Report concludes redevelopment too costly
SPOKANE, Wash. – A report on the Washington State University-owned Jensen-Byrd building by SERA Architects of Portland concludes that current market conditions are not favorable for profitable redevelopment of the Spokane building, and that the structure has a number of physical constraints that rule out some types of adaptive reuse.
University officials will hold a public information session Oct. 27 to present and discuss the full findings of the report. Representatives of the consulting firm will attend.
As part of planning for private development of the Pine Street Project, a five-acre WSU property on the Riverpoint Campus in Spokane’s University District, the university selected SERA to conduct a facility assessment of the building. The economic development analysis was conducted by E.D.
Hovee and Associates, of Vancouver, Wash.
The report evaluates existing architectural and structural conditions for the original 1909 six-story brick structure and the two-story 1910 addition. The potential for redevelopment was examined with a real estate analysis specific to Spokane’s market conditions, examining several possible uses for the building.
The consultant’s conclusion is that none of the four options examined in detail-condos, apartments, retail, and commercial office space-comes close to breaking even under current market conditions when development costs are included. The smallest loss identified in the analysis was just over
$3.5 million if the structure were redeveloped for apartments, based on the assumption that low-income housing tax credits and historic tax credits would be available.
The report concludes the loss would occur even if WSU were to receive zero return for the underlying land – an option incompatible with WSU’s fiduciary responsibility for public resources.
Mixed-use developments with some combination of these four uses would be expected to show similar funding gaps, the report concludes.
Other potential uses investigated, but abandoned due to the building’s physical constraints, include classrooms, storage, and academic offices.
The building also does not appear to be suitable for renovation into clinical or research spaces.
According to the report, the building’s low ceilings and tight column spacing present challenges to any of the redevelopment concepts. The building’s sheer size, in a market that already has significant redevelopment activity and somewhat sluggish leasing rates on existing office and retail space, creates a further challenge in filling the building with tenants.
Due to the low level of pedestrian activity in the immediate area, the report holds that reuse of the Jensen-Byrd Building will be most successful if developed in conjunction with a plan encompassing the entire five acres.
The building was recently leased back to Jensen Distribution to use for storage on a short-term basis. WSU has no plans to move forward with any specific actions concerning the building in the near future. The university is still in negotiations with Riverpoint LLC concerning overall development of the Pine Street Project that includes the building, but no commitment has been made by either party.
A complete copy of the report is available at http://www.spokane.wsu.edu/aboutWSUSpokane/PineStreetProject.asp.