The Future of the Former South Regal Lumber Site

8-acre Retail/Commercial Property Planned on Former South Regal Lumber Site. Developers to present plans to Neighborhood Council on January 13th.

Through the summer the neighborhood could hear the sound of jackhammers and rock crushers processing over 40,000 cubic yards of basalt and bedrock to level the former South Regal Lumber site for future commercial development. South Regal Lumber shut its doors at the end of 2014 and demolition and grading of the 8-acre parcel began in earnest last spring. The developers are now planning to move on to the construction phase of the project starting in 2016.

The Plan

In 2013 Cyrus Vaughn consolidated the ownership of the parcels along Regal Street between 53rd and 55th Ave. and successfully petitioned the County for zoning changes to allow commercial development of the entire 8-acre area. The new proposed development, Regal Commons, has been marketed to potential tenants and businesses for over a year by local broker Sperry Van Ness Cornerstone. Their website shows renderings of the potential development and highlights such features as “12 Apartment communities within a quarter mile” and “Lighted Intersection at 53rd & Regal with 26,000 cars per day.” Potential tenants are listed as grocery, drug or hardware stores; restaurants, coffee shops and offices are also listed.

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A plan view of Regal Commons from SVG cornerstone’s website. Regal Street is on the left. Main tenant is identified as a 25,000 sqft. grocery store.
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Rendering of the proposed Regal Commons site from SVG Cornerstone’s website
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Elevation and detail view renderings of the proposed Regal Commons site as designed by local architects Nystrom-Olson.

Articles in the Journal of Business highlight developer’s interest in Southgate as the next major development region in Spokane. In April 2015 Guy Byrd was quoted by the Journal as saying,”the next major commercial growth area likely will be along the Regal Street corridor on the upper South Hill, especially from 44th Avenue south to 57th Avenue.” He also opined about the future of the KXLY site further north on Regal Street, “The site…is being planned as a lifestyle center that would have up to 100,000 square feet of commercial development with residential components, similar to Kendall Yards, northwest of downtown, or Riverstone, in Coeur d’Alene.”

In June 2015 Byrd was again quoted by the Journal of Business regarding development on South Regal, this time specifically related to specialty grocery stores like Natural Grocers and Whole Foods. From the article: “I think you’ll see these types of grocers on Regal,” he says. “The South Hill has a good demographic for their users. That’s where people with higher socioeconomic income are concentrated.” The article discussed the new Trader Joes and Natural Grocers stores along North Division and discussed the entry of the last major brand in category, Whole Foods, into the Spokane market.

With the economy improving, the eyes of the local commercial and high-density residential developers are falling squarely on our neighborhood. 2016 is shaping up to be a very busy year with KXLY, Regal Commons, and the Palouse Trails Apartments in various stages of development.

Getting in the Zone – Annexation’s Effect on the Development

In March of 2015, the Spokane City Council accepted the request of Spokane Housing Ventures to be annex their three apartment complexes along 55th Ave into the city. The Council, following city policy, expanded the annexation area to include adjacent properties to avoid creating a spot annexation surrounded on three side by County land. In December, the Spokane Plan Commission held its second workshop on the proposed annexation of this property and other adjacent parcels between 53rd and 55th Ave. from Regal Street to Palouse Hwy. Under consideration was the zoning designation of the parcel as it is brought into the city. Currently the property is zoned “Mixed-Use” under the County, the city of Spokane is considering either Community Business or Center and Corridor (CC2) for this property.

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The proposed zoning of the annexed parcels preferred by Southgate Neighborhood Council

Southgate Neighborhood Council provided comments and testimony at the hearing in support of the CC2 designation since it more closely aligns with the intent of the County Mixed-Use zoning and the goals of the Spokane Comprehensive Plan and Southgate Neighborhood Connectivity Plan. As noted by the developer, there are 12 apartment complexes within a quarter mile of this property (including 360 new apartments along 55th Ave. alone). The proximity of such high density housing makes this property a perfect candidate for a pedestrian-oriented mixed-use development that can provide services and amenities to the thousands of residents within walking distance.

Presentation to Southgate Neighborhood Council

The City Council will be considering approval of the annexation in late January/early February, so there are opportunities for Southgate to provide more input to our representatives while they make their decision. The developers of Regal Commons are currently opposed to the Center and Corridor zoning designation, but they are coming to the Southgate Neighborhood Council meeting on Wednesday, January 13th to present their current plans and discuss them with the neighborhood. I strongly encourage area residents to attend the meeting to learn more about the future of this major commercial project and provide their input directly to the developers. A consistent, open dialogue is the best way for all parties to support each other and the smart growth of our neighborhood.

KXLY Development Plans Going Into Motion

KXLY is proposing to purchase 2 acres of city-owned land along Regal Street as part of their plans to develop their part of the Southgate District Center. This sale proposal and what it means for our neighborhood will be a major topic of our November meeting. Below you will find some background information as well as copies of the latest version of the proposed sale agreement (PSA) and drafts of KXLY’s larger proposal for a land swap involving the Southeast Sports Complex.

Background on The District Center

Just to refresh everyone’s memory, KXLY owns 15 acres of land on the west side of Regal Street across from the new Target center and south of the Southeast Soccer Complex that is part of the Southgate District Center. They also own an additional 15 acres of land behind their property on Regal that has their broadcast tower located on it (this will be important in a minute). Their District Center parcel is subject to a Developer Agreement with the city passed in 2009 that allows them to build a big box store up to 108,000 square feet (for reference, Shopko is about 95,000 sqft) and the property is zoned Center and Corridor 2 (CC2), just like Target.

An overview of the Southgate District Center with the KXLY properties highlighted.
An overview of the Southgate District Center with the KXLY properties highlighted.

Background on the Proposed Sale

Directly to the north of KXLY’s property along Regal lies a small 2 acre parcel that was formerly owned by District 81. In 2013 this land was swapped for 20 acres of city-owned land by Joe Albi Stadium. Now the KXLY is proposing to purchase the 2 acre parcel from the city in order to gain easier access to their District Center property from the new stoplight at Regal Street and Palouse Hwy.

The Southgate Neighborhood Council was approached in September by Council President Ben Stuckart to provide some conditions to the Purchase and Sale Agreement (PSA) to help ensure the deal furthers the development of our District Center consistently with Spokane city ordinances and helps implement the Southgate Neighborhood Plans developed a few years ago. The SNC Land Use Committee proposed the following conditions (Section 7.3 of the PSA):

  1. The Southgate Neighborhood’s appeal settlement (in the form of an ISP Implementation Memo) for the right-of-way design in the District Center be finalized prior to the sale of the land to KXLY.
  2. Development of this property is subject to the notification provisions recent adopted by the city and that our District 2 city council members be notified as well.
  3. The property be zoned CC2 (currently it is zoned single-famiy residential) to match the rest of the Southgate District Center.
  4. The property would be subject to the existing KXLY Developer’s Agreement.
  5. The property would be subject to the terms of the Integrated Site Plan for the District Center
  6. Any access road or easement across the property be set back from Regal Street 250′-300′ to help create an urban scale block (no frontage road style design)
  7. The city will set aside $300,000 of the sale price for further development of multi-use trails in the conformance with the Southgate Neighborhood Connectivity Plan
  8. KXLY agrees to substantive input/collaboration with the neighborhood on site plans, infrastructure, public realm, and architecture related to the ISP or Southgate Neighborhood Plan.

The buyers (KXLY) were also able to supply conditions to the sale and their included (Section 7.1 of PSA):

  1. Land Use Approvals that included a zoning change from residential to commercial, “authorizing use and development of the property generally and substantially consistent with the approvals previously recorded” in the Developer’s Agreement, ISP. KXLY, “reserves the right to determine whether mitigation is reasonable or consistent with the … development agreement.”
  2. KXLY will have obtained an easement from the City of Spokane Park Board for pedestrian, vehicle, and utility access to the intersection at Regals Street and Palouse Highway.

Since late September the city, Southgate Neighborhood Council, and the developers have been ironing out the wording and details of the Purchase and Sale Agreement. We will discuss this in detail at the Southgate Neighborhood Council Meeting on Wednesday, November 11th. Please plan on coming to listen to the details and provide your thoughts on this proposal.

The Next Steps and Land Swap

As mentioned above, KXLY has proposed an easement across the Southeast Sports Complex as condition of the sale of the city land (meaning if they can’t get the easement, they don’t have to buy the land). This easement is a critical component of KXLY’s plans for developing their property in the District Center. It provides them signalized access to their property and will provide easier access to the businesses in their development. It is also the first step in a larger proposal they made 21 months ago to the Spokane Park Board for a larger land swap along Regal Street.

In January 2014, KXLY’s architect and lawyer presented a draft proposal for a land swap wherein KXLY would take control of the eastern part of the Southeast Sports Complex (along Regal Street and 46th Ave.) and swap the Parks Department for some of the land behind their District Center property (under the radio tower). See, I told you that other property would be important.

Image of the draft land swap proposed by KXLY to the Park Board in January 2014.
Image of the draft land swap proposed by KXLY to the Park Board in January 2014 with proposed land purchase and easement in place.

The vision of KXLY is to add more commercial property from the corner of 46th heading south along Regal into their property. They provided a letter of intent to the Park Board to enter into discussions about this plan and it was adopted by a resolution passed by the Park Board at their meeting in January 2014. Now a swap would likely take the form of a sale or long-term lease, both of which the Park Board (and city law) saws require a vote of the people of Spokane. This concept would also require a land use amendment since the park land is zoned single-family residential and would have to be converted to some form of commercial zoning.

So as you can see, this land sale and easement are the first two dominoes that set the stage for some rather drastic changes to the current makeup of our neighborhood, especially our largest park. I encourage you to read the proposed sale agreement and to attend the November Southgate Neighborhood Council Meeting so we can start this process off on the right foot and make sure the development plans are appropriate based on the guiding laws and policies of Spokane.

37th Avenue Rehabilitation/Water Main Project

Last Thursday the City of Spokane Engineering Department held an open house at Chase Middle School to discuss the upcoming 37th Avenue Rehabilitation and Water Main Project. Starting in April 2016, the city will install a 36″ water main from Regal Street to Havana Street, repave the entire length of 37th, add sidewalks and bike lanes to both sides of the road. The project also includes improvement of stormwater management from the Hazel’s Creek area the city-owned empty lot at Rebecca and 37th (see rendering above).

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The city has started a blog for this project where you can see all the details and leave comments for the city. You can also send your comments to Julie Happy at the city.

Comment Period Open for “Palouse Trails Apartments”

There is a new 114-unit apartment complex being proposed for Southgate and the SEPA comment period is open till Wednesday, September 23rd. The Palouse Trails Apartments are designated low-income housing with all the units being available for people making 50% the local median income. It is being developed by Whitewater Creek, the same group that is developing the 360 apartment units on 55th Avenue. It is projected that this project will generate 758 new trips on Palouse Hwy. with 60% headed toward Regal Street and 40% going towards Freya Ave.

Palouse Trails - Site Plan

The SNC Land Use Committee submitted comments related to project connectivity and possible impacts to the Palouse Hwy. Crosswalk project that will connect Copper Hill and Clareview to the Target site. The developers responded to our comments by saying they will continue the 12′ wide bike/pedestrian trail that runs along the north side of the Target site for the full length of their project’s frontage. I encourage neighbors to look at the project’s SEPA application and site plan (see above) and submit their own comments to the city. Comments can be sent to John Halsey at the City of Spokane at jhalsey@spokanecity.org. If you have any questions, please leave a comment and we will try to address them.