The city of Spokane and Hillyard business leaders have begun work on plans to create a revitalized industrial area in northeast Spokane.

Spokane Mayor Mary Verner earlier this year named East Hillyard a targeted development area, meaning the city will make spending on infrastructure a priority for the area bounded roughly by Freya and Havana streets and Francis and Empire avenues. The area includes 507 acres of industrial land and 329 acres of residential property, but less than a third of it has adequate infrastructure, such as paved roads and utilities, says city Business and Development Coordinator Teri Stripes.

Together, business leaders and the city envision such possible improvements in the targeted development area as a designated industrial park and a manufacturing development center.

Verner says there's "great potential for commercial and industrial growth" in that area, but she concedes, "there really isn't any funding right now." She believes the recent completion of a Market Street revitalization project that enhanced the district has created momentum for further development in the industrial zone to the east of there. The city plans to assist an advisory board that's forming to explore funding options for infrastructure development projects.

While that board is being assembled, a core group of Hillyard business and property owners has been meeting with city staff members to begin the initial stages of planning. One of those business owners, David Griswold, who owns Guardian Self-Storage, at 3727 E. Queen, says representatives of Greater Spokane Incorporated, Avista Corp., and the Washington state Department of Transportation have been invited to join the advisory board to help move the project forward.

Food Services of America's Spokane branch President Mike George says that although development in the East Hillyard area will have little impact on FSA's large distribution center at 3520 E. Francis, he has agreed to join the advisory board. "We want to be a good citizen of the Hillyard Community. We like to be good neighbors,'" George says.

Griswold says local improvement districts have been formed to pave portions of Decatur, Dalke, Rowan, and Sanson avenues, and Julia, Myrtle, and Florida streets in the industrial zone over the next three years. Other infrastructure, such as sidewalks, sewers, phone, and Internet service also will need to be added in some areas.

The advisory board that currently is forming will have to determine the best funding sources to put in sidewalks, sewer, and water, with possibilities including tax-increment financing, a local infrastructure financing tool, local revitalization financing, and creation of a public development authority. Verner held a meeting with East Hillyard business owners in May to discuss funding options for development.

Once the necessary infrastructure is in place, the city hopes that small industrial developments will be attracted to vacant, underutilized, and "brownfield" properties there, a city Web site says. Brownfield refers to industrial or commercial land that is abandoned or underused and sometimes polluted, but that often has redevelopment potential.

"The true market demand potential of the North-East Development target area is unknown," the city's Web site says. It adds, however, that the city believes the area has potential because it is one of only three industrial areas zoned in Spokane, and one of only two that will have direct access to the North Spokane Corridor and to a railway.

The Washington state Department of Transportation plans to route a section of the North Spokane Corridor on land between Market and Freya streets owned by BNSF Railway Co. Freeway on-ramps and off-ramps for Freya are planned just north of Francis, and on an interchange with Wellesley. The new freeway is expected to improve freight access to U.S. 2 and U.S. 395 to the north, and to Interstate 90 to the south.

Executives of large food-distribution facilities located just west of the targeted development area expect a boon from the improved transportation. Dean Sonnenburg, CEO of Spokane-based URM Stores Inc., says that company's distribution facility at 7511 N. Freya sees 700 inbound and outbound freight loads every week. He estimates that 500 of those trucks will utilize the freeway once it is completed, cutting travel time to and from I-90 in half.

"Our main wish is that it gets accomplished sooner rather than later," Sonnenberg says. Construction of the freeway section to the north has caused disruption of URM over the past year, he says, but adds, "We worked through it and we're glad to have it done."

Mike Fuhrman, Spokane distribution center manager for Safeway Stores Inc., also says freight trucks' traveling time to and from Safeway's sprawling distribution center at 5707 N. Freya will be cut in half once the North Spokane Corridor project is complete. The center supplies inventory to Safeway stores in Eastern Washington, North Idaho, and Western Montana.

Verner says that while there's still a considerable amount of angst about the freeway project to the south of Hillyard, among most businesses in East Hillyard, "sentiment about the Corridor has become one of acceptance of impacts. Now, they are planning for the opportunities."

The city's business and development department has laid out plans to recruit a national lodging chain to build a hotel or motel with multipurpose meeting facilities next to the planned Wellesley or Francis interchange. That would serve truckers, business travelers, and northeast Spokane businesses needing overnight and meeting facilities, a city document says.

Other ideas include establishing a manufacturing development center within the targeted revitalization area that would include a light-manufacturing business incubator and facilities for skills training, product development, manufacturing process and management development, and commercialization support. "Green," sustainable manufacturing could become a major focus of an envisioned Hillyard Industrial Park, which potentially could be located within the targeted development area. Verner says if the city recruits clean-energy industry to the East Hillyard area, U.S. Department of Energy stimulus funds could be available to help with development.

Residential developments are planned east of Havana between Bismark and Columbia avenues, and south of Wellesley between Rebecca and Havana that would provide housing for workers in the industrial area. A site plan for a 1,250-unit phased residential and multifamily development on Beacon Hill has been submitted to and accepted by the city. A neighborhood retail center also is planned for Beacon Hill, according to a city planning document.

If Hillyard puts together the overall infrastructure, we will have a synergistic industrial park," Griswold says. "We've already put in for community block grant funds. We'll see how that comes out in the next six months to a year."

Griswold cites the three-year downtown-Hillyard revitalization project and the five-year planning effort for the University District near downtown Spokane as examples of what can be done in East Hillyard.

"The enthusiasm is there. Businesses are starting to come together," Griswold says, adding, "It's just going to take time.