Major development again faces challenges in bringing grocery store to Gig Harbor
The future of the Village at Harbor Hill and a new Town & Country Market is back in play after a nearly two-hour debate Monday by the Gig Harbor City Council over traffic impact fees.
It was the latest turn in the one-step forward, one-step back process that for years has stalked the proposed development at Borgen Boulevard and Harbor Hill Drive.
Now the development faces higher costs not only from several delays but also from the increased traffic impact fees.
“The impact to our Village at Harbor Hill project will be an increase of over half-million dollars,” Jon Rose, president of Olympic Property Group, wrote in response to questions from The News Tribune after Monday’s council meeting.
“Can the Village absorb this plus the higher construction costs and bring rents for all our tenants to a level they can afford? We think it’s possible but not without redesigning the project.”
Earlier this year, the project was on hold as developers were reaching a settlement with a group called Protect Pacific Northwest, which primarily sought expansion of the project’s wetland buffer.
With that hurdle cleared, the project seemingly was back on track with plans for construction most likely to start in spring.
In the meantime, the City of Gig Harbor was considering how much to raise traffic impact fees, last updated in 2007, as part of funding for 18 road projects over the next 12 years to accommodate growth in the area.
The total cost of the road projects was estimated at $93.6 million. To support the projects, the city initially proposed developers pay a maximum traffic impact fee of $10,379 per vehicle trip during the evening peak hour.
Some City Council members Monday noted that a consultant had recommended that charging developers the maximum rate to cover their share of traffic costs would not slow development.
The Village developers, among others, disagreed, and warned there were no guarantees about the Village’s future. The developers and the Village’s neighbors from Harbor Hill and Heron’s Key came to the City Council’s Nov. 13 meeting and spoke against the amount of the proposed fee increase.
On Monday, the City Council took up the fees again.
“We know that for 10 years, the developers haven’t paid their fair share of traffic impact fees in Gig Harbor,” Councilwoman Jeni Woock said. “And those monies are gone. ... It is our job to make sure going forward, those traffic impact fees are paid.”
“We get one opportunity to make sure we get these traffic impact fees right before all the developers come and pull their permits,” she said.
During the debate, some council members offered various fee levels that could cover the costs of the road projects, depending on how many projects stayed on the list, but not deter development.
The haggling didn’t go over well with other council members.
“We are guessing what is reasonable,” Councilman Spencer Hutchins said. “You want to know what’s reasonable? Reasonable is having a list you believe in, that is legally defensible and funding it at 100 percent.”
In the end, four road projects were removed from the list, enabling the fee to be set at $2,896, up from the current $2,102.
The final fee amount came as some relief to Rose, who said it “seems fair for new projects to pay.”
But that doesn’t mean it comes at an easy time for the project.
“Prior to the impact fee issue, we had to terminate our lease with Town & Country Markets because we did not get our approvals until too late in the construction season,” Rose told The News Tribune in his emailed response Tuesday.
“Then, when we received bids, we found that construction inflation and approval requirements had driven costs more than 30 percent beyond the original estimates when our lease discussions with the market began some years ago.”
“Then the issue of the traffic impact fees raised its head and the specter that saving the Village would go from challenging to impossible. At the contemplated fees, the fees would mothball the project indefinitely.” he wrote.
Any redesign of the project must pass muster with the city, Rose noted. Additionally, he said, “The redesign and the rents need to be acceptable to the grocer and other tenants.”
In addition to a grocery, the project includes sites for a credit union and other buildings for dining, banking, retail, office, day care and medical, along with expansion of Shaw Park.
Rose said the redesign might entail less-expensive infrastructure, modified building finishes and/or phasing construction.
Town & Country’s website still lists its arrival in Gig Harbor for “some time in 2020.”
For his part, Rose is not giving up on Town & Country or on landing another grocer and added that “If everything came together timely we could begin in next year’s construction season.”
“They are our absolute first choice for a grocer, but it’s possible we may not be able to meet all their needs,” he said. “If that happens, we will be speaking with other high-end grocers until we find the right match for our Harbor Hill neighborhood.”
This story was originally published November 30, 2018 at 10:58 AM.
