by Ann M. Colford

Across the country, cities both large and small are seeing a resurgence in downtown living. The tide of movement from cities to suburbs that dominated the second half of the 20th century is not over by any means, but more and more Americans -- young singles, comfortable empty-nesters, creative people of all stripes -- crave a more urban lifestyle with restaurants, shopping and entertainment all just steps from one's door.

Spokane's downtown, with its marvelous stock of turn-of-the-century office buildings and industrial structures in close proximity to Riverfront Park, seems ready-made to attract new residents. But until very recently, market-rate downtown homes were rare. Wells and Company got the ball rolling with the restoration of apartments like the San Marco, the Myrtle and the Edwidge at the western edge of downtown a decade ago. Then urban pioneers like Jim Kolva and Pat Sullivan, Chris O'Harra and Ron and Julie Wells made the choice to live downtown, despite the lack of available for-sale housing, by developing their own projects. The words "downtown" and "housing" began to be seen together in polite society without raising too many eyebrows. A number of developers talked about loft spaces and other types of residential units, but supply has been slow to catch up to the perceived demand. If downtown living is so hip, why do so few apartments and condos exist here?

A primary reason is money. Lenders are a notoriously conservative bunch -- and rightly so, many would argue. Because of a lack of comparable projects for gauging potential success, most lenders are reluctant to finance a project that's the first of its kind in the community. Financing thus perpetuates a chicken-and-egg syndrome: because there's no supply of market-rate housing downtown, developers can't prove to lenders that the demand exists; without that proof, lenders won't finance a breakthrough project.

The Downtown Spokane Partnership (DSP) believes that demand for such housing exists, but, like the developers, they were unable to prove it. So the group helped sponsor a study last winter to quantify the residential market potential of downtown Spokane. Zimmerman/Volk Associates of New Jersey, which conducted a similar analysis for the city of Louisville, released the report at the end of February, showing demand for at least 300 units -- either apartments or condominiums -- per year for the next five years. Finally, area developers had something they could take to the bank.

"The study was done to boost investor confidence," says Michael Edwards, president of the DSP. "In lieu of comparables, banks have accepted the results of the study as proof of demand."

Even though few market-rate housing units are available today downtown, more are in the pipeline as lenders begin to get over their fears. Rob Brewster has housing units on the drawing board at the Montvale building on West First Avenue and the new Havermale development on the east end of downtown. Housing is also part of preliminary plans for redevelopment of the University District and the Rookery Building.

Closer to completion are the Blue Chip Lofts on Railroad Avenue directly behind Kolva's project, where the condominium units were all sold before construction began. Doug Menzies, one of the architects on the project, says he expects the first units to be ready for occupancy sometime this fall.

Just down the street at the Railside Center, Doug Smith has six studio-plus apartments in progress above the Bitters art space. The units will range from 620 to 780 square feet with air conditioning, gas heat and wiring for high-speed Internet and cable.

"We're getting ready to start closing them up, so we're looking at occupancy around September 1," says Smith, adding that demand has been strong. "I've got four out of six tentatively rented."

Smith also just received approval for a live-work space next door above the Brooklyn Deli. Thanks to a recent change to Spokane's building code, developers may now create combined residential and studio space for artists who work with open flame, like sculptors.

"That one little change makes a big difference, because now all sorts of artists can use the space," Smith says. "We'll have a one-bedroom apartment at about 850 square feet plus an office and about 500 square feet of workshop area."

Smith says he thinks the report prepared for the DSP will help developers who want to create downtown housing, and not just in the realm of financing. "It gives us a target, a guideline for what we can expect the market to bear, so we know what we need to develop," he says. "The developers as a group need to look at this and work together to not oversaturate the market."

Publication date: 07/24/03

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