Thurston Regional Housing Council OKs recommendation to award $950K for Sterling Pines housing project 

The Thurston Regional Housing Council approved awarding the Housing Authority of Thurston County (HATC) $950,000 from the Opportunity Fund to finance building renovations for the Sterling Pines project, which would convert 24 affordable housing units.  

Meg Martin, a member of the Affordable Housing Advisory Board, gave an overview of the board's recommendation to award the Housing Authority funding to partially finance the work.

At the RHC meeting on Wednesday, April 9, Martin said the project faced unexpected and extensive repair needs that were not initially anticipated. The county's Housing Authority will use the funds to address significant building maintenance issues to ensure the habitability of the housing units.  

In February, the Housing Authority submitted a capital project application to the RHC, seeking $950,000 for work at its Sterling Pines project.  

Located at 5895 Capitol Blvd. SW, the former Tumwater Inn and Suites, the project involves removing and replacing drywall and insulation in walls and ceilings, with work scheduled for April and May 2025.  

During the board's review, Martin noted the application scored high, earning an average of 106.5 out of 120 points.

However, the board determined the project was better suited for Opportunity Fund financing. Their decision was based on three factors: 

• The timeline in which the funds are needed by HATC.
• The unexpected degree of mitigation needed and associated costs of the mitigation qualify as an emergent need. 
• The request for proposal received more funding requests than funding available. 

In 2023, the HATC acquired the former Tumwater Inn and Suites through a Rapid Capital Housing Acquisition grant from the Washington State Department of Commerce. Since the purchase, long-term motel residents have been relocated to alternative housing, and rehabilitation of the property is underway.  

In the staff report submitted to the Housing council, it stated the $9.8-million project has received financial commitments from both HATC and Tumwater. HATC has already invested more than $700,000 of its own funds.

However, mitigation needs have significantly exceeded initial projections, prompting the S950,000 funding request to ensure project completion.  

"HATC has already increased its financial commitment to this project by over $500,000," stated the report.

If it failed to secure an Opportunity Fund, HATC would be forced to inject more of its cash reserves to complete the project.

This would result in decreasing services, deferring considerations of new acquisition and development opportunities, postponing capital improvements to existing properties, and potentially raising rents on current HATC units.  

The Opportunity Fund was established by the Thurston Affordable Housing Advisory Board to address funding needs that fall outside the RHC's annual funding cycle. It is designed to support critical housing initiatives that cannot wait for the next annual funding round.  

RHC conducts its request for proposal process in February, with funding awards announced in May.  

The Opportunity Fund has $1.8 million available. If the Sterling Pines project receives its requested $950,000, the fund will have $832,000 remaining. The fund will be replenished with new revenue in January 2026. 

Tom Webster, Housing and Homeless Prevention manager, said they will bring the recommendation to the Board of County Commissioners in June for final approval.