Take a relatively small county — Thurston County is the seventh smallest in the state at 721 square miles — add three growing cities like Olympia, Lacey and Tumwater, mix in the history of planning in the area, and the result has produced some interesting, sometimes confusing city boundaries.
In some cases, city borders have completely surrounded unincorporated areas of Thurston County, creating various “islands.”
From afar, one might ask, what’s the confusion? Well, here’s a quiz to test your Thurston County geography:
▪ If you’re shopping at the retailer Hobby Lobby, which city are you in? If you answered Lacey, that’s incorrect. (Answer: Olympia).
▪ If you’re shopping at WinCo on Martin Way, which city are you in? If you answered Lacey, that’s also incorrect. (Answer: Unincorporated Thurston County).
▪ If you’re playing golf at Capitol City Golf Club, which city are you in? If you answered Lacey, that, too, is incorrect. (Answer: Unincorporated Thurston County).
If those answers caught you by surprise, you’re not alone. All three cities have encountered this confusion with residents and businesses and some have taken steps to address it through annexation, in which previously unincorporated county land becomes part of a city.
Olympia City Manager Steve Hall said the city addressed some of that confusion by annexing several small islands of unincorporated area in 2014 and 2015. Tumwater took a similar step in 2016 when it annexed a two-and-a-half square mile area east of Old Highway 99, City Administrator John Doan said.
But perhaps no city has experienced more confusion over its borders than Lacey, which nearly surrounds one of the largest unincorporated areas in the county, an area called Tanglewilde/Thompson Place that runs from Carpenter Road to Galaxy Drive on Martin Way East, as well as north to Interstate 5.
TANGLEWILDE/ THOMPSON PLACE
The unincorporated business and residential area known as Tanglewilde/Thompson Place, which many already confuse with Lacey, has never been part of the city. In fact, the two neighborhoods were established before Lacey became a city in 1966, said Lacey City Manager Scott Spence. Lacey has the largest urban growth area in the county, and that urban growth area alone, if it became a city, would be the third largest in the county, he said.
Some of the confusion for businesses and residents can be traced to Lacey ZIP codes that overlap urban growth areas, or that a third of Lacey water customers aren’t actually in the city, Lacey Finance Director Troy Woo said. Some businesses, too, in the area have adopted the Lacey name, despite being in the county, such as the Lacey Urban Center, a strip mall in the 7200 block of Martin Way East.
Confusion about the Tanglewidle/Thompson Place area has emerged in unexpected ways:
▪ Resident Matthew Staples announced in March he was a candidate for Lacey City Council until he learned he didn’t live in Lacey. Instead, he was 500 feet from city limits.
▪ A recent state Department of Revenue audit of about 200 businesses along the Martin Way East corridor found that 19 undisclosed businesses were mistakenly paying sales tax to Lacey when it should have been sent to the county.
Lacey Finance Director Woo decided to investigate after the city received sales tax revenue from a relatively new business along the corridor. He then asked Thurston County Treasurer Jeff Gadman to look into it. Gadman contacted the state Department of Revenue, which resulted in the audit for the first half of 2017. That resulted in a loss of $34,000 in sales tax revenue to Lacey, but a gain to the county, Woo said.
How does this happen?
A spokeswoman for Department of Revenue didn’t speak to the audit itself, but offered this:
“Often we are contacted by jurisdictions to research accounts that are not reporting to the correct location,” said spokeswoman Anna Gill. “If we find the accounts have been reporting incorrectly, we will make adjustments.”
Treasurer Gadman, a Lacey resident and former Lacey City Council member, thinks it starts with the business owner who has to first identify whether they are in an unincorporated or incorporated area.
“In that regard, it doesn’t surprise me,” he said about the confusion.
Budd Bay Promotions & Apparel owner John Grantham, whose 20-year-old business had its start in Olympia, has been based in the unincorporated area of Martin Way East for seven years. He said he chooses to identify as a Lacey business and expects to eventually be incorporated into the city.
To his local customers, Grantham tells them his business is in Lacey, not far from McKinney’s. To his vendors outside the state, the business is described as south of Seattle, near Olympia, he said.
TO ANNEX OR NOT TO ANNEX
Lacey has long discussed whether to annex the Tanglewilde/Thompson Place area, and once again it was discussed at a Lacey City Council retreat. The challenge for Lacey, city manager Spence said before the retreat, is whether the city can provide services to two fully developed neighborhoods without having a major effect to those services elsewhere in the city.
Bottom line: Annexation has to strike the right balance between city expenses and potential tax revenue, finance director Woo said.
Prior to annexing several unincorporated islands in Olympia, city manager Hall said residents had questions about garbage pickup, voting and who to turn to for road repairs. In Tumwater, after the 2016 annexation, the city added 3,200 residents. They were already connected to Tumwater utilities but had Olympia addresses. The annexation also meant additional tax revenue for Tumwater, which allowed it to increase staffing at a second fire station, Doan said.
Hall said there’s still confusion over the Olympia/Tumwater boundary on North Street that the city has tried to rationalize, but he acknowledged it’s still not crystal clear. The city also has plans to annex some property in the Yelm Highway/Boulevard Road area to “round off some of the city’s rough edges,” he said.
Sometimes, a business just wants to keep its name no matter where it’s located.
Olympia Pet Emergency, which is now based in Lacey on Pacific Avenue, will stick with its existing name.
Lacey city manager Spence also pointed out that if you need licensing services, you can go to Lacey Auto Licensing.
Oh, it’s at Albertsons on Fones Road in Olympia.