The Port of Olympia commission Monday night voted to move forward with a plan that could see the port acquire three commercial buildings in Lacey — a potential first for the port district, which is known for its real estate holdings in Olympia and Tumwater.
The commission also decided — in a move suggested by Commissioner E.J. Zita — not to delegate the entire authority for the purchase and sale process to Executive Director Ed Galligan, but to give the commission more say in whether to finally acquire the property.
The three buildings of varying sizes, which could cost the port $6.5 million, are in Lacey on Willamette Drive Northeast, an area of the city also known as Meridian Campus. The three buildings are about 70 percent occupied, said Mike Reid, senior manager for business development for the port. The buildings are considered “flex industrial” space, a combination of warehouse and light industrial. Existing tenants in the buildings include Stottle Winery and Salish Sea Organic Liqueurs.
Before the port plunks down $6.5 million, however, it will begin by putting down $75,000 in earnest money, which will allow the port to conduct a feasibility study about the buildings over the next 75 days. If the port decides to move forward with the acquisition, the $75,000 will be applied to the purchase price, Reid said. If the port decides not to move forward, it must do so before the end of the 75-day period, or it won’t get its earnest money back.
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Galligan and port staff would typically handle those details, but Zita suggested the results of the feasibility study come back for commission review before the proposal advances.
“That allows us to exercise our responsibilities with public finances,” Zita said.
The commission agreed and added the following to the motion that was approved: “The feasibility contingency may not be removed without prior approval of the port commission.”
Although the commission voted to move forward with the proposal, Commissioner Joe Downing also said he wasn’t convinced that acquiring the property was “port-worthy” — concerned that it wasn’t related to the port’s economic development mission.
“I just don’t quite get the connection at this time,” he said.
But Reid defended the proposal, saying the port has discussed expanding its footprint and diversifying its revenue stream in the past. The buildings also give the port the option of converting them to something else, such as a business incubator or for agricultural purposes — an idea that Downing and Zita both campaigned on.
“We don’t have to build them from scratch,” Reid said. “The buildings generate revenue from day one.”
Real estate is one of four divisions at the port. The others are the marine terminal, Swantown Marina and Olympia Regional Airport.
Zita acknowledged that the port’s real estate division has done well.
“We should take a look at it,” said Zita about the Lacey property.