Pieces finally in place for Spokane’s University District to become innovation hub

It’s taken Spokane city leaders, academics and businesspeople 30 years to piece together what the Brookings Institution calls the keys to “innovation success” at the eastern end of downtown: a cluster of universities, businesses and technology and creative startups.

Keri Rhodes, for one, is glad they did.

Rhodes, 29, moved to Spokane from Seattle in 2013 to become the marketing director at Etailz, a successful e-commerce and marketing company based in the city’s growing University District.

“It’s a place where I can grow my career,” Rhodes said of Etailz, which employs 165 people in Spokane, mostly in her age group. They work inside the McKinstry Innovation Center, a refurbished historic rail building located in a scenic spot along the Spokane River.

“I feel like we are physically in a good place,” she said.

And with a lower cost of housing in Spokane than in larger cities, Rhodes said she and her husband, Chase, a schoolteacher, are in a position to have what every young family wants: a house in a nice neighborhood and good jobs.

Etailz was founded in 2008 based on a business plan developed by CEO Josh Neblett in an entrepreneurship class at Gonzaga University.

It’s the kind of higher-ed-related spinoff that’s long been the goal of University District supporters, who see a powerful economic engine in the interplay between the district’s colleges and universities, private companies, health care entities and creative startups.

“Innovation districts” are much in demand in the United States and internationally, the offspring of early tech-oriented communities like Silicon Valley that featured corporate campuses grouped in suburbs, accessible by car. In contrast, innovation districts are more compact, served by transit and offer a mix of housing, office and retail space. They’re “the manifestation of mega-trends altering the location preferences of people and firms,” the Brookings Institution study said, and they can help a city address issues including a lack of good jobs and sprawl.

And while it may be trendy, it’s been a longtime vision of local community leaders.

The idea in Spokane dates back three decades, originally conceived as a way to establish a greater college presence and to diversify an economy too dependent on mining, timber and agriculture.

Buildings were erected as funding became available from the state, and in 2009, the city created the 770-acre University District that’s bordered roughly by Interstate 90 on the south, Division Street on the west, Gonzaga University on the north and the Hamilton Street corridor on the east. Seed money for development comes from a portion of sales and property taxes collected within the district and $250,000 a year in state matching funds, both over 25 years. Since 2004, over $740 million in public, private and institutional investment has taken place in the University District, according to the University District Development Association.

Dave Clack was part of a group that envisioned the University District in 1987, and he’s still nurturing the ideas he helped start, especially “to engage the medical community in an enhanced way and marry it to research,” he said recently.

With two medical schools in the district, “The potential is huge,” he said. “Things are going to start happening.”

Karl Otterstrom, board chairman of the University District Development Association, said the momentum is building.

“I think it’s a fair statement that there’s a big pivot right now on the University District,” he said. “I think it’s happening, and I think what we’ll be seeing in the next several years is an acceleration of that.”

‘Smart-city’ tech proving ground

It’s taken decades to get here, but what does it mean?

A research project out of a Washington State University materials lab in Pullman is a good example.

The project has focused on turning unwanted wood into a marketable commodity, and the result is about to enter the commercial market for building construction.

The product, known as cross-laminated timber, can be used as a major structural component in new “smart” buildings up to 16 stories tall, said WSU associate professor Todd Beyreuther, who has been working on the project but is leaving the university to head up the marketing of the emerging commodity.

A venture capital company called Katerra is backing the commercialization, which has benefits for the wood products industry in the region.

It is also seen as being environmentally beneficial because the product makes use of carbon from trees in a sustainable way.

The research behind it has been a major effort of the WSU Composite Materials and Engineering Center.

“It’s really about the tech transfer of getting something out of the lab in Pullman and into the urban communities of Spokane and Seattle,” Beyreuther said.

Vaagen Brothers Lumber Inc., of Colville, is a private-sector partner in the project.

But the University District’s biggest player, of course, is the expanding presence of medical and life sciences education – and their related research and development.

“It all starts with a medical school,” said Rosauers CEO Jeff Philipps, who has been working with business and community leaders to develop the U District.

Sixty incoming medical school students are now on campus at Gonzaga University in a collaboration between GU and the University of Washington.

At the same time, WSU is working on accrediting a second medical school in Spokane, which should have 60 students by 2017.

Those students and their professors may bring a whole new era of research and tech transfer in coming years, U District leaders said.

The effort is already paying dividends to the community, with a new medical residency program opening with nearly 70 slots for new doctors under a cooperative program of WSU, Providence Health Care and Empire Health Foundation. A $16 million Spokane Teaching Health Center opened in the U District in August and could have up to 35,000 patient visits a year.

And WSU Spokane last month announced a $10 million federal grant for research into the prevalence of high blood pressure among specific ethnic groups, with WSU professor Dedra Buchwald of the Elson S. Floyd College of Medicine one of two scientists leading the project. Buchwald moved her Initiative for Research and Education to Advance Community Health from the University of Washington to the new WSU medical school last year.

“I’m thrilled that our faculty are leading cutting-edge research projects that will have such a real impact on people’s lives,” Floyd College Dean John Tomkowiak said in a news release.

Just last week, a group that includes Avista, the city of Spokane, Itron, McKinstry, WSU and the University District Development Association announced a name for a collaboration – Urbanova – that’s using the University District as a “smart-city technology proving ground.” Among the projects included in the collaboration are a “smart streetlight” installation that controls streetlights for energy efficiency; a shared-energy experiment involving businesses, WSU and the Pacific Northwest National Laboratory; and a five-year initiative to create a framework for monitoring, predicting and controlling energy and air quality in an urban environment.

Otterstrom, of the University District Development Association, said Urbanova is “about testing and deploying new technologies. When people talk about ‘smart-city’ technology, they’re talking about infrastructure that includes data gathering. There are ways to assemble that data and make decisions about it.”

The kind of group effort behind Urbanova is the future of the University District and other innovation districts, Paul Umbach, an expert in economic transformation of cities, said at a Greater Spokane Incorporated meeting in Spokane recently.

“People and place have to come together for a purpose. Collaboration is the secret sauce.”

Planner says more housing is needed

Being an attractive place for new workers, especially those with college degrees and advanced skills, is important to success in an innovation district, experts said. The Brookings Institution describes the ideal innovation district as well-designed, amenity-rich and authentic.

River access, trail development and potential transit improvements are all part of creating an inviting urban space, community leaders said.

A Central City Line for transit, if approved by voters in November, would provide faster and more efficient bus service through the U District, from Browne’s Addition to Spokane Community College.

Still needed are more residential units in the U District to support an expanding selection of restaurants, coffee shops and retailers, leaders said.

Jim Kolva, a land-use planning consultant, said he believes the most logical place for new downtown housing is in older buildings west of Division Street. A recent housing study by the Downtown Spokane Partnership showed that there would be enough market demand for 2,500 units west of Division downtown and another 2,200 units in the University District.

A proposed $10 million pedestrian bridge over the BNSF Railway tracks near Sherman Street will connect the central portion of the University District with East Sprague Avenue, an area that’s seen as ripe for economic development because of its proximity to downtown and the U District. Construction of the bridge should begin next year, with completion in 2018.

University District leaders said the Sprague corridor eventually could be home to spinoffs from research and product development, with its older buildings that impart character to a redeveloping community.

Avista Corp. earlier this year purchased a $1 million parcel at Sprague and Sherman as an investment for future growth, according to company spokeswoman Debbie Simock.

Doug Trudeau, of Trudeau Marine, 304 E. Sprague Ave., said business and property owners are mainly in support of the University District having a presence along the East Sprague strip. But there’s some concern that development there might affect existing businesses, making it more difficult for them to continue what they are doing.

“We have to be cautious not to displace the businesses that are here,” Trudeau said.

Otterstrom, of the University District Development Association, said the U District’s future depends on all the pieces of the puzzle that have helped create it working together.

“I don’t know if it’s any one piece as it’s a sustained effort among all the players,” he said, referring to developers, existing businesses, government, higher ed and startups. “That sustained effort will draw more people into the conversation and the investment.”

He added, “There’s a virtuous circle of activity and energy; sustaining that energy is really important.”