Another Spokane shopping district has reached a crossroads.


Just as Shadle Center and Argonne Village Shopping Center, and before them Fairwood Shopping Center, all faced change, and reacted differently, the South Hills Southgate shopping district is expected in the coming year to either bask in a resurgence or suffer the chilling effects of vacating tenants, real estate observers say.


The shopping district, which is located along Regal Street between about 44th and 48th avenues, emerged in the early 1980s, and now includes Southgate Shopping Center, a ShopKo Stores Inc. store, and a handful of small commercial tenants in an area once known for pastures and television stations.


What it will be 10 years from now is a matter of speculation.


Next summer, Albertsons Inc. will close its store in Southgate after opening a new, bigger supermarket at a new shopping center at 57th Avenue and Regal. A few months later, KHQ-TV will leave its longtime location just north of Southgate for new quarters downtown. The two moves will leave large commercial spaces availablea rare occurrence on the South Hilland both sites are the subject of speculation about what theyll be used for next.


Meanwhile, two other commercial projects are expected to get under way in the district next year. A new developer has surfaced who is interested in pursuing a project on seven acres just north of the ShopKo store, and a new development on two acres along the nearby Palouse Highway could occur in the next year.


That area is going to grow, just because its the last commercially zoned area on the South Hill that hasnt been fully developed, says David Hicks, a Tomlinson Black South Inc. real estate agent.


Hicks is marketing the seven-acre parcel north of ShopKo for Dr. Ralph and Mary Berg, a Spokane couple that for more than three years has been working on a plan to develop about 70,000 square feet of retail space there.


Hicks says a Spokane-area developer has offered to buy that property, and the Bergs currently are negotiating the sale of that land. Hicks declines to name the developer and says hes unsure what sort of project that party would propose. Hes confident, however, that development there will move forward within a year, even if current negotiations fall through.


A Wendys Old-Fashioned Hamburgers franchisee bought about an acre at the northwest corner of the Berg land about three years ago, but Hicks says that restaurateur is waiting until plans for the rest of the Bergs property are firmed up before building there.


Nearby, along the Palouse Highway, which intersects with Regal at about 46th Avenue, an about two-acre parcel was sold earlier this year to a developer who is planning a commercial project there, Hicks says. He declines to disclose the developers name or proposed uses for that property, but says he expects development to be under way before the end of 2000.


Construction timetables on the South Hill, however, often are prone to delays caused by neighborhood protests. Activists often fight development in that area, citing traffic congestion and environmental concerns as reasons for stopping further retail development. For example, the ShopKo store was delayed for about eight years by vigorous opposition before it was built.


When Albertsons leaves


At Southgate Shopping Center, located at the southwest corner of 44th and Regal, a significant chunk of space will become available when Albertsons closes its store there and moves into a 57,000-square-foot supermarket in a shopping center being built at the southeast corner of 57th and Regal by Cedar Builders Inc., of Spokane. That new center is to be called Cedar Canyon Estates.


Spokane developer Harlan Douglass owns the Southgate Shopping Center. He couldnt be reached for comment.


Some tenants in the Southgate center say Albertsons absence might affect business somewhat, but a healthy customer base in that neighborhood should keep them afloat.


Tyler Sutherland, manager of a Roundtable Pizza restaurant at Southgate, says patrons have expressed concerns to him about the impact of Albertsons move on the eatery. He says, however, I dont think it will hurt it as much as people think. I dont foresee a decrease in business at all.


Anne Alenskis, a Boise-based spokeswoman for Albertsons, says the grocery chain decided to move its Southgate store because it didnt have room to expand there. The chain is trending toward larger supermarkets, and its new store on 57th will be roughly 20,000 square feet larger than its Southgate store.


Alenskis adds that the grocery chains studies indicate that heavy traffic flows will shift from the Southgate area toward 57th, due mostly to street improvements that have been done on 57th.


Opinions vary on that traffic-flow analysis, however. While 57th likely will see more activity, Regal is one of few major arterials that carry traffic to and from the fast-growing Glenrose and Moran Prairie residential areas. Also, a recently completed extension of Southeast Boulevard from 29th Avenue to 34th Avenue and Regalbypassing the often congested Lincoln Heights shopping districtshould bolster Regals role as a major South Hill thoroughfare, observers say.


Meanwhile, another grocer already is rumored to be looking at the space currently occupied by Albertsons at Southgate, though Joe Ward, president of Pinnacle Realty Inc. and leasing agent at Southgate, says the center has no definite plans for that space. He declines to comment further on the future of the center.


Spokespeople for two Spokane-based grocery-store chains that dont have a presence on the South Hill currently, Yokes Washington Foods Inc. and Tidymans LLC, say they arent actively looking for space there.


Denny York, vice president of store development for Yokes, says the company believes the South Hill market already has too many grocery stores. Well let the other guys duke it out up there for a while, he says.


Other retail centers in the Spokane area either currently are undergoing massive changes or recently have retrenched.


At Shadle Center on Spokanes North Side, demolition crews knocked down more than 100,000 square feet of older retail space earlier this year to make way for a new Wal-Mart Stores Inc. outlet.


The Argonne Village Shopping Center, in the Spokane Valley, also changed hands and faced a wrecking ball earlier this year. The center will be rebuilt, developers say, but they have declined to disclose further details on the project.


Fairwood Shopping Center, on the North Side, faced financial difficulties in the late 1980s, and much of the space that once housed retailers there now is home of the Calvary Chapel of Spokane.


Future of KHQs property


The KHQ property, which includes about 40 acres of land and a 53,000-square-foot building, also is the subject of speculation among South Hill real estate observers.


Located just north of Southgate, KHQ will remain in its current facility until early 2001. After it moves to its new downtown facility, the company likely will sell its property there, says Betsy Cowles, vice president of Cowles Publishing Co., which owns KHQ. The Journal of Business is owned by a subsidiary of Cowles Publishing.


Cowles says some potential buyers already have expressed interest in the property, which is zoned for commercial uses along Regal and for residential uses farther west. However, the property currently isnt on the market.