Port of Olympia authorizes sale of Commerce Business Center

The Port of Olympia Commission authorized Interim Executive Director Rudy Rudolph to execute a purchase and sale agreement of the Commerce Business Center to 1892 Holdings, LLC for $9.6 million on Monday, December 11.

The center is a cluster of three warehouses with a combined area of around five acres on Willamette Drive in Lacey. The Port had issued a $17.3 million bond in 2016, which was partly used to purchase the property for $6.5 million in 2017.

An appraisal conducted by MCA Realty, Inc. in August showed that the property is valued at $9 million.

Real Estate Senior Manager Clarita Mattox presented to the commission a financial analysis of the deal showing that the property yielded an 18.2% return.

According to the analysis, the property generated $13,460,677, which includes the proceeds from the sale. Subtracting the debt used to purchase the property, the cost of replacing the roofs, depreciation costs, and other expenses, the property netted $1,184,033.

Mattox affirmed that the deal was “a winner” upon Commissioner Amy Evans Harding’s inquiry about her opinion on the purchase.

“This was an unsolicited offer. So anybody knocks on your door, and you're going to have a profit of this level, you do consider the sale. This would be a good move by the port, I believe,” Mattox said.

1892 Holdings already agreed to the purchase agreement of the Commerce Business Center in November. The company, which is managed by Corliss Management Group, a real estate development company, identified the three buildings as an opportunity to expand its business portfolio, according to documents prepared for the meeting.

As part of the purchase agreement, the company will have a 70-day due diligence period to investigate the property and withdraw from the purchase if they wish to do so.

Before authorizing the sale, the commission opened a public hearing about declaring the property as surplus to the port’s needs. The declaration was implemented through a resolution which also removed the three warehouses from the port’s comprehensive scheme of harbor improvements.

Former Port Commissioner Bill McGregor was present during the public comment section of the Monday meeting to discuss the original purchase of the property.

McGregor said that the original intent of buying the property was to help small businesses get started and generate jobs. It would have also allowed the port to invest in Lacey, where the port didn’t have properties at the time of purchase.

He added that when the purchase was presented to them, the commission was informed that the estimated return on investment would be 6%.