Downtown Olympia developer to move forward with new project on port property

Prominent downtown Olympia developer Walker John is ready to move forward with a new project that would occupy Port of Olympia-owned land in the heart of the city.

John, who redeveloped a former state office building into the Thurston First Bank Building at Franklin Street and Legion Way, wants to bring three buildings to a corner parcel at Jefferson Street and State Avenue. The project would be home to 87 market-rate apartments, nine townhome-style units — similar to the townhomes that John has built at 12th Avenue and Jefferson Street — and 8,500 square feet of retail space.

“We’ve heard loud and clear that the city wants more living density downtown,” said Mike Reid, senior manager of business development for the port.

After John redeveloped the state office building into the Thurston First building, he tackled a similar project at 12th Avenue and Jefferson Street. He is building more apartments next door to Thurston First. One of his first projects was renovating the Cunningham Building at Fourth Avenue and Adams Street.

John’s proposal is set to come before the port commission on Nov. 14 as an advisory item for discussion. The Port Commission then will vote whether to approve a ground lease with the developer and an option for the surrounding land on Nov. 28. Both meetings are at 5:30 p.m. at 626 Columbia St. NW, Suite 1-B.

If approved, here are some of the lease terms, according to Reid:

▪ John would sign a 50-year lease with a 30-year option to renew.

▪ He would pay $1 per square foot, which would increase 2 percent annually.

▪ He would pay 3 percent of his tenants’ gross receipts to the port. But if he pursues an environmentally sustainable project, otherwise known as LEED certification, the port will cut that rate to 2.5 percent.

In all, John would pay the port about $120,000 a year, Reid said.

Some other features of the development: covered ground parking, a pedestrian walkway with a water feature, and 5-story, 4-story and 3-story buildings that would “step down” from State Avenue. The port is responsible for the environmental cleanup of the site, and a parking structure is being considered to support future development in the area.

The land was last used for boat storage by the port around 2008, Reid said. The boats were relocated. Two Seattle developers considered the site, but backed out because of the poor economy.

In his previous projects, John has “proven that downtown is viable and improving,” said Reid.

This story was originally published November 7, 2016 at 5:00 PM with the headline "Downtown Olympia developer to move forward with new project on port property."