Council OKs purchase of former Safeway site

By Matt Batcheldor | The Olympian • Published December 12, 2007

OLYMPIA – A block on Fourth Avenue that was a Safeway grocery store until June 9 will become city property and is City Manager Steve Hall's recommendation for a new City Hall.

The Olympia City Council voted Tuesday night to buy the property at 609 Fourth Ave. from developer John Drebick for $3.3 million, $150,000 less than his asking price. The discount is because the ground is contaminated and the city has to resolve the lease of South Bay BBQ, a restaurant on the site.

All but Councilman Jeff Kingsbury voted to buy the building; he abstained, saying it could be seen as a conflict of interest because he runs Capital Playhouse across the street. "It is definitely my preferred site for the new City Hall," Hall told the council.

Doug Mah, who is a councilman and the incoming mayor, changed his stance and said he supports putting City Hall at the Safeway site.

Previously, he had been a staunch supporter of putting the building on the Port of Olympia property on East Bay. Hall and the council also had previously preferred that plan.

"I still believe that the port property represents the best possible synergy" because City Hall would be next to a planned Hands On Children's Museum, LOTT headquarters/education center and public plaza. But "I think moving ahead with a City Hall project is more important," he said.

Council members voted for an option on the site in September but didn't vote to close on the sale until Tuesday because they wanted to do an environmental study.

In an interview later, Hall said the port property was less environmentally contaminated, but the Safeway site was better because it didn't have the same potential for development delays. Hall feared legal challenges at the port site could delay construction.

In an interview, Hall said the council could vote on where to put City Hall early next year. The council also has discussed other uses for the Safeway site, such as a parking garage or selling it to a developer for housing.

Asked how the city came up with $150,000 off the purchase price, Assistant City Manager Subir Mukerjee said it was part of the negotiation process. He said some estimates show it could cost $300,000 to $600,000 to clean up the site.

An environmental review has uncovered gasoline derivatives in the soil and groundwater, and there are four underground storage tanks that must be removed. The block has been home to a number of automotive service and repair shops from at least 1936 to about 1991, according to a Phase I environmental assessment.

"We realize that every site has risks," Mukerjee said.