Wave of lodging deals coming for Olympia

A pair of downtown mainstays might get new owners while Seattle developers spur construction of fresh hotels

rboone@theolympian.comAugust 29, 2013 

One of the large 8th floor suites at the Governor Hotel. (The Olympian staff file, 2012)

STEVE BLOOM — The Olympian Buy Photo

Two downtown Olympia hotels on Capitol Way — the Governor Hotel and the Capitol Plaza Hotel — could soon be sold and operated under different brands, two of several potential lodging developments in the works for the Olympia area.

Governor Hotel general manager Sandra Miller declined to comment in great detail about the potential sale, but said a buyer has the hotel under contract and a sale could be completed by the middle of next month.

If the sale goes through, the hotel would close for a major renovation, she said.

Miller deferred to Red Lion Hotel Tacoma general manager Ryan Kang for further comment but he could not be reached Wednesday.

Meanwhile, in a separate deal, Seattle hotel developer Han Kim and his partners have the Capitol Plaza Hotel at 900 Capitol Way S. under contract, which allows them to explore development options there.

One idea is to transform it into a 55-room, extended-stay hotel, possibly operating it under Marriott’s extended-stay brand called TownePlace Suites.

Kim said his group is still doing its due diligence on the property, which is expected to end Friday.

Kim and his business partners are no strangers to Thurston County.

They brought a Candlewood Suites and Holiday Inn Express to Third Avenue Southeast in Lacey a few years ago, and continue to move forward with plans to bring a 130-room Hilton Garden Inn to a plot of land at Henderson Boulevard and Interstate 5, a site that has long awaited development.

The city’s planning permit specialist, Paula Smith, confirmed Wednesday that the Hilton project is working its way through the development process. She said the city is waiting for a few more items to deem the land use review application complete. Once complete, the city will issue a notice of application about the project, she said.

If that wasn’t enough, Kim’s group also purchased Bailey’s Motor Inn on Martin Way, which recently closed. That property, too, could become a hotel because they like its proximity to Providence St. Peter Hospital, Kim said.

“We must love Olympia,” he said after reflecting on the possibility that his group might have ties to three hotels in the city.

But Kim also said that the market is in need of a hotel and that hotel guests don’t get equal value for what they pay.

“They are not getting the modern product for the rate they pay,” he said. “There is room for us to come in and serve the customer base.”

Olympia Lacey Tumwater Visitor and Convention Bureau Executive Director George Sharp said an extended-stay hotel downtown makes sense because it is so close to the state Capitol. Lawmakers and lobbyists likely would stay there to avoid having to drive back and forth from another location, and it’s another place for visitors to stay.

The Olympia Lacey Tumwater Visitor Information Center receives 100 to 300 visitors a day, he said.

Meanwhile, even more hotels could be coming to Olympia.

Developer Lorig Associates of Seattle has signed an option agreement with the Port of Olympia in hopes of bringing a hotel to one of the port’s East Bay parcels along State Avenue.

At Monday’s port commission meeting, the commission discussed an extension of that option agreement, but the outcome of that conversation was not known on Wednesday.

Mike Reid, the port’s senior manager of business development, could not be reached.

Rolf Boone: 360-754-5403 rboone@theolympian.com

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