Developer to pay $1 for city property in downtown Puyallup. Here’s what it would become
A major development project in downtown Puyallup is on the City Council’s agenda Tuesday night.
The mixed-used project proposed by Pailindrome Communities includes a five-story apartment building with 115 rental units, seven townhomes for sale, a brewery, a public plaza and a market hall with food pods.
The council will hold a public hearing on the project at its meeting at 6:30 p.m. at City Hall, then will decide whether to vote on the purchase-and-sale agreement and the development agreement with Palindrome.
Palindrome would purchase the property at 115 Second St. SE for $1 under the proposal and would have to finish all phases of the project in five years.
The city purchased the 1.5 acres in 2002 for $1.4 million, according to Pierce County Assessor-Treasurer records. The property used to be home to car dealerships, and today is largely public parking.
“We are selling the property for $1 because of the long-term public benefits that will come from this project,” city spokesperson Eric Johnson said in an email Friday.
The Puyallup City Council heard as part of a presentation last month that those who live in the new apartments and townhomes would spend an estimated $1.3 million a year at Puyallup businesses, The News Tribune reported. As the city continues to grow, Puyallup has said it needs more than 7,400 new homes over the next 20 years to meet its state target.
A $1 sale isn’t as unusual as it might seem. It’s a way some cities choose to incentivize development.
Wilsonville, Oregon sold 1.3 acres to Palindrome for $1 to build a housing development with 121 units, and the developer broke ground in August, The News Tribune reported. Wilsonville also subsidized $1.4 million in development fees for that project.
Tacoma sold Union Station to the federal government for $1 in 2022 as part of a longstanding lease agreement.
‘Part of the community vision for a very long time’
The city bought the land downtown as a “catalyst development site” with plans to get more housing downtown, Meredith Neal, the city’s development and permitting services director, told The News Tribune last month.
“This is something that has been part of the community vision for a very long time,” she said.
Neal said Palindrome expects to invest $40 million in construction costs.
“Under the terms of the proposed development agreement and the purchase and sale agreement, the city would convey the property to Palindrome in exchange for Palindrome developing the property according to the three-phased approach and thereby providing numerous public benefits,” according to the City Council agenda materials for the Tuesday meeting.
The first phase would be the market hall, which would include micro restaurants. The developer wants the hall to open about the same time that the adjacent Meeker Festival Street the city is planning opens in a couple years. That’s part of what attracted Palindrome to the area, Neal told The News Tribune last month.
The second phase would be the apartment building, which would have retail space on the bottom floor. The third phase would be the townhomes.
Palindrome plans to apply for one of the city’s multi-family tax exemptions, The News Tribune previously reported. The project would be exempt from property taxes for 12 years if about 25 percent of the units are affordable and the council approves the exemption.
The details are still being worked out, city spokesperson Eric Johnson said Friday. The council would consider the exemption at a future meeting, not Tuesday night.
In addition to some of the apartments, Palindrome plans to make two of the seven townhomes affordable, according to the agenda materials.
Affordable units are for those who make 80 percent of the area median income, which means a single person could qualify if they make less than $64,900 a year, The News Tribune reported. A family of two could qualify if they make less than about $74,150.
They wouldn’t set rents this early for the apartments, but the developer told the council during the presentation last month that a market-rate rent for a new one-bedroom unit in the area is about $1,900 and that a one-bedroom affordable housing unit rents for about $1,600.
Staff writer Debbie Cockrell and News Tribune archives contributed to this report.
