Burned-out Griswold’s building in downtown Olympia to become mixed-income housing
Editor’s note: This article has been updated with city council action Tuesday night.
A deteriorating building in the heart of Olympia’s downtown is now poised to be demolished and turned into mixed-income housing.
Originally built in 1928 as the Avalon Theater, the building at 308 Fourth Ave. E. was more recently home to Griswold’s Office Supply, which burned down in 2004. Despite several attempts at redevelopment, it’s been vacant ever since, leading the city to purchase the building in 2016 for $300,000.
Under an agreement approved unanimously by the Olympia City Council on Tuesday night, the city will pay to demolish the building before selling it for $50,000 to Urban Olympia, a development company owned by Walker John with a large presence downtown.
The contract also specifies that Urban Olympia will apply for the Multifamily Tax Exemption (MFTE), which means the project will not pay property taxes on the value of the building for 12 years. John, who did not respond to a request for comment for this story, has availed himself of the 8-year version of the program in recent years, receiving $1.4 million in property tax savings.
However, unlike John’s other nearby tax-exempt buildings — which include The Lurana, 321 Lofts, Annie’s Artist Flats, and Westman Mills — the project built on the Griswold’s site will be contractually obligated to provide some units deemed affordable to those making 80% of Area Median Income, which in Thurston County is $55,500 for a two-person household.
According to the Housing Needs Assessment report, an “affordable” apartment (defined as costing no more 30% of monthly income) for that household would cost less than $1,400 per month.
Under the contract terms, 60% of the units must be rented at affordable rates for 12 years. That percentage then drops to 30% of units from years 13-15, then finally to 20% of units, which must remain affordable for a full 20 years. (Twenty percent is the minimum percentage of affordable units required under the terms of the 12-year MFTE program.)
A woman who identified herself as the development manager for Urban Olympia answered the phone for John on Monday but declined to give her name or comment on the project, saying it was in the early stages.
But the contract spells out a specific timeframe for Urban Olympia to develop the property. The sale must close within 30 days of demolition, from which point the company has 10 months to begin construction. There are deadlines within that period for Urban Olympia to submit plans for design review and building permits in successive 120-day installments.
“To be able to get affordable housing in downtown with a timeline for action on a piece of blighted property, it checks a lot of boxes,” said Mike Reid, the city’s Economic Development Director.
The city has previously only had one taker on the 12-year MFTE, which has been offered for decades. Reid said the city is selling the property at a discount — its appraised value is $212,300, according to Thurston County Assessor’s Office records — in exchange for the commitment to develop affordable housing. He estimated that the property could accommodate about 30 units of housing and envisions downtown service workers living there.
“Having them commit to a pretty aggressive timeline really was part of the negotiation,” said Reid, who added that John first approached him last November about the property.
Attempts at developing the property have thus far failed. After the fire, it was purchased by a Silicon Valley transplant, Clifford Lee, who planned to develop it, but never did and owed the city more than $9,000 in back taxes as of 2016. After the city bought it from Lee, a subsequent plan to sell to an investor who planned to create a co-working space also fell apart, and the building continued to sit vacant.
It is currently fenced off and has a mural painted over the front that reads “Respect & Love Olympia.”
Demolishing the building will cost the city approximately $309,000, according to a staff report.
Reid said that he hopes more private-sector developers see this project as evidence that affordable housing can be a viable investment.
“We’re trying to get someone to prove the concept that private sector development can do affordable housing development in downtown,” Reid said. “It really was a priority of the city of, ‘let’s get someone to test this and show that it can be done.’”
This story was originally published May 4, 2021 at 2:22 PM.
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