Olympia’s decision to sell a vacant site to the Low Income Housing Institute of Seattle for its $11 million Olympia Commons project is very promising news.
There are many upsides for Olympia and the community as this project, offering 43 units of low-income housing to formerly homeless young adults, military veterans and disabled individuals, moves forward. The new location is at 318 State St., a half-block from the Intercity Transit station.
We objected to LIHI’s first choice, a property owned by the Rants Group next door to Percival Landing. Key city leaders felt that the Rants site was better suited for upscale housing that might assist the city’s long-term effort to bring higher priced housing — and tax revenue — into the city core.
Moving the lower-income housing project a few blocks away preserves that chance of higher-end housing — although Pat Rants said his company’s options include commercial rather than residential uses under current zoning.
Our hope is the market for housing can work to Rants’ advantage in turning the site into a compelling residential option. Long term, the city needs more diversity in income and wealth among its downtown residents.
Census data analyzed by the city’s housing office show there are high concentrations of lower income residents in the city core, and more than 1,263 of 1,514 existing housing units downtown are either subsidized or affordable for those with low to moderate incomes.
Another 299 units of market rate housing, which likely will rent for higher prices, are under construction. This includes a 138-unit Columbia Heights project at Columbia Street and East Fourth Avenue that could serve as a market bellwether for housing demand. Other projects are on Legion Way, 12th Avenue, Franklin Street and Capitol Way North.
Many details on LIHI’s four-story Olympia Commons still must be worked out, but Sharon Lee, executive director for the group, is hopeful construction can begin this year on the once-polluted site. She said the building will face State Street, be attractive, have a community room and an on-site manager.
Tenants could move in late next year or early in 2017. Lee describes the current neighborhood as a bit industrial and a bit desolate, and she thinks her project can help jump-start other housing in the area, which city officials also hope to see.
The switch of sites cost LIHI an undisclosed amount of money, including loss of earnest money and costs for new design work to reorient the building on the larger site.
LIHI has secured financing that includes $3 million from the state Housing Trust Fund and roughly $8 million in private tax credits authorized two weeks ago by the State Housing Finance Commission, Lee said.
“I think it’s a good site. I think it’s going to work very well,” Lee said. “It’s at an extraordinarily good price.’’
Under the sale agreement that hasn’t yet closed, the city offered the State Street site for just $100,000 — far less than the $296,500 assessed value. City Manager Steve Hall said the 0.33-acre gravel lot, which was polluted when the city bought it from the state Department of Transportation for $1.28 million in 2008, is one of many below-market transactions the city has entered into.
For example, Olympia sold a former city planning building for $1 to a community group that uses it for shelter and housing for homeless families, and it leases The Olympia Center for the Performing Arts and Olympia Farmers Market properties at low rates.
Much of the money paid to DOT was used for cleanup of legacy pollution issues that still surround the new building site. But the city indemnified LIHI against pollution liability on the cleaned portion of land it is buying, and the housing group retains the right to buy the rest of the city site within five years, once it is certified as clean, according to Hall.
Discussions between the city and DOT — described by both parties as amicable — are ongoing over further cleanup responsibilities and costs. The city also is working with an adjacent property owner, Acme Fuel, to deal with pollution that appears to have migrated onto its site.
So far, so good. We look forward to seeing how Olympia Commons unfolds.