Downtown property attracts new developer

A developer is interested in building 30 to 60 apartments on a parking lot at Columbia Street and Fifth Avenue in downtown Olympia after a different developer’s plan for 126 apartments there fell through.

Berschauer Group of Olympia is asking the Olympia City Council to remove development restrictions it placed on the lot when it sold it to Colpitts Development Co. of Seattle for $270,000 in 2008. Colpitts had planned to build a seven-story apartment and retail building on the site, but it couldn’t find financing in the economic downturn and lost the property to creditors. The property remains in receivership.

The council will consider Berschauer’s request at its 7 p.m. Tuesday meeting at City Hall, 601 Fourth Ave. E.

Berschauer is looking to buy the property from the receiver, but it first wants to remove a requirement that the land include retail.

“As discussed, we are concerned about below-market rents and above-average vacancies for retail and office in downtown, and other planned development that would further compound our economic challenges,” wrote Ryan Clintworth, Berschauer’s director of real estate, in a Nov. 2 letter. Clintworth did not reply to a request for comment Friday.

City Manager Steve Hall said he thinks Berschauer has offered a good proposal.

“I think it’s good, in the public interest,” he said, adding that “I think it’ll add some life to that part of downtown.”

Hall said the city would retain an agreement to match the developer’s environmental cleanup of the site dollar for dollar, but only up to $450,000, about $43,000 less than its original offer. The developer would have to pay all cleanup costs exceeding that.

If the council approves Berschauer’s request, the developer still will have to acquire the property and receive land-use approval from the city before it can begin the project.

Hall said the developer doesn’t have a firm design for what it wants to build on the site. He said the number of apartments isn’t set, but he expects a building of threeto-five stories.

“I think they’re going to look at what pencils out,” he said.

Hall said the developer is looking to build just on the northern half of the property and leave the rest, which could be parking or a future development.

The property now is used as a City of Olympia parking lot, as it was before the city sold it. The city agreed to maintain the property as a parking lot and it splits parking revenue with the land owner, said Keith Stahley, director of Community Planning and Development.

Although the project would take up city parking, the city essentially replaced the parking supply through a swap/purchase with Intercity Transit in 2009 that gave it lots at State Avenue and Capitol Way and at Fourth Avenue and Columbia Street.

Matt Batcheldor: 360-704-6869 mbatcheldor@theolympian.com   @MattBatcheldor