Port of Olympia, state agency reach proposed agreement on real estate

Land occupied by a public plaza, a well-known restaurant and an office building has been at the center of a long-simmering dispute between the Port of Olympia and the state Department of Natural Resources.

But after years of discussion, the two sides have come to terms on a proposed settlement agreement, according to the port, subject to approval by the port commission and the state commissioner of public lands. The proposed agreement was set to come before the commission on Monday, but that meeting has since been canceled. Heather Burgess, the port’s legal counsel, expects that the proposed agreement will now come before the commission March 14.

Burgess, port Executive Director Ed Galligan and Finance Director Jeff Smith participated in a mediation session with DNR representatives and retired Thurston County Superior Court Judge Tom McPhee on Feb. 9.

“This was a longstanding and complicated issue that we’re glad to have resolved,” Galligan said Wednesday, adding that he appreciated working with the DNR team. He described the process as amicable.

At issue is land that is home to the Port Plaza park, Anthony’s restaurant and The Rants Group building, an office building north of the restaurant that is home to several businesses, including the longtime commercial real estate business headed by Pat Rants.

The dispute between the port and DNR dates to 1998. That’s when the port redeveloped the property and signed ground lease agreements with the restaurant and The Rants Group for improvements. The land, originally part of Columbia Street, was vacated by the city of Olympia in 1924 and purchased by the port from Georgia-Pacific in 1967, according to port data.

DNR asserted a claim to the waterside of Columbia Street in 1998, Finance Director Smith said. But the port’s understanding was that it had purchased that property from Georgia-Pacific, Smith said.

Here are the key terms of the proposed agreement:

▪ The port will grant title to the disputed property by issuing a quit claim deed to DNR, but the port will continue to manage it.

▪ The port will pay DNR about $38,000 in rent for this year from ground rent collected by the port that totals about $127,800 per year. Rent to DNR will increase over time, but the total amount through 2047 — the lifetime of the ground leases — is pegged at $1.68 million. DNR had sought $74,480 in rent for 2016, according to port data.

▪ DNR will waive all claims to back rent, totaling about $783,000.

This story was originally published February 17, 2016 at 4:07 PM with the headline "Port of Olympia, state agency reach proposed agreement on real estate."