Owner proposes to convert Olympia Hotel at Capitol Lake to apartments

The hotel overlooking the lake, freeways and more is the county's second largest


The Olympia Site Plan Review Committee, on Wednesday, April 26, heard a proposal to convert the Olympia Hotel at Capitol Lake to multifamily use.

The building at 2300 Evergreen Park Drive SW has 192 hotel rooms and is the second largest hotel in the county after the Great Wolf Lodge in Grand Mound.  

The project applicant, Philip Stewart, explained that the property owner is interested in exploring the option of converting the use of the building to a multifamily for-rent apartment building.  

"The intent would be to do minimal changes to the building itself, and no major infrastructure work involved," he said.

The plan includes combining existing guestrooms into one larger apartment unit, while others may remain the current size that would serve as studio apartment units.

Stewart inquired about the process involved in converting the building from a hotel to a multifamily.

Conversion would require a zoning change

Olympia's associate planner Paula Smith informed that the building is in the designated retail and commercial zone within the Evergreen Park Planned Unit Development (PUD), which has its own zoning regulations and development standards.

Looking at this classification, Smith said apartments are not listed as a permitted use.

She advised the applicant to go through the process of amending the Evergreen Park PUD standards as a text amendment application. That process involved a public hearing before the Olympia Hearing Examiner, which would provide recommendations to the city council for final decision.

Smith told the applicant that going through the process of changing the use for apartments in that zone might provide more opportunities for the whole zone itself.

After obtaining the city council decision, Smith said the project would have to go through the second land use process for review.

"So this would be required because establishing four or more multifamily or apartment units within a building requires land use review," Smith said, adding that they would be looking at proposed changes to the site, including landscaping and changes in parking.

Smith noted that the hotel has many parking spaces. If the current parking code for multifamily is applied, the project may have 293 stalls.

Affordable housing and historic preservation incentives

Jacinda Steltjis, Affordable Housing Program manager, informed the applicant that the city offers incentives to developers.

She said the project might be exempted from school, transportation, and park impact fee up to 80% if the developer meets the affordable housing definition: rent and utilities are less than 30% of the tenant's income.

"We are also specifically targeting tenants that are 80% or below of area median income," Steltjis said.

She added that the developer might send a letter expressing the intention to apply for the incentives to herself or Tim Smith, Community Planning and Development deputy director.

Olympia Historic Preservation Officer Holly Borth discussed historic preservation incentives that the owner might qualify to receive.

"The incentives depend on its level of integrity and how much it reflects its original design," Borth said of the building built in 1971.

The owner might be eligible for the Olympia Heritage Register, which requires approval from the Heritage Review Board. Listing on the register can qualify the owner for special tax valuations, easing some property taxes.

Another potential incentive is being eligible for the National Register, which review is administered through the state office – the Department of Archeology and Historic Preservation.

"If that qualifies for the National Register, that will open up opportunities for the federal historic tax credit, which could help reduce income taxes on the property," Borth explained.

To qualify for both the special valuation and federal tax credits, Borth added, the building must comply with the National Park Service standards for rehabilitating the historic property.


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  • jimlazar

    The advice of the City, to submit a "text amendment" to a Hearing Examiner process is simply evading the intent of the law.

    A "text amendment" simply changes the ALLOWED USES in a zone, without changing the name of the zone. That is a re-zone in a pair of silly looking pajamas. It should be called a re-zone and processed like a re-zone.

    The Growth Management Act required that "zoning" be done in the Comprehensive Plan process. This is an open, inclusive, and well-defined process.

    The process for Comprehensive Plan amendments includes:

    a) Application by a citizen, landowner, or organization;

    b) Consideration by the City Council as to whether it SHOULD be considered;

    c) A processing fee;

    d) A supplemental Environmental Impact Statement -- not a "determination of non-significant impact"

    e) A public hearing before the Planning Commission

    f) A public recorded recommendation by the Planning Commission;

    g) A final approval or rejection by the elected city council, not the appointed hearing examiner.

    Allowing a change in zoning via a "text amendment" that does not change the zoning map is horsefeathers. Just another way to deny the public the right to fully participate in the decision, AFTER the environmental impacts are examined.

    In this case, changing from "hotel" to "apartment" would mean very different traffic patterns, in an area that is already traffic-challenged. A supplemental EIS is the right way to examine these kinds of impacts. That's what is required in a Comprehensive Plan amendment process. And it is what is needed.

    Friday, April 28, 2023 Report this

  • longtimeresident

    Why would anyone think that this building might qualify for the Olympia Heritage Register - you have got to be kidding.

    Saturday, April 29, 2023 Report this

  • HarveysMom

    This hotel, isn't it the former Red Lion? The site of those former Christmas tree displays and large group catering? It's in such a gorgeous location, treesy setting, up on courthouse hill with its great views, I cannot imagine anybody changing its use to multi family apartments, much less low income housing. High end condos more likely spring to mind! The developer must have rocks in his head to ignore the marketable commercial setting in favor of multifamily & low income housing. What's the game here? Maybe the property is so old it needs substantial remodeling? Is the developer phishing for governmental money to replace his own investment? There must be some 'game' going on.

    Saturday, April 29, 2023 Report this