Spokane developer and architect Ron Wells says Wells & Co., which he heads, is close to buying the Fairmont Apartments building downtown and hopes to convert the gutted six-story structure into an upscale office building with retail space on the ground floor.


The building was damaged extensively last July by a fire that destroyed the adjoining Mars Hotel & Casino. Seattle-based Rainier Properties Inc., which owns the Fairmont and along with its sister company, Diamond Parking Inc., has other substantial real estate holdings here, had spent months cleaning out the 84,000-square-foot building to prepare for a restoration project. It scrapped those restoration plans last month, however, saying it had decided such a project would be too expensive. Also, it said it would demolish the structure and put a parking lot in its place unless a buyer stepped forward quickly.


Wells & Co., which Wells says approached Rainier Properties about buying the Fairmont two days after the demolition plans were disclosed, now has agreed with Rainier on a purchase price for the Fairmont, and the two parties are hammering out the details of the transaction, Wells says. He declines for now to divulge the agreed-upon purchase price, but says hes confident other details of the purchase will be agreed upon soon.


If the transaction is completed, Wells & Co. hopes to start work in October on a $7.75 million restoration at the Fairmont that would involve renovating the retail space on the ground floor and converting the upper five floors into office space, Wells says. Those floors previously included a total of 95 low- and medium-income apartments.


The exterior of the building also would undergo a certified historic rehabilitation, which would restore both the north and south faces of the structure, which front on Riverside and Sprague avenues, respectively, Wells says.


If work were to start in October, the entire project could be completed in May 2001, Wells says.


(Diamond Parking Inc. chairman and CEO) Joel Diamond made a valiant effort to save that building and spent over $1 million doing so, but it just didnt pencil out as an apartment building, Wells says. Wells & Co., which has renovated several old apartment buildings in Spokane, also looked into restoring the Fairmont as an apartment building initially. All thats salvageable of the structure, however, is the foundation, five bare floors, and four exterior walls, Wells says. Everything else has been torn out.


The cost of restoring the building as an apartment building would be about $7 million, and a developer would have to charge rent of $600 a month for a studio apartment to keep from losing money on the project, he says. The average rent for a studio apartment in Spokane County is substantially lower than that, or about $350 a month, according to a survey in The Real Estate Report published by the Spokane-Kootenai Real Estate Research Committee this spring.


Wells & Co. has specialized in historic rehabilitation projects for several years. Most recently, it joined forces with Avista Development, of Spokane, to form Steam Plant Square LLC and redevelop the old Washington Water Power Co. steam plant downtown into offices, retail space, and a restaurant.