitations involved with growth-management planning.


Matthews adds that because of the problems Daines has faced here, he has talked about launching his next venture in the Provo, Utah, area.


Hes going to leave this community, Matthews says. You cant afford to let him do that.


Spokane, Matthews says, must recruit or develop technology, telecommunications, biomedical, and manufacturing companies if its going to add the kind of high-paying jobs it needs to growand Daines can be a key in building the technology industry here.


Bernard thinks this community can be an Internet hotbed, Matthews says.


Matthews, who says he is working personally to keep Daines here, had said in a speech June 10 that Avista might move its non-regulated subsidiaries out of Spokane because it was unsure it could grow them here. He said in an interview last week that he was surprised at the amount of reaction to his remarks.


He said in the interview that he believes its possible for business, government, and community leaders to work together on issues, such as infrastructure, growth management, and education, and keep in Spokane the non-regulated Avista businesses that are still here.


People are beginning to coalesce, and the mood of the area is such that its ready to work together for change, Matthews says. Theres a dream going on.


For a community thats trying to attract higher-paying technologically oriented jobs, the Avista subsidiaries would be well worth having. Avista Corp. estimated last week that four subsidiaries, Avista Advantage, Avista Communications, Avista Fiber, and Avista Labs, could employ some 740 people, including 50 to 60 at a contract manufacturer, by the year 2003, up from 133 now.


Right now, though, Spokane is suffering from a talent drain because bright young people who grow up here dont see their hometown as a place that offers opportunity, Matthews says.


He says Avista supports 66 scholarships a year for students who attend colleges and universities in the Spokane area and recently talked with last years recipients of the scholarships.


Not one of them plans to go to work here, he says. Weve got to build on job creation so our talent stays at home. We have to figure out how to bring high-tech, bio-tech, and manufacturing jobs here so that we dont have all of this flight.


Downtown move still a possibility


Meanwhile, Matthews says he remains interested in the possibility of developing a corporate campus for Avista Corp. downtown by using its Post Street Station and Huntington Park properties and City Hall, as has been discussed conceptually by city officials and others. But he is waiting for the city to come up with parking for such a headquarters office.


As part of the proposed plan, the city would move City Hall to Metropolitan Mortgage & Securities Co.s Summit development site north of the Spokane River. Officials have seen that as a way to jump-start Summitand have seen bringing Avista Corp. downtown as a way to bolster the city center.


If Avista were to occupy City Hall, it would need 300 parking spaces, and it wants them to be adjacent to its building, Matthews says. Under one concept, that parking would have been in the expanded River Park Square parking garage, but the garages financing arrangement only designates 10 percent of the facilitys spaces to private use, and Nordstrom will occupy all of those spaces, he says.


I would like to see 400 high-salaried Avista employees walking across that bridge (between City Hall and River Park Square) and shopping at Nordstrom, Matthews says. Yet, he wont consider any move of Avistas headquarters to the city center unless it meets the needs of the companys employees.


I had an idea and a vision that I thought would be neat for us. But Im not interested in anything if it doesnt fit that vision, Matthews says. Also, he doesnt think its his role to solve the parking problem. Im just waiting, he says. I have an interest, but Im not driving it.


City Manager Bill Pupo says the city hasnt had additional discussions with Avista about parking solutions, but he plans to do so eventually. Currently, an Avista employee who would be involved in the discussions is out of town, he says.


Terry Novak, chairman of the Parking Development Authority (PDA), says no one has approached that five-member body about trying to develop a parking structure for Avista, but the PDA would take on such a project if approached. Thats what were here for, he says.


The PDA has been given more authority to search out locations that need public parking as a result of the downtown Spokane development plan, Novak says. Up to this point, the parking authority has been involved only with the River Park Square parking garage project. The authority was established three years ago so that it could operate and maintainand eventually ownthe River Park Square parking garage, Novak says.


We dont have any parking projects in the works right now, but with all of the stirring thats going onin regards to the proposed 25-story office tower and renovation of the Davenportit will undoubtedly lead to something, he says.