By CLAYTON PARK

A Subway sandwich shop will become the anchor retail tenant of the new six-story Rekhi Building in downtown Lake City. A banner advertising the coming store was placed on the building Nov. 17, ending months of speculation by locals as to who would occupy the building's street-level corner space after Tully's Coffee, which had been slated to be the anchor, backed out last spring.

Building owner Jo Rekhi said the Subway restaurant is expected to open in either late December or early January. He added that the new eatery isn't expected to affect the Subway already located in the nearby Pinehurst neighborhood, on the corner of 15th Avenue NE and NE 125th. He said his understanding is that the Pinehurst Subway will remain open.

Rekhi also recently signed a second commercial tenant, an entrepreneur named Koji Okuno who owns several Japanese restaurants in the Portland area. Okuno plans to use the Lake City space as a combination headquarters and retail outlet for a side business: selling surf boards. Okuno doesn't have plans for a restaurant in Lake City, but is planning to open a restaurant in the Lake Union area, Rekhi said.

Completed in May, the Rekhi Building is located on the northeast corner of NE 125th and Lake City Way in the heart of Lake City's commercial core. Rekhi began construction of his new building after a fire in August 1998 razed the single-story structure that previously occupied the site.

The Rekhi Building's 39 apartment units, located on the top four floors, are now 100 percent leased, but Rekhi said he is still looking for tenants for the office spaces on the second floor as well as three remaining commercial spaces on the ground floor.

He has also pushed back the date for installing a decorative clock and fountain until early 2002. He said the artist he has commissioned, Kevin Spitzer of Capitol Hill, has asked for more time to complete the project.

Rekhi also said he has decided to delay the construction of a second mixed-use building on the site immediately north of the Rekhi Building to sometime next year. (