Port of Olympia commission set to vote on option agreement for Tumwater land next month
The Port of Olympia commission is set to vote July 13 on whether to approve an option agreement with a developer for 200 acres of port-owned land in Tumwater, a spokeswoman for the port said Monday.
The commission discussed the proposal at its Monday meeting, with commissioners drilling down on its Habitat Conservation Plan, and whether the potential costs to the port make financial sense.
Commissioner E.J. Zita also argued for more time to discuss the topic.
The proposed option-to-lease agreement is with Panattoni, a Southern California developer, for port-owned land in Tumwater known as the New Market Industrial Campus, west of Olympia Regional Airport. The land is vacant and largely covered in trees. The port is not selling the land, commissioners reiterated on Monday.
Some of the proposed terms of the option agreement:
- 10 years in length, although Panattoni would have to execute its first lease within five years and for no less than 10 acres.
- Panattoni can explore commercial, business park and light industrial uses, but all proposed uses must be consistent with city of Tumwater zoning.
- For all 200 acres, the option would pay the port about $354,000 per year, The Olympian reported.
But before the commission could discuss the details, Commissioner E.J. Zita sought to remove the topic from Monday’s agenda, saying she wanted to move it to a work session for more discussion. Her amendment to remove it from the agenda failed, though, for lack of a second vote from either of her fellow commissioners, Bill McGregor or Joe Downing.
Later, they drilled into the Habitat Conservation Plan for the 200-acre site, something the port and city of Tumwater have to work on within two years, port business development director Allyn Roe said. Under the proposed agreement, the port would pay as much as $100,000 per acre if anything needs to be mitigated on the land.
Roe defended the plan, saying that by offering to cover those costs, it makes the land more valuable on a per-square-foot basis. Using the example of a 10-acre lease with a 20-year term, plus including around $1 million in mitigation costs ($100,000 per acre for 10 acres), the port still comes out ahead, even if the port wasn’t paying those costs, because of the higher land value.
“We’re still ahead, the public is still ahead, this is not a gift to anybody,” Roe said. “It’s in the best interest of the port and fairest solution for all parties.”
But Commissioner Zita pointed out that for all 200 acres at $100,000 per acre, the potential cost to the port could be $20 million. It reminded her of a time when the port invested in property in Lacey’s Meridian Campus, then discovered the buildings needed maintenance and repairs, wiping out the port’s potential gains on its investment.
“It’s a big expense for the port, a big expense for the taxpayers, and a great deal for the developer,” she said.
Downing acknowledged that there’s no way the port could afford $20 million, but he also said mitigation costs per acre are likely to vary and not be the full amount.
Business development director Roe added that those potential costs also wouldn’t kick in until leases were signed, meaning the port would be receiving lease revenue, he said.
Residents spoke out against the proposed agreement, including Pat Rasmussen, who also chided the commission for not agreeing to Zita’s agenda amendment.
“Your refusal to accept the amendment is disgusting and irresponsible,” she said.
Amy Evans said she welcomes the project, and the jobs and tax revenue it might generate, because in the slower COVID-19 economy, city budgets are being slashed and people are reeling from unemployment.
“It’s clear this is the right project for all of Tumwater and all of Thurston County,” she said.
McGregor wanted to make clear that the proposal was only at the option stage.
“This is an option that allows a developer to market the property,” he said. “It’s not a lease to build right away.”
This story was originally published June 24, 2020 at 5:45 AM.
