Spokane Journal of Business

Northpointe sees late bloom

Five more projects eyed behind big retail center; bare land disappearing

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For motorists zooming along U.S. 2 past Northpointe Plaza on Spokanes North Side, its difficult to see beyond the big retail centers acres of parking lots and sprawling conglomeration of interconnected stores.

Hidden behind that sprawling shopping complex, however, recently brisk development activity has been turning once-weed-infested vacant land into a business-and-residential district thats emerging in its own right.

Currently, at least five more projectsa 114-unit apartment complex, two multitenant commercial buildings, and two dental-office buildings, that collectively would cost upwards of $7 millionare planned or being eyed in that area, and construction is expected to start this year on at least a couple of them.

Construction projects with a combined value of more than $40 million have been completed there over the last five years, and the amount of undeveloped land has dwindled to a handful of parcels. The activity has been scattered along both sides of Holland Avenue and Nevada Street, which intersect behind the retail center.

I think its a wonderful area, says Dr. Rodney Braun, a dentist who plans to construct a 5,000- to 6,000-square-foot building on the north side of Hollandacross from a new Altons Tire Centerto house his practice, Braun Dental Care.

Another dentist, Dr. Chris Chaffin, says he plans to develop a similar-sized building on land he bought a short distance to the west to house his practice, Chaffin Dental Care.

Braun and Chaffin currently share space in a nearby building, at 9671 N. Nevada, where another dentist also has a practice, and are among 10 or so dentists who have settled into that evolving business-and-residential neighborhood.

Its definitely a popular area for dentists now, Braun says.

It also is home to a host of medical offices, two retirement centers, a skilled-nursing rehabilitation center, a kidney-dialysis center, two fitness centers, a building-supply store, a couple of restaurants, a general contractors headquarters, a veterinary clinic, a quilt-and-craft-pattern publisher, and a post office, among other uses.

The latest project to be completed there is the $4.7 million Northpointe Professional Center, a three-story, 36,000-square-foot structure that Spokane developer and builder Dick Vandervert and orthodontist Duane Grummons have developed jointly at the southwest corner of Holland and Nevada.

To be sure, the area has filled in much slower than some commercial real estate agents expected it would after the Northpointe Plaza shopping center opened about 11 years ago.

Also, they say, recent projects therecombined with the effects of the economic downturnhave left the area with an oversupply of office space. Still, they say they expect the remaining developable land there to disappear quickly, due in part to limited availability of such land elsewhere that has utilities in place.

In-fill development pressure created by Washington states Growth Management Act, increased commuter traffic on Nevada, and the recent opening of a 150,000-square-foot Wal-Mart Stores Inc. store a short distance south of Holland also probably are adding or will add to businesses interest in that area, real estate agents say.

Upcoming projects

The largest known project currently being proposed in that area is the 114-unit apartment complex, which has an estimated construction cost of $4.9 million. It would be called Deer Run and would be developed east of Nevada on a portion of what formerly was the Birdies Golf Center driving range.

Inland Construction Co., of Spokane, and PacifiCap Properties Group LLC, of Portland, have received approval, with conditions, of a zone change for the projects site, from a limited light-industrial zone to a limited commercial zone to allow the project.

The apartment complex would include eight residential buildings and a recreation building, spread out over the six-acre, L-shaped parcel, as well as parking for 200 vehicles, according to documents submitted to the city. Access to the development would be from culdesacs on Westview and Morton courts.

Work on the project could start this summer.

A short distance from there, at the northeast corner of Nevada and Westview, three Spokane real estate investors plan to develop a multitenant, retail-office building thats expected to have about 6,200 square feet of floor space.

The investors, Dick Edwards and Pete Thompson, of the Hawkins Edwards Inc. commercial real estate company, and Spokane architect Denny Christenson own the land and would develop the single-story building.

Edwards says the construction start date will depend on how quickly tenants can be secured for the building. He estimates the total cost of the project at about $800,000, which includes the value of the land.

Edwards says the trio earlier had planned to develop plans for a two-story professional building on that site, but decided to scale back the project due to soft market conditions and now are redesigning the envisioned building to appeal to a broader mix of prospective tenants.

Bob Spears, owner of Spokanes Heritage Properties Inc., says he and several other investors plan to develop a multitenant commercial building on land they own next to the year-old 24 Hour Fitness building at 603 E. Holland. He says they hope to begin construction of the 10,000-square-foot structure this summer, and he estimates the total cost of the project at about $1 million. Christensons firm is designing that project.

Spears says the building will be similar to one the investors own west of there, near the northeast corner of U.S. 2 and Holland, that currently houses four retail tenants and an eye-care clinic.

He says the group decided to develop the building on the parcel near 24 Hour Fitness partly because of its proximity to the Colton Street entrance to the Wal-Mart store, which opened last month. That store, he says, is going to create quite a bit of traffic.

Heritage Properties has a long history of involvement with the Northpointe area, having handled the $6.8 million sale of the 103-acre parcel bounded by U.S. 2, Holland, Nevada, and Hawthorne Avenue, to First Western Development of Washington, the Lynnwood, Wash.-based developer of Northpointe Plaza, in late 1989. The 350,000-square-foot complex, which has changed ownership twice since then, occupies only about half of that site.

Braun says he expects construction of his new dental-office building east of Spears site to begin in about three months.

The single-story, brick structure should be completed by about next March, he says. He estimates the cost of that construction project at $800,000 to $1 million.

Chaffin says he doesnt know yet when construction of his dental center will begin, but he expects it to be completed by next March, when the lease on his current space expires. He says the building will be erected on land between the 102,000-square-foot Northpointe Office Building at 705 E. Holland and a smaller professional-office building at 765 E. Holland.

Chaffin says design details havent been worked out yet, but the building probably will be a two-story structure, with about 3,000 square feet of space per floor, and probably will cost $800,000 to $1 million to construct, he says. He says his dental clinic will occupy about half of the building, and he will lease out the rest. Spokane architect Jon Sayler is designing the building.

Space to fill

Despite the various looming construction projects, the Northpointe area currently has an oversupply of office space, due partly to the recent construction of a couple of larger office buildings there and the slow absorption of new space due to the economic slowdown.

Jeff Johnson, a commercial real estate veteran here and one of the top executives at Spokane-based Kiemle & Hagood Co., which has been involved extensively in the Northpointe area, estimates theres around 100,000 square feet of office space now or soon to be available there and that it could take a couple of years to fill that space.

Northpointe is a great area, but for an office area, its a neighborhood market, and therefore not likely to absorb more than about 25,000 square feet to 30,000 square feet of new space a year, he contends.

However, Vandervert, who has been responsible for much of the development activity behind Northpointe Plaza, says he thinks that the vacant new office space will fill up much quicker than that.

Market demand was going just great until 9/11, and it shut off for about six months after that, he says. It has picked up so much in recent weeks, though, he says, that he foresees most of the available space being leased up within a matter of months.

Concerns about the office-market softness led Edwards, Thompson, and Christenson to scale back their plans for the site they own on the east side of Nevada, and to reshape the project for a stronger retail focus. Edwards says the area continues to hold an allure because it is one of relatively few sites on Spokanes outskirts that has developable property with all of the utilities already in place.

You look around at how many places you can go. The action is right around that little hub. If this is where the party is, heck, were crashing the party, he says. The party may have slowed down, but I think its going to heat back up again. I think thats a good area. Weve just maybe got to crank it up a notch.

Kim Crompton
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