The city of Spokane is preparing to take over planning jurisdiction for a $12 million retail development proposed on land on the upper South Hill that was recently annexed into the city. 

The first phase of the development, however, likely will be reviewed under land-use codes that allow drive-thru restaurants that otherwise wouldn’t be allowed under the city’s centers-and-corridors zoning designation for the property, says Mike Nilsson, a city engineer.

“It’s going to be reviewed under county codes it was originally applied for,” Nilsson says.

The development, to be named Commons on Regal, is planned by restaurateur and real estate developer Cyrus Vaughn on 9 acres of land formerly occupied by South Regal Lumber Yard Inc. The property is located on the east side of Regal Street and bordered on the north and south by east 53rd and 55th avenues, respectively.

The development site is part of 42 acres of land recently annexed into the city.

The preliminary site plan for Commons on Regal shows that two 5,000-square-foot drive-thru restaurants would be constructed on the southeast corner of Regal and 53rd and the northeast corner of Regal and 55th.

Vaughn says the proposed land use is vested because he had begun the planning process for them with the county, where the use is allowed, prior to the annexation by the city.

He says he expects to announce tenants within the next 45 days.

“It won’t be typical fast food, like Arby’s, Burger King, or Taco Time,” he says. “We plan to be selective in choosing tenants we think will fit in with the neighborhood center we want to build. We have more demand for space than we can supply.”

The preliminary site plan shows two 8,700-square-foot retail buildings would be set between the corner restaurants and farther back from Regal.

Vaughn aims to begin construction yet this year or early next spring.

“In a best-case scenario, we could have something open in early summer,” he says.

A project supervisor is working on the development, and Vaughn says he’s leaning toward acting as his own contractor. He declines to identify the project architect, although preliminary plans show Spokane firms Nystrom+Olson Architecture and Russell C. Page Architects PS have had early roles in the designs.

The four shell-only structures would have a total construction value of $2.8 million, planning documents on file with the county as of last week show.

The second phase, which would be on the east half of the development, would include a 29,500-square-foot grocery store, Vaughn says.

“We’re working hard to get an organic grocery store,” he says.

Also in the second phase, the preliminary site plan shows four 4,100-square-foot future retail buildings, although Vaughn says the development also is drawing interest from potential medical tenants.

“It could be both a grocery store and a medical office building,” he says of the second phase.

Spokane commercial real estate brokerage SVN Cornerstone is marketing the Commons on Regal development.

Vaughn says he doesn’t anticipate a slowdown in the first phase of the development as the city takes over the planning process.

“We have the right to build what we submitted to the county,” he says.

Nilsson says, though, that the environmental review process, which is required under the State Environmental Policy Act known as SEPA, is in a holding pattern.

He says no decision has been made yet on when the city will take over the SEPA process.

“Some additional information is requested from the developer,” Nilsson says. “More information is wanted on the traffic analysis.”

During the county’s SEPA comment period regarding the plan, dozens of neighborhood residents submitted concerns over traffic impacts the development would have on Regal.

Ted Teske, chairman of the Southgate Neighborhood Council, questions whether the traffic estimate of 1,175 average daily vehicle trips for the first phase of the development is accurate.

He asserts the traffic estimate was calculated based on a shopping center designation. Restaurants with drive-thru windows have their own designation, with traffic substantially higher than those without drive-thrus, he claims.

“We want to make sure they’re giving real numbers,” Teske says. “The whole point of SEPA is to assess the environmental impact, including traffic.”

The Southgate Neighborhood Council advocates pedestrian-oriented development along that part of Regal.

“The reason we’re taking such a keen interest is—whether it’s in the county or the city—the intent of the zoning is to discourage auto-dependent uses,” Teske says.

He says residents in a dozen apartment complexes within a quarter mile of the development could approach the development by means other than a car.

Teske also questions whether the county had authority to open a SEPA comment period after the city annexed the property.

“We don’t know if the city is going to rerun the comment period,” he says.

Vaughn says he’s confident the project will withstand environmental scrutiny.

“A 300-page SEPA file was accepted by the county with a couple of small changes,” he says.

The SEPA documents were compiled by Whipple Consulting Engineers Inc., of Spokane Valley.

“Whipple has 30 years of experience,” he says. “They’re the best in the business.”

Vaughn says the development will participate in transportation improvements.

“I’m pretty certain we’ll be paying our share of the impact fees for a new traffic signal,” he adds.

He says the traffic signal could be located at 53rd and Regal, although the location ultimately would be up to the city.