Washington State University has reached a preliminary agreement with Denver-based developer NexCore Group LP for development of 3.5 acres of land that include the former Jensen-Byrd warehouse building and three other parcels in the Riverpoint Campus east of downtown.

In the first of three phases, NexCore plans to develop a three-story, 60,000-square-foot medical office building in which Arthritis Northwest PLLC, of Spokane, would be the anchor tenant, says Ryan Ruffcorn, WSU's project manager here. Work on that phase is expected to start next year.

Redevelopment of the six-story, 179,000-square-foot Jensen-Byrd building will be considered for a future phase, Ruffcorn says.

When WSU sought development proposals last March for the land it calls the Pine Street Development, it required that the nearly century-old Jensen-Byrd warehouse be preserved, and that no residential condominiums be developed within it.

The office building NexCore plans to develop would be located at the southeast corner of Spokane Falls Boulevard and Pine Street, just northwest of the Jensen-Byrd building. Angela Barbosa, a NexCore spokeswoman, declines to disclose a cost estimate for the building project and says no contractor has been selected to build the structure yet.

Arthritis Northwest plans to occupy 12,000 square feet to 20,000 square feet of floor space in the proposed building and tentatively plans to move there in early 2011, says Karen Ferguson, the practice's administrator. It currently has six physicians and 42 other employees and occupies about 9,000 square feet of space in the Sacred Heart Doctors Building, at 105 W. Eighth, she says.

Ferguson says the practice's future Riverpoint location should help foster collaboration between the medical and academic communities.

Although WSU's main campus is in Pullman, Wash., its growing health-sciences programs are based at Washington State University at Spokane, and the Riverpoint Campus is developing a focus on the health-science programs of both WSU and Eastern Washington University, Brian Pitcher, chancellor of WSU-Spokane says.

"Our faculty and students will benefit from having practicing clinicians right on campus who can collaborate on research, provide practicum experience for our students, and draw people to the campus," Pitcher says in a press release about the agreement with NexCore.

The Pine Street Development area is divided into four parcels. Parcel B is at the northeast corner of Pine Street and Main Avenue. Parcel A, on which the medical office building is to be built, is north of Parcel B. Parcel C, where the former Jensen-Byrd Building is located, is just to the east of Parcel B, and Parcel D is directly east of Parcel C.

The first-phase lease is for Parcels A, B, and D. In addition to the office building, parking will be developed in that phase. Ruffcorn says that more than one lot could be developed in the same phase.

The second phase of the Pine Street Development would involve redevelopment of the former Jensen-Byrd Building, on Parcel C, or development of a second medical office building on Parcel D. Whichever of those two projects isn't done in the second phase would be done in the third phase.

WSU and NexCore have agreed to work together to explore, develop, and agree on projects to be included in the second and third phases, Ruffcorn says.

NexCore's development proposal was chosen over proposals submitted by Wells & Co., of Spokane; GVD Commercial Property, of Orange, Calif.; and Amidi Group, of Redwood, Calif.

NexCore manages 1.3 million square feet of health-care, commercial, and mixed-use facilities, its Web site says. The company's work here includes development of a five-story, 65,800-square-foot medical office building at Holy Family Hospital.