Olympia adopts Capital Mall Triangle subarea plan with housing, economic development tweaks 

The Olympia City Council approved the Capital Mall Triangle subarea plan on Tuesday, with amendments on affordable housing incentives and economic development options.  

The Capital Mall Triangle subarea plan has been in the works for over two years. It aims to transform the vicinity of Capital Mall into areas that will convert into urban neighborhoods with mixed land use.  

In a 6-1 vote, the council adopted the first reading of the Subarea Plan with a couple of changes proposed by Councilmember Dani Madrone: 

Community Planning and Development Senior Planner David Ginther presents the Capital Mall Triangle subarea plan at the Olympia City Council meeting on Tuesday, July 9, 2024.  

JOLT Staff Photo via Zoom

Affordable housing height bonus 

• Adjusting the affordable housing height bonus from requiring 100% affordable units to 30%, allowing for mixed-income developments.  

David Ginther, senior planner with the city's Community Planning and Development (CP&D), noted that the recommended affordable housing height bonus overlay applies to the core of the subarea. It increases the maximum building height from 105 feet to 130 feet, essentially allowing a couple of extra floors.  

The current plan states that 100% of the units must be affordable for households earning 80% or less of the area median income to qualify for this height bonus.  

During the discussion, Madrone proposed amending the provision in the plan by reducing the affordable unit requirement from 100% to 30% to qualify for the height bonus. She said this change would allow for mixed-income developments while incentivizing affordable housing. The councilmember added developers could choose to include more than 30% affordable units, but the lower threshold ensures that mixed-income projects can still benefit from the height bonus incentive. 

Olympia Councilmember Dani Madrone recommends removing tax increment financing references in the subarea plan and seeks funding opportunities for available economic development tools.  

JOLT Staff Photo via Zoom

Tax Increment Financing 

• Removing specific references to tax increment financing (TIF) and economic development districts. 

Ginther provided some information about TIF, which he said is a newly allowed funding tool in Washington state.  

TIF uses increases in property tax revenue within a defined area to fund public infrastructure. The increased tax revenue from rising property values in the TIF area goes towards paying for public improvements, potentially funding things like streets, sidewalks, utilities, transit facilities, parks, and affordable housing. 

Ginther added that any TIF-funded projects must be shown to catalyze private development in the area.  

Madrone recommended removing LU 11, the strategy discussing studying and potentially establishing a TIF area. She also suggested removing TIF references throughout the plan.  

Instead of specifying TIF, Madrone proposed modifying LU 12 to use broader language about seeking funding opportunities. She suggested changing the wording to "seek funding opportunities, including an in-depth assessment of available economic development tools." She aims to keep options open and allow for consideration of various economic development tools without prematurely focusing on TIF. 

Madrone seeks a thorough evaluation of all potential funding mechanisms before committing to any particular method. 

Plan recommendations 

The subarea plan covers the area surrounding Capital Mall, bounded by Cooper Point and Black Lake Boulevard. Extensive community engagement was conducted, including 29,000 outgoing emails, five community meetings, stakeholder workgroup meetings, presentations, and briefings for organizations and city committees, and received 300 written comments.  

According to Ginther, the main themes from public input include safe and comfortable mobility, complete urban neighborhoods, and environmental commitment.  

Ginther enumerated some recommendations in the Capital Mall Triangle subarea plan: 

The Capital Mall subarea plan aims to transform the vicinity of Capital Mall into areas that will convert into urban neighborhoods with mixed land use. 

JOLT Staff Photo via Zoom

Land Use: 

• Create a flexible public space of about half an acre 

• Add three additional smaller public amenities  

• Make development regulation changes, including addressing commercial parking regulations and building heights with slight increases in certain areas and a bonus for affordable housing 

• Conduct a corridor study for Harrison Avenue 

Transportation:  

• Enhance crosswalks 

• Create a low-stress bike network 

• Coordinate with transit agencies  

• Plan for new street connections with new development 

• Consider roundabouts 

• Adjust block sizes for more flexibility 

Affordable housing:  

• Implement an affordable housing height bonus 

• Analyze existing city-owned properties for potential affordable housing 

• Partner with affordable housing developers  

• Consider strategic land purchases 

• Economic development:  

• Explore tax increment financing (TIF)  

• Consider façade improvement programs 

• Support cooperative businesses 
• Explore ground-floor commercial financing options