Spokane Journal of Business

South Hill projects to move ahead

Home Depot to start rising next spring; chains such as PetSmart, Old Navy eyed

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Following a long and contentious battle with residents on their plans for a group of retail developments on the South Hill, developers say they expect to move forward soon with those envisioned projects.

Home Depot Inc. hopes to start construction next spring on its planned store southeast of the ShopKo Stores Inc. outlet at 44th Avenue and Regal Street, and expects to open the outlet six months later. Meanwhile, Spokane real estate executive Dave Black is starting to market aggressively land he owns near the southeast corner of the intersection of Regal and Palouse Highway, and says he has talked with representatives from national retail chains such as Target Corp., PetSmart Inc., and Old Navy, among others.

On June 30, the Spokane City Council approved plans for those two controversial developments, as well as one proposed by Spokane Radio Inc. for parcels located on the west side of Regal near the Palouse Highway that currently are zoned for residential use. In response to opposition from South Hill residents, the council restricted the developments to include only three big-box stores exceeding 100,000 square feet of space and said that smaller retail buildings couldnt exceed 60,000 square feet of space. The council also required developers to agree to build bike and pedestrian routes, to preserve views, to adhere to a consistent design theme for buildings and landscaping, and to participate in creating a storm-water collection system, among other stipulations.

Last week, Mayor Mary Verner said she was considering vetoing the councils decision to increase the size of the smaller retail structures to 60,000 square feet of space from 40,000 square feet. Verner then announced last Friday that she had decided against vetoing the decision, and instead would send the ordinance to the clerks office without her signature.

City officials and developers are working on an agreement that will include design details for the proposed retail developments. The developers hope to finish the agreement soon so that they can submit it to the City Council for final approval next month, says Gary Bernardo, of Spokane-based Bernardo-Wills Architects PC, who is designing the planned Home Depot store.

Home Depot is waiting for the City Council to approve the development agreement before it begins final design work on the project, Bernardo says. The store, which likely will employ between 120 and 150 workers, is expected to include 105,000 square feet of floor space, plus a 28,000-square-foot outdoor garden area, he says. An estimated cost of the project isnt ready to be released yet, he says.

Home Depot agreed to design its 16-acre site in such a way that it will be able to accommodate more dense development in the future, he says. It also has set aside land on the site for storm-water management and pedestrian amenities.

The neighborhood said they want a denser, more urban development with mixed-use projects, Bernardo says. We dont think the market will support mixed-use right now, but we have set aside areas on the site so that at such a time when the market does support it, it wouldnt be precluded because we (had) put a building in an area that would be the most likely candidate.

Meanwhile, Black, who has talked with Target about building a 135,000-square-foot store on his 15-acre site, says now that the council has approved a comprehensive land-use change, he can launch a full-scale marketing effort. He says that in addition to PetSmart and Old Navy, he has talked with retail chains such as Barnes & Noble Inc., Borders Inc., Michaels Stores Inc., Ross Stores Inc., and T.J. Maxx about opening outlets on the property. Those stores all would meet the 60,000-square-foot size requirement, he says.

Black also is interested in finding smaller, local and regionally-based tenants to open stores there, such as movie theaters and health clubs. He says a cost to develop the property hasnt been established yet, and that construction likely wont start until 2010 at the earliest.

Steve Herling, executive vice president and general manager of the KXLY Broadcast Group, couldnt be reached for comment regarding Spokane Radio Inc.s plans for its site. That company, which operates KXLY-AM and other radio stations, owns roughly 30 acres of land along the west side of south Regal, 15 acres of which were included in the recent comprehensive plan land-use amendment, says Black, whose company, Black Development, represented Spokane Radio in its comprehensive land-use change application to the city.Development agreement

Included in the development agreement that developers and the city are working on will be plans for bike and pedestrian routes and a community gathering place that would be located on one of the three parcels, Bernardo says. It also will include an integrated site plan in which the developers will agree to coordinate the architectural design, street furniture, landscaping, and connectivity features, such as sidewalks, of their projects. Additionally, developers will agree to submit their projects to the city for a special design review prior to applying for building permits, he says. That review will subject the projects to tighter standards than those included in the citys building code. The applicants have proposed that the design review committee include a neighborhood representative, he says.

In terms of traffic issues, which represented some of the residents biggest concerns, the agreement also will provide that developers mitigate possible traffic impacts by widening the intersection of Regal and Palouse, installing a stop light there, and adding curbs, gutters, and sidewalks, Bernardo says. Changes to the intersection likely will include adding a turning lane, but the final design of the intersection project hasnt been completed yet, he says. Developers might need to meet additional traffic mitigation requirements, such as those under the Washington state Environmental Policy Act, when they apply for building permits, he says.

Black says the developers have agreed to a voluntary impact fee that they would pay based on the increased traffic that their developments would generate on neighboring streets. The fee amount hasnt been determined yet, but could be in the seven-figure-range, he says. It would help fund projects in the citys six-year street plan, Black says. The city of Spokane is considering enacting traffic-related impact fees citywide, and if it does, the developers wouldnt have to pay both fees.

In terms of storm-water issues, the developers have agreed to participate in whatever storm-water system the city decides to create for the region, he says. Black Development has proposed an idea for a project that would link Spokane city- and county-operated drainage systems in a park-like network and provide additional storm-water storage for development on the Moran Prairie.

The project would involve creating a storm-water storage pond on a 16-acre portion of Spokane Radios property. The site is being called Radio Park because two transmission towers would remain there if the project proceeds. The storage pond would connect to two 6-acre evaporation ponds that the county operates nearby, as well as to a nearby 20-acre drainage site, called Hazels Creek Regional Drainage and Conservation Area, that the city operates and plans to expand. As part of a network that would include city and county storm-water facilities, the park would meet the storm-water needs of the three proposed developments as well as further development on Moran Prairie.

We have agreed to participate in that, or in an alternative, innovative regional drainage solution, Black says.

Contact Emily Proffitt at (509) 344-1265 or via e-mail at emilyp@spokanejournal.com.

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