Where will they go? Here are Thurston’s plans to house those displaced by freeway cleanups
Thurston County and local cities plan to purchase a hotel with state money to house people being displaced by the governor’s initiative to remove homeless camps along Interstate 5.
The Washington state Department of Commerce agreed to fund about $37 million of a $55 million proposal crafted by Thurston County and the cities of Lacey, Olympia and Tumwater, said Tom Webster, manager of the Thurston County Office of Housing and Homeless Prevention.
Webster provided an update on the state’s response to the proposal to the Thurston County Regional Housing Council on Wednesday. The proposal outlined how the partners would use state funding to further Gov. Jay Inslee’s rights-of-way initiative.
The statewide initiative has identified seven areas in Thurston County where camps will be removed, according to county documents. They include Interstate 5 interchanges near Lilly Road, Pacific Avenue and Sleater-Kinney Road as well as state-owned land on Wheeler Avenue, Plum Street, 14th Avenue and Henderson Boulevard.
Some of the camps already have been removed this summer, prompting Inslee to call the initiative an “early success.” On Monday, state Department of Transportation crews were spotted cleaning a former camp along Pacific Avenue in Olympia.
Keylee Marineau, Thurston County’s Homeless and Affordable Housing Coordinator, said the state has cleared a site on Lilly Road, but progress has been slowed due to limited available housing for those being displaced.
“No one is being removed from the rights-of-way without a meaningful offer of housing or shelter that is better than living in a right-of-way outside,” Marineau said. “They’re not being offered shelter or housing unless there’s something actually available.”
A tale of two hotels
Webster said the $37 million allocated by the state includes money to acquire an unspecified hotel for $15 million, $5 million to rehabilitate the hotel and $2 million annually for two years of operating costs.
“That is a big deal,” Webster said. “Initially, the state allocated $19 million, so our request to put in a large proposal paid off. … Our full expectation is that no local funds will be required for that hotel program for the next two years.”
However, the state did not support plans to purchase a second $20 million hotel, he said. The second hotel would have had the same rehabilitation and operating costs as the first, according to a draft of the proposal.
The county and cities could have applied for another competitive grant from the state to secure the second hotel, but Webster said staff could not get the application ready by a Thursday deadline.
“We really want to focus on making sure we do a good job with the acquisition of this first hotel,” Webster said. “There’s still a lot of work to be done to make sure this happens and happens well.”
Webster said they may be able to apply for more competitive state funding in the fall. But it remained unclear if the county and its partners will be able to secure a second hotel.
During a July 27 Regional Housing Council meeting, Webster said it was “fish or cut bait time” for the second hotel.
A developer working with the jurisdictions had previously secured a purchase and sale agreement with the second hotel owner, he said. That agreement has a November deadline, he added.
“That puts the developer in a really tough position,” Webster said. “You either have to ask for an extension of that closing date which increases risk in front-end costs … or risks the owner of the hotel walking away.”
During both meetings, officials carefully avoided identifying either hotel because negotiations were ongoing.
The draft proposal indicateas that the jurisdictions plan to eventually convert the two hotels into permanent housing by the end of 2025.
Converting the hotels may cost roughly $19 million each and result in more than 200 affordable housing units, according to the proposal.
However, these long-term plans would require additional resources and were not part of the application process for the rights-of-way initiative, said Affordable Housing Program Coordinator Jacinda Steltjes.
Other proposed activities
In their proposal, the county and cities described several other activities aimed at helping those displaced by the rights of way cleanups.
The proposal includes 24 shelter beds at Unity Commons for three years, outreach services for those living on state rights-of-way for three years, and hotel vouchers for those fleeing domestic violence.
In June, the county issued a $3.4 million contract with emergency shelter provider Interfaith Works for the beds at Unity Commons, The Olympian previously reported.
The county also has plans to spend about $300,000 annually over three years to fund outreach services and about $200,000 for the hotel vouchers. These vouchers should make about 50 beds available within a 12-month period, according to a draft of the proposal.
To create more beds through 2023, the city of Olympia also has entered into a contract with the state to create a tiny home village on the east side of a 6.2-acre parcel on Franz Anderson Road in Olympia. About 50 homes will be able to serve roughly 60 people, according to the proposal. Creating and operating the village as well as improving the site will cost about $6.2 million.
Additionally, the state agreed to close a $2 million gap in funding for plans to construct more permanent supportive housing next to Unity Commons at 2828 Martin Way, Steltjes said during the July 27 Regional Housing Council meeting.
Unity Commons opened in December 2021 with 58 beds in a ground-floor shelter and 65 apartments in the floors above, The Olympian previously reported.
In Phase 2 of the project, an adjacent building will be constructed at the property consisting of 64 studio and 1-bedroom units for homeless and low-income seniors, according to the draft proposal.
Construction should start in the fall and be completed in roughly 15 months, according to the proposal. The $2 million budget shortfall emerged because of economic conditions, Steltjes said.
