The City of Olympia has commissioned many such studies in the past 30 years, with little progress to show for it. The latest study comes from Heartland LLC, a Seattle real estate consultant that the council set aside $85,000 to pay last year to study downtown economic development. Heartland has spent all but about $14,000 of that.
Much of Heartland’s focus was on developing a process to choose a developer for a new downtown parking garage – an effort the council halted last year, citing the poor economy.
Heartland presented the results of its study to the Olympia City Council during a study session Tuesday afternoon, “to inject a dose of reality into some of the city’s objectives and goals,” said Doug Larson, project manager for Heartland.
The city has had ambitious goals for new downtown housing, but it has attracted little market-rate housing – as opposed to upscale, more expensive housing – despite the many studies it has paid for. The city’s 1994 comprehensive plan, which is scheduled to be updated by next year, recommended that the city add 1,500 new market-rate housing units by 2010. A 2004 report called for 2,500 new housing units over 20 years.
The city has seen a little new housing on the margins of downtown – notably 26 market-rate units in 2004 at the Capitol Steps Apartments on Eastside Street, the eastern border of downtown. And units have been added at Capitol Crossings at 11th Avenue and Chestnut Street, as well as at a few other locations nearby.
Most of the market-rate units added in the past three decades have been restricted to seniors and people with low incomes. Stuart Place was completed in 1994 with 30 apartments that have affordability requirements. Boardwalk Apartments opened in 1999 with 284 units for seniors, also with affordability requirements. The city also helped rehabilitate existing apartment buildings over that time.
“Downtown housing stock is characterized by low-rise product type on the fringe, with product in downtown proper consisting mostly of income-restricted buildings or rehabbed units located on the upper floors of older historic buildings,” the study says.
The City Council has tried for years to attract a new market-rate-housing project. It sold a city parking lot on Columbia Street between Fourth and Fifth avenues to Colpitts Development Co. of Seattle in 2008 for $275,000. Colpitts had planned to build a seven-story, 123-apartment building there, but it hasn’t broken ground, a victim of the bad economy.
“It is endemic of the type of midrise, stacked-flat, mixed-use development that the city wishes to encourage in its downtown, and its completion would represent the first new midrise residential product built in downtown in over 10 years,” the study says.
The picture is darker still for condos.
“Sales volumes for all condo product in 2009 are down 69 percent from what they were a year ago,” the report says.
Two recent condo projects – Smyth Landing and Union Heights – have been slow to sell. Only two of 10 condos in Union Heights, at Capitol Way and Union Avenue, have sold since the building went on the market in October, Larson said. Although the 12-condo Smyth Landing was finished during the housing boom and has sold out, it also was slow to sell, he said.
Larson made a pitch for Heartland to do more work for the city – to inventory land with a propensity to develop and look at development scenarios. Council members didn’t come to an agreement.
Councilman Joe Hyer said he would rather focus on a specific site than do another study. Councilman Stephen Buxbaum said some of the council’s energy needs to be focused on places other than downtown. He also mentioned strengthening the existing business core.
“I think that these are things that we can do before we just beat our heads against the wall (and say) ‘We want housing, we want housing,’” he said.
Matt Batcheldor: 360-704-6869
mbatcheldor@theolympian.com
