Thursday, December 2, 2010

Hotel Project Application Submitted for 'Mistake on the Lake' Building - Public Hearing on Isthmus Rezone on Tuesday

Above: The view of the state Capitol Building from the ninth floor of The Views on 5th Avenue, aka "The Mistake on the Lake."

Hotel Project Application Submitted for 'Mistake on the Lake' Building - Public Hearing on Isthmus Rezone on Tuesday

By Janine Gates

It took less than five minutes yesterday morning for the city of Olympia’s planning department to deny a "tenant improvement" permit application to convert downtown's nine-story ‘Mistake on the Lake’ from an office building to a hotel.

The project was submitted to the city's planning department on November 10th. Tenant improvement applications are usually used for straight-forward interior remodel projects.

Nothing about the former state Department of Corrections building, now called "The Views on 5th Avenue," however, is straight-forward.

So, later that same afternoon, project engineer and architect Glenn Wells submitted a new application, a land use application, for the proposed hotel project.

According to the applicant's plan, the first floor of the nearly 75,000 square foot building would include a lobby, swimming pool, fitness center, dining/lounge area, a kitchen, laundry and meeting areas. The second to ninth floors would have 16 rooms per floor for a maximum of 128 rooms.

For comparison, the nearby three-story Phoenix Inn has 102 rooms and an indoor swimming pool and the eight-story Governor Hotel has 119 rooms and an outdoor, seasonally open swimming pool.

Todd Stamm, city planning manager, says he put the item on the city's site review planning agenda as a public courtesy due to the controversial nature of the area. The city's site review planning group meets on Wednesdays to review presubmissions for proposed land use projects.

The tenant improvement permit application denial appeared to be a no-brainer for staff members.

“Short version: this permit application has substantial issues for fire and police,” said Stamm. Other staff concurred. The city’s lead building official, Tom Hill, agreed, saying that the application has multiple issues that need to be addressed.

“Yes, we need a land use application,” said Hill.

Wells was not at yesterday's early morning meeting, saying later that he actually wasn’t notified that it was on the agenda. Wells says he didn’t know if his tenant improvement application would be accepted or denied, and had a land use application ready to submit.

“There’s no reason why the city would deny a change of use from office to hotel and not issue us a building permit,” said Wells.

A tenant improvement application can often be easily handled by city staff when it involves changes to the interior of a building. A land use review combines State Environmental Policy Act (SEPA) review, the design concept, a site plan review, and triggers an opportunity for public comment.

Asked to comment today on the hotel proposal, Jerry Reilly, chair of the Olympia Capitol Park Foundation said, "This has always been a concern in the background that someone would develop the building and we'd have to live with it for the next 50 years. Hopefully, this may give impetus for efforts to acquire the building for demolition purposes and incorporate it into an isthmus park."

The Olympia Capitol Park Foundation is raising funds to acquire a portion of the isthmus for a public park.

Above: From this viewpoint from Budd Inlet, the building in question partially obscures the state Capitol Building.

City Council Public Hearing Next Tuesday: Decision Will Determine Path of Project

The current zoning for that parcel allows a hotel on that site. However, a critical city council public hearing scheduled for next Tuesday, December 7, will determine the path of the proposed hotel project.

In January 2010, the Olympia City Council adopted an ordinance for the interim rezone of certain properties on the isthmus between the southern end of Budd Inlet and Capitol Lake. The interim rezone reverts back to the zoning that existed prior to January 1, 2009. The newly adopted rezone is intended to last until the end of 2010. The zoning is now Urban Waterfront (UW) and limits building heights to thirty-five (35) feet.

The reason for quickly adopting the interim ordinance last January was to prevent the filing of any new development applications under the zoning in effect at that time while allowing sufficient time to further evaluate the appropriate long term uses and allowable building heights for the area.

The city's Comprehensive Plan update is currently underway. To create a permanent rezone, the council will need to adopt a final rezone and comprehensive plan amendment by the end of the year.

In a November 1 meeting of the city’s Planning Commission,the Planning Commission recommended the creation of a new zoning category, urban waterfront-housing (UW-H), but with a height restriction of 35 feet. Simply put, it’s a new category in an existing zone.

On Tuesday, the city council will hold a public hearing and take action to consider two proposals for the isthmus: their own urban waterfront interim rezone ordinance or the planning commission’s new one, urban waterfront-housing with height restrictions.

“We’ll see what they do. The Urban Waterfront (UW) zone allows a hotel. If the interim ordinance were to lapse, it would revert back to Urban Waterfront - Housing (UW-H), which would not allow a hotel,” says Brett Bures, city associate planner.

The Views on 5th Avenue property is owned by a limited liability corporation and includes partners Jim Potter and Scott Shapiro. The area next door is the parcel owned by Triway Enterprises and is the site of the proposed "Larida Passage" project.

Shapiro, contacted by telephone to comment on the new land use application said, "A hotel is the highest and best use for the property right now - it's best for it to be occupied and would provide tax revenue to the city. I think it would be a win-win situation for everyone."

Above: The men's bathroom on the ninth floor. Hey, at least it's clean.

The owners estimate that it will cost $1.8 million in construction costs to structurally retrofit the building so that it will be suitable for a possible hotel. Asked to comment on this figure and the proposed hotel, Shapiro said, "It will be a sizable will create construction jobs in the short term and jobs for the long term. Environmentally, we are recycling an existing building as opposed to demolishing it and putting it in a landfill." Shapiro said the owners will be seeking LEED certification and that the facade will look "much nicer." LEED stands for Leadership in Energy and Environmental Design, a green building certification system.

Above: The Views on 5th Avenue - International Style.

Neil Falkenburg, asset manager for the property provided a tour for this reporter yesterday afternoon of the years-vacant, gutted-out former state Department of Corrections building. Taken to the ninth floor, Falkenburg showed a poster of what the building would look like after a remodel.

“At the time we were envisioning the property to be an office building, the city’s design review committee wanted us to stay true to the building’s original design, called an 'International Style.' It (the design) will not change as a hotel - it’ll stay the same," Falkenburg said.

Another building near the property, a single story building covering 17,000 square feet, is owned by a related partner group, but is not part of the current permit request, says Falkenburg.

Pacific Real Estate Partners agent Troy Dana says the property, which has a spectacular 360 degree view of Olympia, Budd Inlet and the state Capitol Building, is currently on the market for $9.5 million.

Asked if he will now try to market the property to various hotel chains, Dana said, “It depends on what the owner asks me to do - I don’t think we’ll limit ourselves to any one market segment. I’m not actively marketing the property right now…I’m just waiting for Scott (Shapiro) and Jim (Potter) to give me my marching orders.”

For more information, contact Brett Bures, associate city planner, at 753-8568 or Todd Stamm, city planning manager at 753-8314 or go to

For more information about the Olympia Capitol Park Foundation, go to

For more information on the city of Olympia's isthmus zoning issues, the city's Planning Commission, or Olympia City Council actions, see other articles on and type keywords into the search engine.

Specifically, see, October 19th, “Planning Commission Tables Isthmus Rezone Discussion” for recent background information

Above: The current interior of the building on the ninth floor on "The Views on 5th Avenue."