Downtown Olympia lot sold for housing

By Rolf Boone | The Olympian • Published January 03, 2009

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OLYMPIA – A developer has purchased a half-block-long parking lot in downtown Olympia and plans to build market-rate housing there, the first such project downtown in more than a decade.

Colpitts Development Co. LLC of Seattle paid $270,000 Wednesday for the lot behind Olympia Federal Savings and Ken Schoenfeld Furniture.

As part of the agreement, the city is assuming up to $493,000 in soil-contamination cleanup costs and utility-relocation expenses.

In an effort to bring new, market-rate housing to downtown, the Olympia City Council voted in August 2007 to authorize a purchase-and-sale agreement with Colpitts; the final terms of the sale were approved by the council a year later, according to the city.

Colpitts, known for developing multifamily apartment projects in the Seattle area, plans to build a seven-story, mixed-use apartment building with 120 apartment units.

It would include retail space and parking on the first floor, housing and more parking on the second floor and apartments on the remaining floors, Assistant City Manager Subir Mukerjee said.

"This is a milestone for the developer to actually go forward with development — especially in this financial market," he said.

Mukerjee said market-rate housing hasn't been built downtown since the mid-1990s, when developments on Eastside Street and across from the downtown post office went up.

Colpitts could begin work on the site in four to six months at the earliest, but the work could be delayed by the slower economy and tighter credit markets, project manager Rich Senseney said.

"It's going to be a function of the capital markets returning (to normal) more than anything else," he said about a construction start date.

The building site, between Fifth and Fourth avenues on Columbia Street, has created controversy.

In September, the owners of Ken Schoenfeld Furniture sued the city about environmental contamination at the site and also have appealed the thoroughness of Colpitts' environmental review of the site to the Olympia hearing examiner.

The hearing examiner ruled against them, but the lawsuit still is active, Schoenfeld attorney Richard "Mick" Phillips said.

Schoenfeld also has been concerned about losing parking spots to the new development, but the lawsuit does not address parking, Phillips said.

He questioned the price Colpitts paid, calling it a "gift of public property."

"I would be astonished if they didn't close on the sale," Phillips said about Colpitts. "I don't think the property really cost them anything. The city gets a quarter-million (for the sale) and pays a half-million (for cleanup costs). I'm sure my clients would've paid that price."

Senseney said the property needs to be cleaned up and that even in a better economy, Colpitts still would have to convince lenders there is a market for housing in downtown Olympia.

"We're convinced, and we believe we can convince those lenders, but they are conservative by nature," he said.

"It certainly is not a 'gimme,'" Senseney added. He said that if it was so easy, other developers already would have tried to develop downtown.

Rolf Boone covers business for The Olympian. He can be reached at 360-754-5403 or rboone@theolympian.com.