Olympia - Intercity Transit's board has settled on a $7.8 million plan to expand the Olympia Transit Center, including a new three-story building that would host Greyhound buses and provide office space for the transit agency.

Transit officials say the bus depot, built in 1993 at 222 State Ave., is over capacity. The center has 10 bus bays, and five buses have to stop on the street. When the expansion is complete, the transit center will have 21 bays, but some buses will continue to stop on the street.

Intercity Transit spokeswoman Meg Kester noted that the expanded center would take its place among major new construction nearby – including a new Hands On Children’s Museum, a revamped Percival Landing and a recently finished LOTT headquarters and education center.

“That really will be a centerpiece to the downtown of the future,” she said.

Ann Freeman-Manzanares, development director for Intercity Transit, said work is scheduled to get under way on the new center in May or June, and the center is set to be complete in summer 2013.

The 12,387-square-foot building will be built on the northeast corner of the same block as the existing transit center. It would include an outlet for pass and ticket sales, a large covered waiting area, an indoor reception area for Greyhound, restrooms and expanded bicycle facilities.

The transit agency’s executive staff members and marketing, planning and other departments would occupy the second and third floors, said Freeman-Manzanares. Maintenance staffers, dispatchers and other staff members would remain at the agency’s Pattison Street headquarters, Kester said.

The project will be largely funded by a combination of federal money and committed local dollars of $4.7 million. Kester said the remaining money will come out of the agency’s general fund.

“I think it is fair to say that we would not be moving ahead with the project if there were not significant federal funds associated with the project,” she said.

Intercity Transit has been in discussion with Greyhound, which has expressed interest in moving its operations from its historic art deco bus station on Seventh Avenue.

Greyhound is “very interested” in relocating to an expanded Olympia Transit Center, Freeman-Manzanares said.

“We don’t have a lease with them yet,” she said.

The transit agency, which settled on the design at a board meeting in February, chose the most expensive of four proposals. The smallest of the options would have cost $4.9 million and had 5,107 square feet of space.

Kester said Intercity Transit waited to have voters vote up or down a proposal to raise sales taxes by two-tenths of a cent on every dollar for transit. When voters approved the measure in August, Kester said, Intercity Transit took that as “a vote of confidence.”

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