The city of Lacey is taking a new approach with Lacey Crossroads, a slow-to-develop shopping center that the city and key owner hope will attract more retailers to the site.
Lacey City Council has approved an amended development agreement for the location at Yelm Highway and College Street Southeast, which is anchored by home improvement retailer Lowe’s. While it is home to a few other retailers, the property owner who appeared before the council in February made a stunning admission: Dozens of businesses have rejected the site over the years.
Excelsior Capital Partners Principal Nate Cann said the city surveyed Lacey residents a few years ago, asking which businesses they would like to see come to town. Residents generated about 100 responses and those were shared with Cann and his representatives. No such luck: All of those businesses turned him down.
“The top 100 requests literally could not be met,” he told the council that night. “We were left with ‘Why?’”
They reached out to some of the retailers and listened to their feedback, he said.
“That’s the impetus behind this evening,” Cann told the council. “We need to improve our offering.”
The city signed off on the original Crossroads development in 2007, about a year before the Great Recession, which landed hard on the entire real estate industry, both residential and commercial.
Excelsior, which has offices in Southern California and Colorado, became involved with the development because it specializes in buying distressed debt from financial institutions. After the original developer could not fill even half the site, it eventually was foreclosed on and went bankrupt.
“Much to our regret, we took the property back,” Cann told the council.
Excelsior now owns a dozen parcels at Crossroads, said Olympia attorney Heather Burgess, who worked with Excelsior on the amended agreement.
Burgess acknowleged that 100 businesses took a pass on Crossroads, but some were not viable candidates for the site, while others would have never come there, she said. For example, Cann said he pursued both Nordstrom and an Apple store, which only locate in much larger cities.
What Excelsior sought — and what the council ultimately agreed to — was to lift the lot-by-lot designations and let the underlying zoning guide future development. The zoning is largely community commercial.
Under the previous agreement, a lot would be designated retail only and prevent other types of uses, Burgess said. For example, Excelsior had tried to bring a dentist to the site and couldn’t under the old agreement, she said.
Excelsior also won greater flexibility for a lot in the southeast corner of the development, which has been under contract for a number of years, but has never sold, Cann said. They now will be able to bring a drive-though lane to the site closest to the intersection.
But some things won’t change, such as requiring the buildings to face inward or blend in with the plaza-like feel of the development. That may have hurt the marketability of the site, but it gives it a much different feel from the Little Prairie Center, for example, which is anchored by Safeway across the street.
Businesses there face either Yelm Highway or College Street, but do so across a large parking lot. That development feels more oriented to cars, compared to the walking paths created for Crossroads.
Lacey Mayor Andy Ryder praised the council’s willingness to be flexible, but Deputy Mayor Cynthia Pratt, though supportive, took issue with his comment.
“I’m not against it,” she said about the amended development agreement. “But we have a tendency to change every time somebody says ‘let’s change it,’ and that really bothers me a lot.”
Councilman Jason Hearn reminded her about the effect of the Great Recession.
“I don’t think we could have imagined the financial carnage wrought by the Great Recession,” he said. “I’m hopeful that success can come about.”
Still, Hearn raised concerns about an increase in traffic once a drive-through lane is added to that southeast corner lot.
Samra Seymour, an associate planner for the city, said that 1,700 to 1,800 vehicle trips per day were projected for the Lacey Corporate Center and Crossroad site, and it still hasn’t met that threshold.