Olympia has benefited from the state-city relationship and what David Nicandri, director of the Washington State Historical Society, describes as its “stability.”
The Capitol and its monolith of state agencies draws a steady flow of tourists in the summer, hungry lawmakers and lobbyists in the winter, and a large jobs base. In most economic recessions, state government has buffered the community from steep downturns.
“First and foremost, this is a government town. It’s sort of like living in Pullman; Pullman is so dominated by Washington State University, if the (university) weren’t there Pullman wouldn’t be there or would be practically nothing,” Secretary of State Sam Reed said. “To a great degree, the same is true with Olympia. … There aren’t any major industries in this town that are separate from government.’’
If there is a down side to that relationship, it began to appear in 2009 – coincidentally, the 150th anniversary of the city’s founding. Strains between the Legislature and city of Olympia emerged over local land-use decisions, and job cuts resulting from deep state budget cuts were expected in the last half of the year to eliminate about 2,000 jobs statewide, many of them local.
Jobs began going away in the county in September, and the county unemployment rate hit 8.5 percent by March. That was still lower than the state rate of 9.2 percent, but more job losses are expected after July when state budget cuts finally become reality.
“I’m thinking it is going to look like it did in the early ’80s when we had some pretty significant drops in total employment. We are going to experience that again. … We won’t necessarily experience a drop in population,’’ Pete Swensson, a senior planner with Thurston Regional Planning Council, said in late April after lawmakers adopted a budget that slashed $4 billion from programs and spending.
Swensson has tracked demographic and economic trends in the community for several decades and says the recession in the early 1990s did not lead to a reduction in local government jobs.
This time, Swensson predicts a loss of 135 private sector jobs for each 100 state positions eliminated. The hit will be significant for restaurants, shops and retail trade. The state Department of Personnel estimates there are 21,700 state agency jobs in Thurston County, paying an average annual salary of $58,600.
The budget fallout is hitting in other ways, too – delaying construction of the $221 million state Heritage Center and executive office complex planned on the Capitol Campus bluff overlooking Capitol Lake. That project, once expected to open in 2012, offers a new home for the state library and archives and a receiving center for the Capitol’s 300,000 yearly tourists, including schoolkids who arrive by the busload.
That project now is not expected to open until at least 2013, disappointing Democratic Sen. Karen Fraser of Thurston County and Secretary of State Reed, its two biggest champions.
Also uncertain is the city and state’s ongoing relationship, which has evolved around other challenges in past decades. The city and state, for example, have eased tensions in past years over parking problems caused in the South Capitol neighborhood by visitors to the Capitol.
More recently, a fight has broken out between some legislators and the Olympia City Council over the city’s rezoning of land on the isthmus, the strip of land that divides Budd Inlet and Capitol Lake. The City Council decision allows buildings of up to 65 or 90 feet, and lawmakers led by Fraser say the city erred.
Fraser contends the high-rises would impair the sweeping vista of Puget Sound and the Olympic Mountains, which can be enjoyed from the upper Capitol Campus and from Heritage Park, which rings Capitol Lake. Fraser played a key role over the past 15 years to secure state financing for Heritage Park.
The issue has split local Democratic and Republican lawmakers into opposing camps, with a majority in the 22nd and 20th legislative districts siding with Fraser. A minority – Reps. Gary Alexander and Brendan Williams – object to state interference on the matter.
Nicandri, the historian and former Tumwater City Council member, says he thinks the state-city relationship is stable – despite hiccups or jurisdictional disputes such as the isthmus that crop up between the state and city every three to five years.
“I will say it is more energized than most. … This is a little bit more controversial than your typical one,” Nicandri said. “But you can count on something like this between local jurisdictions and the state. I can already predict the next one. It’ll be Capitol Lake, whether it is going to be made into an estuary or not.”
Nicandri recalled another incident more than 30 years ago that dealt with the former Thurston County Courthouse, which the state owned and was in the way of plans to develop along Capitol Way. But the roles were in some ways reversed, making a mirror image of the isthmus dispute.
“City activists and the community activists and to an extent local government were agitating against what the state wanted to do with its property,” Nicandri recalled. “The state wanted to tear down the old courthouse.”
In the end, the building was preserved and now is used for office space and a deli is run on its basement floor. And the Department of Natural Resources headquarters building was built quite a bit farther away from Capitol Way than it would have been.
Brad Shannon: 360-753-1688