State wants housing on Capitol Way site

mbatcheldor@theolympian.comApril 3, 2013 

The city of Olympia and the state Department of Fish and Wildlife are asking developers to submit proposals to build a mixed-use housing development on the department’s 600 Capitol Way North property, across from the Olympia Farmers Market.

A seven-story building could be built on the 33,000-square-foot site, which is home to one of the Department of Fish and Wildlife’s buildings, a two-story, 14,500 square-foot structure that used to belong to Georgia-Pacific. The building could be demolished or incorporated into a new development. The property has been assessed at $1.5 million.

Olympia has been working with the state, the Port of Olympia and the LOTT Clean Water Alliance to find new uses for three state parcels in the area. The Port and LOTT Clean Water Alliance are under contract to buy the other two properties. Port officials are looking to add parking, and LOTT has expressed an interest in building new underground storage basins.

Meanwhile, the city has been looking to develop what some consider an underused piece of prime property. The city and state entered into a Memorandum of Understanding in November for the city to run a Request for Proposal process.

“It’s just exciting to put this RFQ (Request for Qualifications) out on the street and to see what sort of responses we get,” said Keith Stahley, Olympia’s director of Community Planning and Development.

“It’d be nice to see some market-rate housing come in and get built down there.”

The agreement allows the city to influence what kind of development goes there without putting any of its own money into the deal. Joe Stohr, deputy director of Fish and Wildlife, said the state wanted to be a good neighbor and ensure that development on the Capitol Way lot fit with the city’s plans. He said the state retains the final say on all proposals and ultimately hopes to sell the property to a developer.

Stohr said a sale could be made this year. Stahley said that was possible, but that negotiating an agreement with a developer could take awhile.

About 50 Fish and Wildlife staffers still work at the Capitol Way property, Stohr said, and they would be relocated if the building is sold.

“I think it’s a good move … in terms of being more efficient and consolidating during tough budget times which we are always looking to do,” he said.

“… I’m excited to be able to put that property to some better, higher use potentially.”

Developers have until 4 p.m. on June 3 to submit proposals for the mixed-used development, which must include residential, retail/commercial/office space and parking. The residential portion can be either apartments or condominiums.

There is no minimum number of housing units specified under the request for proposals, but Stahley said the building could support perhaps 120 apartments, based on an earlier proposal for a property at Fifth and Columbia streets, which hasn’t been developed. Under city zoning, the building could be two stories higher than 65 feet if the top two floors are housing.

There are a couple of complicating factors. A Phase Two environmental assessment found a low level of environmental contamination on the property, an industrial area made of fill on what once was Budd Inlet. Stahley said that a cleanup would have to be negotiated in the sale of the property to a developer. State environmental cleanup funds may be available.

Also, the old Georgia-Pacific Building is on the National Register for Historic Places, which places restrictions on demolition. It is also on the state historic register.

According to the city code, such historic buildings cannot be torn down until the Olympia Heritage Commission or the city’s historic preservation officer weighs in. But they wouldn’t have final say.

Matt Batcheldor: 360-704-6869 @MattBatcheldor

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