Thurston County moves forward with closing $34.9M real estate deal in Olympia
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Thurston County works to close 2026 budget deficit
Thurston County commissioners are deciding how to close an estimated $36 million budget gap in the general fund, the county’s primary operating fund, for 2026.
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Thurston County is finalizing a $34.9 million deal to buy a seven-acre property in downtown Olympia.
The county queued up the sale of the property, located at the intersection of Plum Street Southeast and Eighth Avenue, in July.
On Tuesday, the Board of County Commissioners unanimously directed the county manager to proceed with closing the deal. This move marked a significant milestone in the county’s years-long efforts to consolidate its public services and address its space needs. The decision came almost nine months after the board committed to creating a new courthouse campus while scaling back renovations at its aging campus on Lakeridge Drive Southwest.
“This action represents more than six years of ongoing outreach and conversations with leaders, staff and the public on how best to provide services of government in an efficient and co-located manner,” Assistant County Manager Joshua Cummings said before the vote.
However, the deal is closing amid a challenging financial period for the county. Recently, the board has been grappling with spending cuts aimed at addressing a $36 million budget deficit in the county’s general fund.
The meeting in which the board made this decision was overshadowed by a stream of public commentators who largely opposed budget cuts to the Thurston County Sheriff’s Office.
Cummings acknowledged that the timing of the deal may seem odd. He explained that the county is paying for the property with a $50 million bond that was initially issued in 2022 to remodel the county’s dilapidated courthouse campus.
“The bond can only be used for the purchase or renovation of property and must be used by October 2025 or incur arbitrage penalties,” Cummings said.
During a Sept. 23 meeting, Commissioner Tye Menser said the money to repay the bond comes from a strictly limited source that’s related to county facilities. That money cannot go towards operational expenses in the county’s general fund.
The larger public is not always aware of that distinction, County Manager Leonard Hernandez said. Some funding the county receives is restricted to dedicated uses, he added.
Officials say purchase will save county money
On Tuesday, Hernandez said the county will see significant savings with this purchase because it will be able to exit leased space. That includes the Atrium, a building at 3000 Pacific Avenue that currently houses the county’s administrative headquarters.
“This is a huge win for Thurston County,” Cummings said. “It is an investment and a strong foundation as we transition out of leased space and build towards the future.”
Commissioner Wayne Fournier also framed the purchase as a cost-saving measure. He likened the move to buying a home instead of renting.
“The path towards financial independence is not renting, it’s owning,” Fournier said. “So, this is a good step forward. This will be the first step in being financially responsible and financially solvent in the future.”
Fournier has been critical of the county’s previous plan to use the $50 million bond to remodel the old campus. He reiterated that criticism on Tuesday.
“I said it many times, that’s putting lipstick on a pig,” Fournier said. “So, putting $50 million into something that we can’t use after five years, that doesn’t make sense either. So, we now pivoted, and we found an opportunity to invest in something that can be a forever home for all of us.”
Commissioner Tye Menser said the county got a good price on this property and it still has bond money left over for renovations.
“We’re taking advantage of the economic conditions in this instance and getting a really good price on something we need at a much-reduced rate… from what we were planning just about five years ago.”
Five years ago, the county considered asking voters to let it spend upwards of $250 million to construct a new courthouse in the same area.
That plan was scrapped due to the onset of the COVID-19 pandemic and the cost of executing a similar plan has only risen since then.
The board’s decision on Tuesday followed a due diligence inspection and research period. Rick Thomas, the county’s capital projects planning manager, said the county confirmed the buildings will meet its needs during that period.
He said the deal will be completed in full by the end of October.
What will happen to current tenants at the property?
The property the county is buying is part of an area known as Town Square Campus.
This campus is currently occupied by several Washington state agencies, according to Department of Enterprise Services Communications Manager Jennifer Reynolds.
- Health Care Authority. The lease for this agency costs the state $424,991.88 per year and is expected to expire Nov. 30, 2028.
- Traffic Safety Commission. The lease for this agency costs the state $195,928.92 per year and is expected to expire Sept. 30, 2028.
- Department of Commerce. The lease for this agency costs the state $998,737.68 per year and is expected to expire Sept. 30, 2026.
- Department of Corrections. The lease for this agency costs the state $83,622 per year and is expected to expire March 31, 2028.
Commerce has been planning to move out of its space by the end of its lease year, Reynolds said. DES and the Office of Financial Management will work with the remaining agencies to determine future needs if the county does not renew their leases, she added.
Notably, Thurston County is not purchasing all the buildings at the campus with this deal. As part of the sale, the county is buying four buildings and an adjacent garage on 8th Avenue and Chestnut Street.
Multiple leases at the campus will be transferred to the county once the deal closes, according to county documents. Those that will remain include four state agencies and two private companies.
- WA State Health Care Authority
- WA State State Traffic Safety Commission
- WA State Department of Corrections
- Washington State University
- HDR Engineering
- Transwestern Real Estate Service, Inc.
The lease for WSU expires on Dec. 31, 2028, the lease for HDR Engineering expires on Nov. 30 this year, and the lease for Transwestern Real Estate Service, Inc. expires on Aug. 31, 2031, according to Susan Melnyk, the county’s chief communication manager.
The leases for these tenants are expected to bring in about $1 million annually for the county, Melnyk said. That money will support maintenance and renovation efforts at the facilities, she said.
The money will not go directly into the county’s beleaguered general fund. However, she said revenue should help alleviate pressure on that fund.
So how long the county will allow these tenants to stay? Melnyk said talks about that are ongoing and more information will be shared once the deal closes.
This story was originally published October 2, 2025 at 5:00 AM.
