Port Commission approves option agreement with developer for Tumwater land
After nearly two hours of contentious public comment Monday night, the Port of Olympia Commission voted 2-1 to approve a deal that grants the option to lease 200 acres of Tumwater land to California-based developer Panattoni.
The option deal gives Panattoni the “right to be first in line” to submit a proposal to develop the site, according to Commissioner Joe Downing.
The 2-1 vote came amidst vigorous objections from Commissioner E.J. Zita about the terms of the deal, especially the port’s commitment to pay up to $100,000 per acre for potential environmental remediation.
No specific development has been proposed, though Panattoni has developed large-scale warehouses before, including an industrial park in Burien.
The site is part of a larger tract of land dubbed New Market Industrial Campus that could be used for commercial, business park, or light industrial use. It includes 31 current public and private sector tenants, as well as a large swath of forest, according to the port’s 2014 master plan. It is situated next to Olympia Regional Airport, south of Tumwater Boulevard between I-5 and Center Street.
Forest covers 95 acres, about half of the 200 acres included in the deal, according Allyn Roe, the port’s business and real estate director. Under the deal, 20% of those trees would be retained, Roe said.
The option agreement lasts 10 years. But if Panattoni does not develop the property within five years, the port has the right to chose another developer.
One aspect of the deal that irked a number of people who spoke during public comment was the port footing the bill for environmental remediation. The costs won’t be known until the port and the city of Tumwater complete a Habitat Conservation Plan, which they now have two years to do.
However, a cost projection prepared by the port staff indicated those costs could rise to $1.3 million per year by 2030.
Several financial projections were shown for the first time at the meeting Monday night, with Zita and other speakers cautioning that the deal was being pushed through without adequate information.
Last week, Tumwater City Council sent a letter to the Port Commission asking them to limit the size of any potential warehouse that could be developed on the site, among other concerns.
“When you have this much public opposition, when the Tumwater City Council isn’t even happy with this, when your neighbors (at Bush Middle School) are not happy with this, when members of the public are discussing whether they have to sue about environmental issues, I’m not sure you really are going to get a good deal,” said Lyn Fitz-Hugh.
Zita said that based on the new financial documents presented at the meeting, the port may become bound to expenses greater than the revenue it will bring in.
“Even under the best-case scenario, from a developer’s perspective, where the site is fully developed – even if we make this very optimistic assumption – we are losing over $13 million over 30 years,” Zita said. “We need a more complete planning process so we have full understanding of the potential costs, benefits, and risks. We have not done that yet.”
Downing said that while the concerns raised were valid, the option is only a preliminary step, so they don’t need to be addressed at this stage.
“This is an option, and not a project,” Downing said. “Assuming we approve this lease option, then the conversation can begin about community amenities, how to arrange this land, and we’re going to have EIS reports on any possible development.”
At one point while Downing was speaking, Zita held up a card that read “$13M loss over 30 years!!!”
Downing admitted the deal has prompted an unprecedented amount of community interest.
“No other issue has generated more public comment,” Downing said.
On Monday afternoon, students from Capital High School Climate Club organized a protest outside the office of Kidder Matthews, the real estate firm that brokered the deal with Panattoni.
This story was originally published July 14, 2020 at 10:06 AM.