Spokane Journal of Business

Project on KXLY site poised to start

Grocer first to commit to South Hill shopping center

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-—Bernardo|Wills Architects PC
Developers envision seven commercial structures, including a 48,000-square-foot grocery store at a shopping center tentatively named KXLY South Complex.

A broadcast media company and a pair of Spokane commercial real estate brokers are teaming up to develop a retail center on 17 acres of land on the upper South Hill.

Carl Guenzel, a broker with Kiemle & Hagood who is involved in the project, says the developers hope to break ground this spring on the project, which is tentatively named the KXLY South Complex. It will be located on the west side of south Regal Street, across that street from the Regal Plaza shopping center and adjacent to the Southeast Sports Complex.

The value of the completed development likely will exceed $40 million, Guenzel says.

Guenzel and Kiemle & Hagood designated broker and chairman Tom Quigley are working with QueenB Radio Inc. to develop the shopping center.

KXLY, a Spokane radio and TV broadcasting company, is an affiliate of QueenB Radio Inc., which is a subsidiary of Madison, Wis.-based Morgan Murphy Media Co.

The developers hope to start site work in April or May and to begin constructing the commercial buildings in the fall, he says.

As envisioned, the KXLY South Complex will have seven commercial structures with a total of 180,550 square feet of retail space, he says. Initial site plans show 848 parking stalls throughout the development with 26 of them facing Regal Street in front of two multitenant retail buildings.

Guenzel says the development will be constructed in two phases, with the first phase to include four buildings, three of which will front Regal Street.

A grocery store has committed to anchor the first phase of the complex, he says, adding that a national-brand restaurant, a financial institution, and a few smaller retailers are showing strong interest in leasing space there. 

The 48,000-square-foot grocery store will front Regal at the southeast corner of the retail center, Guenzel says. He declines to identify the tenant, but says it’s not new to the Spokane market.

“They’re not on the South Hill either, so they’re super excited about it,” he says.

While the developers have had some contact with other potential tenants, Guenzel says they haven’t begun marketing the shopping center yet.

“We’ve been focusing on development before really going out and hitting the streets,” he says.

The initial designs are scheduled to go before the city’s plan review board on Jan. 25.

Bernardo|Wills Architects PS, of Spokane, is designing the development, and Yost Gallagher LLC, of Spokane, will be the contractor, Guenzel says. 

The Spokane office of Seattle-based Coffman Engineers Inc. is performing the civil engineering.

Civil work, which will include constructing infrastructure and site improvements, currently is out to bid, Guenzel says.

As part of the development, QueenB Radio has negotiated with the city of Spokane to acquire a 2-acre, city-owned parcel of land at the northeast corner of the KXLY South Complex site for $900,000.

Guenzel says that land transaction is expected to be completed by mid-March.

The developers also are obtaining an easement from the Spokane Parks Department on which they intend to construct access and egress lanes in line with the Palouse Highway at the signaled junction with Regal Street, he says.

In exchange for the easement the developers have vowed to construct a soccer field adjacent to the west edge of the commercial development.

The developers also will increase and maintain parking adjacent to the sports complex and pay design costs for a pedestrian trail along the north side of the commercial complex, Guenzel says. The trail will link to a trail system at Regal Plaza, where it meets Regal Street at the Palouse Highway junction.

“It’s going to be a very pedestrian-friendly shopping center with extra-large sidewalks all the way around,” Guenzel says of the KXLY South Complex. “There’ll be lots of outdoor seating and cool storefronts.”

Interior streets will be constructed in a grid system similar to city blocks, he says.

“It’s going to be different than what’s been build up there before. It’s got a city-corridor look,” Guenzel says. “We want it to feel somewhat urban.”

Guenzel says the developers are working with the Southgate neighborhood to ensure the development fits the community.

“We brought them in at the very beginning,” he says. “The Southeast Sports Complex is such an asset for the South Hill, and we feel this shopping center is going to be part of that.”

Ted Teske, chairman of the Southgate Neighborhood Council, says the developers have been proactive in sharing their intent with the neighborhood.

“They have been coming to us for over a year to talk about the process and about what they’re doing,” he says. 

Now that the initial design is set to go before the city’s design review board next week, Teske says several Southgate residents are preparing to comment on the project with a focus on whether it has adequate pedestrian access and emphasis.

“We haven’t come to a consensus yet,” he says. “Overall, I’m encouraged by some of the features as far as addressing Centers and Corridors design standards. It will lead to a more cohesive feel.”

The city’s comprehensive land-use plan designates certain areas where residential and commercial uses meet as Centers and Corridors. The designation is intended to promote buildings oriented to the street with parking behind buildings, safe pedestrian environments and amenities, and smaller blocks with narrower streets and on-street parking.

Mike McLean
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Reporter Mike McLean covers real estate and construction at the Journal of Business. A multipurpose fisherman and vintage record album aficionado, Mike has worked for the Journal since 2006.

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