Mixed-use site on table

Olympia Council: City may decide to work with state

Staff writerNovember 13, 2012 

The Olympia City Council will consider an agreement tonight with the state Department of Fish and Wildlife to help the agency sell its Capitol Way property to a developer.

The city wants market-rate housing and mixed-use development on the property at 600 Capitol Way N. and has been working with the Port of Olympia and the LOTT Clean Water Alliance on a larger redevelopment of the area near the Olympia Farmers Market.

Under the agreement, the city would seek grants from the state Department of Ecology for an environmental assessment of the property and take the lead on requesting proposals from developers for redevelopment. The agreement allows the city to have control over what kind of development goes there without putting any of its own money into the deal.

“I’m hopeful that through this agreement we can partner in a meaningful way with the State of Washington to find an appropriate development for the Fish and Wildlife property,” Mayor Stephen Buxbaum said. “So this is the first step down that path in collaboration with the state to market the building.”

The plot is about a half-acre and has a 14,500-square-foot building that is home to Fish and Wildlife offices. For the past several years, the state has indicated its intent to vacate the building. City Manager Steve Hall said the state has appraised the property at $1.5 million.

“I think it’s a really key site in our downtown,” Hall said, with “great potential to be a really high-quality mixed-use project.”

Buxbaum said he’s looking for a development that will complement the nearby farmers market, with housing, retail and even an expanded market facility.

According to the agreement, the building is zoned for a 65-foot height limit.

Before any redevelopment occurs, the environmental condition of the land must be determined. The city has agreed to apply for grants from the state Department of Ecology to do a Phase 2 environmental assessment of the property. Hall said the city has applied for the funds and should know any day now whether it has received them.

Under the agreement, the city would put out a request for proposals for the property from developers within 21 days of the completion of the environmental assessment. If the assessment determines that a cleanup is necessary, that can be factored into the sales price for the building, Hall said.

“I’m not sure that we know that there is any contamination,” he said.

The lot could then be sold to a private developer under the city’s process, without the city taking ownership of the property. Buxbaum said the city doesn’t have the money for the property.

The state would have the final say over any sale to a developer.

The Capitol Way property is part of a larger effort to redevelop state properties on the Port Peninsula in which the city, the port and LOTT have expressed joint interest.

In August, the Port of Olympia moved to buy two surplus state properties for $925,000. The 2.1-acre properties include a small office space along Washington Street and a warehouse that would likely be torn down.

Port executive director Ed Galligan has said the port is interested in adding parking near the farmers market. And LOTT officials have expressed an interest in building new underground storage basins to increase capacity to treat waste.

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

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