URM Stores Inc., the Spokane-based grocery distribution cooperative, is considering moving ahead with construction of a long-postponed, multimillion-dollar building on the West Plains for Peirone Produce Co., which it owns.

Dean Sonnenberg, URM's president and CEO, says the office-warehouse building would include about 75,000 square feet of floor space and would be developed on a 10-acre site that Peirone Produce owns on the south side of Interstate 90 near the Medical Lake interchange.

The site is just east of the interchange, next to an Inland Power & Light Co. complex.

Peirone Produce has been located for more than 40 years in a building at 524 E. Trent that has about 29,000 square feet of warehouse space and a mezzanine level with about 2,500 square feet of office space. The company supplies fresh fruit and vegetables to retail and institutional customers throughout the Inland Northwest. Joe Peirone founded the company here in 1946 and sold it to URM in 1986.

URM has been looking at design plans for the proposed Peirone Produce building and expects to present its findings at a Dec. 10 board meeting, along with construction bids it has been gathering for a separate, earlier announced large expansion of URM's warehouse and distribution center, Sonnenberg says.

The latter project would add about 150,000 square feet of space to URM's 675,000-square-foot facility at 7511 N. Freya.

Sonnenberg says, though, that, "With the current financial turmoil going on, we might just wait awhile and see how things settle out" before proceeding with either project.

"Business has been solid," he says, but adds, "We think it's going to get worse before it gets better, plus we're going to have some (added) competition with WinCo coming in."

Boise-based WinCo Foods Inc., which operates 61 grocery stores in five Western states, plans to open two large stores in the Spokane area—one that's being constructed at 9257 N. Nevada and the other in the former HomeBase Inc. building in Spokane Valley. It recently secured a building permit to renovate the latter building.

URM is a retailer-owned company, meaning that its shareholders are retail grocers who also are its customers. It owns the Rosauers chain, Huckleberry's Natural Markets, and four Super 1 Foods stores.

It and its stockholders together operate 155 stores under the Rosauers, Super 1 Foods, Yoke's Fresh Mark, Family Foods, and Harvest Foods banners, among others, as well as Bonner Foods Inc., which acquired three Tidyman's LLC grocery stores and renamed them Trading Co. Stores Food & Drug.

URM and its customers' stores are spread across Eastern Washington, North Idaho, Montana, and northeast Oregon. Its nonmember customers include 1,200 hotels, restaurants, and schools, as well as 180 convenience stores.

It first disclosed tentative plans to build new, larger quarters for Peirone Produce on the West Plains property in late 1995, and said it hoped to move the Peirone operation there by late 1997, but the project was postponed. The envisioned building being discussed then was to have about 64,000 square feet of floor space. That area of the West Plains just south of the Medical Lake interchange has become home to a number of trucking-related companies over about the last 15 years, and more such projects are planned there.

To deal with increasingly cramped condition at its facility on Trent, Peirone Produce has added refrigerated trailers at the back of the building, among other steps, Sonnenberg says. He says Peirone President and CEO Pat Davidson "has just been a wizard" at finding ways to use space there more efficiently.

URM disclosed in July that it was considering a big expansion of its warehouse and distribution center on north Freya to handle strong growth and to meet increasing demand for frozen and perishable goods.

Plans call for adding 75,000 square feet of space to both the north and south sides of the facility.

URM hasn't released a cost estimate for the project, but has said that constructing frozen and perishable storage facilities typically is more expensive than building dry storage facilities because of the giant freezers, coolers, and other equipment required to keep temperatures in those facilities as low as 20 degrees below zero.

Sonnenberg has said that if URM decides against moving forward with that project, it would look at how to operate within its current space more efficiently, and might consider teaming up with a "cross-docking" operation here that could help handle its frozen and perishable loads. Generally, cross-docking operations unload and load items, but don't store them.

URM said in July that it employed about 2,900 people in all, but expected to hire more in the coming year.