Renaissance had until Feb. 10 to present a palatable deal to Reugh but filed an extension, which now gives them until tomorrow, Feb. 18, to clean up some of the fine print. Most of that fine print has to do with how Renaissance plans to pay for the project. More specifically, says Earl Engle, a senior agent with Tomlinson Black Commercial Real Estate, the deal seems to be teetering on Renaissance's desire to complete and pay for the project in stages -- securing one building and renovating it, then buying the next and renovating that, and so on. Such a deal could minimize their risk if the project flops.
Should Reugh agree to that deal (and carry some of that risk himself), Renaissance envisions gutting the Rookery and Mohawk buildings and propping up a new structure to create around 95 chi-chi condominiums, stocking the street level with 21,000 square feet of retail space and plugging in some additional parking. Engels suggests that such a development could spur even further growth. Those 90-some new homeowners are going to need a grocery store, for instance. Or a dry cleaner's, or a new hair salon.
Sounds great for that oft-trumpeted mission -- the "continued revitalization of downtown." And judging by the success of urban housing providers like Wells and Company, and the recent lightning-round sale of RenCorp's downtown lofts in the old Luminaria building, there seems to be a clear desire for downtown living in Spokane. Add to that last year's record-breaking real estate sales throughout Spokane County, and you gotta figure these new Rookery condos are a slam dunk. Right?
Not so fast. There are reasons it's taken Reugh this long to get even this far, some sources suggest. When he proposed growing a 19-story office tower on the block, he couldn't find a risk-free offer, and the deal folded. When he decided to make the block a parking lot, it took flattening the historic Merton Building to get someone -- from California -- to make a bid.
ConoverBond prez Rob Brewster says that at $4.5 million, the Rookery property is "wildly overpriced." Brewster, who once offered $3.8 million for the property but was shot down, likens Reugh's insistence on $4.5 million to a "hostage situation."
"I don't think it's a ploy," he says, "But I certainly think it's known that the more he can get people up in arms about it, the higher the perceived property value goes."
Ron Wells, who did offer $4.5 million for the property but couldn't sort out the fine print with Reugh, is a little more zen. He says it's not the price tag that's scared local developers away (he calls $4.5 million "sensible"); it's the attitude. To sink that kind of money into the Rookery, he says, "You have to believe that there's a market for condos [more expensive] than anything anybody has yet sold downtown."
That kind of thinking -- build a lot of swank penthouses in downtown Spokane and hope the yuppies start pouring in -- could be too great a leap for local developers to make.
"I guess that's why no one in the community bought [the property]," says Craig Stevens with Renaissance. "So I guess we're the dumb guys from L.A."
If Spokane can't believe in Spokane, maybe the Californians can.