Revival afoot in the Woodland District

New building owners and a community college bringing new energy

rboone@theolympian.comFebruary 16, 2014 

A Kirkland real estate development company has paid $6.6 million for seven office buildings in the Woodland Square Loop area of Lacey, an acquisition that likely signals a new direction for a portion of the city that has become better known for its vacant space.

Vacancies still dot Woodland Square Loop, so MJR Development – the office-building buyer – will have to work to fill about 240,000 square feet of vacant space.

But the purchase comes at the right time.

MJR closed on its acquisition last year about the time the city of Lacey, with input from the public and a steering committee comprised of key community members, released its long-term strategic plan for the entire Woodland District, another step in trying to build a true downtown, or a “destination activity center, with services, goods and cultural activities,” Lacey Community Development Director Rick Walk said.

The Woodland District is a 200-acre area of the city that is bordered by the Chehalis-Western Trail, Interstate 5, College Street and Pacific Avenue.

It is home to South Sound Shopping Center, Fred Meyer and Market Square, the Lacey Intercity Transit Center, Huntamer Park and Woodland Square Loop. Lacey City Hall and Saint Martin’s University sit just outside the district.

It’s also home to 350 businesses with more than 4,800 employees, split between government, general merchandise, food services, health care and social assistance employment.

From a development standpoint, the Woodland District has the “right bones,” Walk said.

“Now we’re just waiting for that big push to move it forward and realize the vision,” he said.

 

A GOOD DEAL

One push might come in the form of MJR Development and its recent purchase.

MJR is familiar with Woodland Square Loop, partner Mark Lahaie said, because the business bought the Sixth and Woodland building, identified by its clock tower, prior to buying the seven additional office buildings.

MJR purchased Sixth and Woodland after the building fell into foreclosure. The seven other office buildings were purchased out of foreclosure after former owner Prium, once a major state office landlord, ran into the cold realities of the recession. The state and other tenants also later downsized the amount of space they needed in Woodland Square Loop.

MJR decided to expand its footprint in Woodland Square Loop, partly because they got such a good deal on the seven buildings.

County records show they paid $6.6 million for seven buildings assessed at about $21 million.

But it also was a matter of timing.

The worst of the recession has passed, and the economy continues to show improvement. The Sixth and Woodland building, for example, was 43 percent occupied when MJR bought it, Lahaie said, and now it’s 75 percent occupied.

MJR expects to begin renovations on some of the seven buildings this summer. Mixed-use buildings and housing are among the ideas for the former office property, he said.

Lahaie provided input on the Woodland District strategic plan as a steering committee member, calling it a flexible and creative plan that allows for incremental improvement of the district over time.

Key to the document is a 25-point action plan. The points vary in terms of cost, complexity and time to implement.

Among the 25 ideas, Walk singled out three that are significant: the creation of flexible form-based building codes, a multifamily tax exemption that would apply to new development or substantial redevelopment, and perhaps the most significant of them all, the pending arrival of South Puget Sound Community College, which plans to re-develop an existing complex of buildings on Sixth Avenue called Rowe Six and then move its Hawks Prairie campus to that site.

A GAME CHANGER

Several people who worked closely with the city on its plan said the college’s arrival will be a game-changing moment for the district and a potential catalyst for injecting more life into Woodland Square Loop.

SPSCC is set to begin renovating the first building at Rowe Six this summer, with a move-in date set for June 2015. There are several buildings at Rowe Six, but the college will start by moving into the largest, which faces Sixth Avenue.

That building will house corporate and continuing-education programs. It also will share space with the Thurston County Economic Development Council, which will play a role in creating an entrepreneurial center, said Nancy McKinney, vice president of planning, effectiveness and operations for the college.

Once complete, the new Lacey campus is expected to bring 8,000 to 10,000 people a year to the area, she said.

The college’s current Lacey campus is in the Martin Way-Marvin Road area of Hawks Prairie, and it has leased that space for nearly 20 years.

Sixth Avenue was not SPSCC’s the first choice for its Lacey campus; the college acquired land for a new campus on Marvin Road with plans to build a more traditional college campus, similar to its main Mottman campus, McKinney said.

But then the economy slowed and state funding dried up.

“It was clear it was going to take a long time to get the resources to create the second campus,” McKinney said.

That set the college off on a new search, eventually settling on Sixth Avenue.

McKinney praised the site because of the number of amenities in the area to serve students.

More important, the Lacey Intercity Transit bus center is across the street.

“We’re excited about this location,” she said.

BUSINESS IMPACT

Others, too, are excited about how the college likely will transform Woodland Square Loop and the district.

Chris Reimertz is the co-owner of Dancing Goats Coffee Bar, which is across Sixth Avenue from the future college site. He and his wife, Gina, opened the business in September 2011, and it has shown steady growth since then, Reimertz said.

But there are two vacant spaces next to his business, and activity at Woodland Square Loop tends to drop off after 5 p.m.

Thousands of people visiting the college should help fill the vacant spaces next to his business, and it also should extend the daily life of Woodland Square Loop from an eight-hour day to one that attracts and keeps people 12 to 16 hours a day, similar to a traditional downtown.

Paul DeTray, who owns the Woodview Plaza office building at Seventh Avenue and Golf Club Road, said the college’s arrival should help to stabilize occupancy levels, which would normalize leasing rates.

Woodview Plaza is a three-story, 25,000-square-foot building with space for about 15 tenants, he said.

During the worst of the recession, the number of tenants fell to nine, and now it’s back up to 12, he said. Some tenants are better than no tenants, so he had to adjust to the times by cutting leasing rates by about 25 percent.

 

PEDESTRIAN BRIDGE?

 

DeTray has owned the building for about as long as former Lacey Mayor Nancy Peterson served on the planning commission and the City Council, about 20 years.

She said the current strategic plan builds on earlier efforts of the city to bring a downtown to the district.

And there were earlier successes, she said, such as the development of Sixth Avenue and Huntamer Park.

But one ongoing challenge has been to change the auto-oriented nature of the district — it is next to Interstate 5 and is home to a large shopping center — to something that is more walkable, Peterson said.

Another goal is to connect Saint Martin’s University with the district, including a better way to get students across a busy section of College Street.

A transportation study is planned for the street as part of the strategic plan, and one idea that might emerge is the creation of a pedestrian bridge.

Peterson acknowledged that as the ideal solution, but it’s also expensive.

Still, she’s upbeat about the strategic plan.

“Things will start to happen as the economy gets better and the city and business community are able to work together to take those baby steps,” she said.

Peterson, Reimertz and McKinney also were part of the steering committee.

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

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