Condo idea dead at Capitol Lake high-rise

Developer sees site as possible home for state offices

By Jim Szymanski | The Olympian • Published January 17, 2008

OLYMPIA – Downtown's vacant Capitol Center office building will not be remodeled for condominiums, the project spokesman said Wednesday.

Instead, the developer will spend the next year remodeling the eight-story building as a possible home for state offices, spokesman Neil Falkenburg said.

A slower residential real-estate market and rising remodeling costs killed the condo idea, he said.

Seattle developer Jim Potter had plans to convert the space, at Fifth Avenue and Simmons Street near Capitol Lake, into as many as 36 condos. One of the project's development partners has estimated the condos might have cost between $600,000 and $1 million each.

Falkenburg, while not elaborating, described the design review and permitting process with the city as "difficult and expensive. It was complicated — not impossible, but complicated," he said.

Potter had named the project The Views on Fifth Avenue. It included 8,000 square feet of possible commercial space on the ground floor of the building, which was built in the mid-1960s as a bank. It last was the home of the state Department of Corrections, which moved to offices in Tumwater in 2005. Although plans have changed, the building offers enviable views of the Capitol, Capitol Lake, the Olympics and Mount Rainier, Falkenburg said.

"The building, as an office, is ideally situated for state government," he said. "Nobody's going to argue it's an amazing location."

Remodeling

Falkenburg said the developer still plans for possible retail use on the first floor and might start remodeling the interior of the building within a few weeks. Remodeling would include asbestos abatement and replacing heating and ventilation systems to bring them up to modern building codes, he said.

Losing Capitol Center for residential use does not kill city officials' hopes to construct new downtown housing, City Manager Steve Hall said.

Hall said he expects the city will announce plans within a couple of weeks to move forward with a project for 120 apartments to be built east of Columbia Street between Fourth and Fifth avenues.

City Councilman Jeff Kingsbury was disappointed but not surprised that the condo idea is dead.

"It would seem like more of a blow if I hadn't anticipated it," he said, adding that the project developers had not been in regular contact with city officials since last summer.

Keith Stahley, the city's community-planning and development director, added, "Plans for the interiors were still pretty much up in the air." He said he didn't know whether the building was more likely to be remodeled for condos or office space.

City Councilman Joe Hyer complimented Potter and his development team for exploring a condo project. Potter had looked at a condo project at another downtown site before shifting his focus to Capitol Center.

It is a challenging building to convert for other uses, he said.

City officials considered Capitol Center as a possible new home for City Hall but dropped the idea because each floor was too small to make it practical, Hyer said.