Olympia council OKs buying burned-down Quality Inn site to provide homeless services

The Olympia City Council on Tuesday approved the purchase of a parcel of land near Interstate 5 that used to be a Quality Inn.

The council approved the purchase of the 1.41-acre parcel for $2.175 million from the hotel’s owner, Chandra Holdings. The city plans to have the existing structure demolished and replaced with a mitigation site for people who are homeless in the long term, but it is still working out details for what it will be in the near future.

The city will pay for the parcel using American Rescue Plan Act funds it received this year.

The Quality Inn has had a rough couple of years. In May 2020, a shrub fire destroyed the main building of the hotel and displaced 80 people who were staying there, including 15 homeless families. Olympia firefighters were able to prevent the fire from spreading to a second building on the property, but in May 2021, that second building caught fire and was destroyed by the blaze.

As a result, the value of the property plummeted. In 2019, the hotel was valued at roughly $3 million by the Thurston County Assessor’s Office. After the fire, the Assessor’s Office put the market value of the property at $1.5 million.

So why is Olympia paying roughly $700,000 over market value for the property?

According to Assistant City Manager Keith Stahley, the assessed value is not an accurate measure of a property’s sale value. Instead, he said the price was agreed upon after the city and the seller had their own appraisals done. The appraisals valued the property at $35 per square foot, Stahley said.

Chandra Holdings will be responsible for removing the existing structure from the lot and any costs associated with that process, Stahley said.

What will become of the property in the immediate future is “up in the air,” Stahley said. Once Chandra Holdings removes the charred remains of the Quality Inn, the city will meet with some of the surrounding property owners to discuss what will happen to the property.

The city would like to use it as short-term emergency housing facility, Stahley said, but first, the city needs to develop a management plan and draft a contract to manage whatever facility ends up occupying the property, “whether it be [managed] camping or RV parking or a mitigation site of some sort.”

“Long term, it’s our intent to build some sort of supportive housing facility there,” Stahley said. This would be similar to what is being constructed at 2828 Martin Way, where there will be 64 supportive housing units and a 60-bed shelter.

The city will work with Thurston County and other “potential funding sources” to turn the parcel into supportive housing, according to a staff report on the purchase. “It takes time to develop the financing and get approval for this sort of project,” Stahley said.

This story was originally published July 14, 2021 at 5:45 AM.