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The Morris Amendment: urban growth machine

Olympia’s planning department keeps a constant eye on bringing in tax revenue

Do you look around Olympia’s Westside and wonder why, after 20+ years of “comprehensive planning” it’s still all about cars?  How is it that developers have been able to crowd the freeway exits with “destination retail”; line the arterials with fast-food chains and drive-in banks; add fortress-like drugstore complexes next to strip malls; clear the remaining stands of trees for more national brand stores—and surround them all with a sea of parking lots?

Part of the answer comes because of a recent brouhaha arising from private meetings between a developer and members of the Olympia Planning Commission.  The meetings coincided with Commission deliberation on a change to one of Olympia’s zoning districts.  It was a change billed by staff as a simple “text amendment”—by implication, nothing special.

In fact, it was quite special.  It was the camel’s nose under the tent—a camel abetted by city officials who believe in the virtues of the urban growth machine.  A camel that would join the herd that roams the city buying undeveloped land and turning it into “investment property.”  What follows is the story of the role that the camel’s nose plays in the urban growth machine…

PROLOGUE

On October 7 2013, a man named Jim Morris sent an email to Leonard Bauer at the City of Olympia.  Leonard Bauer is the Deputy Director of Olympia’s Community Planning and Development Department (CP&D).  Morris is the owner of MPHHoldings and a major developer of office properties around Olympia.  Morris wanted to talk about his interest in developing a large retail building on land he owns off Harrison at Kaiser Rd. The parcel is in an area zoned Professional Office/Residential Multifamily, or PO/RM. It also allows many commercial uses, and caps the size of retail structures, such as grocery stores, at 10,000 sq. ft.

In 2007 Morris entered into a contract with the City of Olympia to construct professional offices (“West Capital Office Park”) on that land.  The contract “vested” Morris’s project, guaranteeing that no new regulations would apply while the contract was in effect.  But the boom of 2007 turned into the bust of 2008.  Today there are vacancies in several of Morris’s office complexes in West Olympia.  Offices don’t look profitable in this market. 

Which brings us back to Mr. Morris’s email to CP&D last October.  Would it be possible to fix the PO/RM zoning to allow a 50- or 100,000 sq ft retail store? 

ACT I.   CITY COUNCIL CHAMBERS, A MEETING OF THE OLYMPIA PLANNING COMMISSION

Seemingly out of the blue, a proposal to increase the maximum size for stores in certain parts of the PO/RM zone appeared on the March 3 agenda of the Olympia Planning Commission.  (The Commission is an official citizen group that advises the City Council on long-range planning.) CP&D Deputy Director Leonard Bauer briefed the Commissioners:  this was a simple “text amendment” that would allow stores up to 50,000 sq. ft. in the PO/RM zone in lieu of the current limit of 10,000 sq ft.  The staff memo supporting the change was brief:  the proposal originated with a study by EcoNorthwest, a consultant to the city.  The market for offices is depressed.  There’s a lot of new housing out west past Kaiser Road and not much retail.  Without the change, this largely undeveloped area will end up as exclusively multi-family apartments.  With the change, several large parcels could provide a desirable mix of residential and retail services. 

The memo didn’t explain why increasing the maximum size for a retail store by a factor of five was necessary for a mix of residential and retail stores to be built.  Briefing memos from the staff are often bare of supporting information, rarely identify pro’s and con’s and don’t offer meaningful alternatives to what the staff recommends.  This one was no exception.  The “options” section of the memo said only this:  Hold public hearings on this proposal. 

Scene 1.  The Commissioners ask “Why now?”

One of the Commissioners, Carol Richmond, wondered why the Commission was being asked to amend the language of the PO/RM zone right now—with no context and no pressing need?

Mr. Bauer added some detail to the information in his memo:  EcoNorthwest had identified a 10% office vacancy rate in Olympia, so “it is unlikely that developers would develop offices [in this area].” And “there is very little chance for commercial services, given the restrictions of the zone.” 

Okay, then, Richmond said; if there’s a problem with the zoning—why don’t we open up the options since this is a fairly new area yet to be developed?  At that point—halfway through the briefing—Bauer revealed that the CP&D had put just such a “focus area planning process” for the Kaiser/Harrison site on their schedule but… not til 2016.   The reason CP&D brought up this “text amendment”—before the planning process—was because the market for office is so weak that if we don’t make the changes now, the area is likely to develop as only residential multifamily.  

[Noises, off:  Consider Deputy Bauer’s repeated references to the 10% vacancy rate in offices as the reason we need this change.  This tells us that if the market for offices were strong, no such text amendment would be before the Commission.  That is, if Jim Morris were prepared to build his office park, the Commission wouldn’t be deliberating about 50,000 sq ft retail stores.] 

Scene 2.  Why this “text amendment?”

Three of the Commissioners voiced concern—wouldn’t increasing the size of stores just lead to more segregated retail requiring more driving?  Why not consider some alternatives, like a neighborhood center approach, or an urban village integrating retail and different types of housing…  Maybe move up the date for the focus area planning process?  Amend the text amendment? 

Deputy Director Bauer’s response to these questions was misleading and at times downright wrong.  He said the new text would “allow a little bit larger building than currently allowed.” He told the Commissioners that the current PO/RM language makes “only some very minimal allowances for commercial retail uses” —yet the kinds of commercial uses allowed are quite varied and would not change under the “text amendment.”  When Carol Richmond asked Mr. Bauer whether housing types other than multifamily could contribute to a more mixed area, he said no other types of housing were permitted:  “the zoning currently is just multifamily.”  The Deputy Director of Planning apparently did not know that the PO/RM zone allows about every kind of housing you can think of—single family homes, townhouses, co-housing, duplexes, apartments, retirement homes—but he readily provided the Commissioners with the wrong answer.

Toward the end of the discussion, Mr. Bauer pointed out that he had made “a few wording changes” to the statement defining the intent of a zone.  The original intent of the PO/RM zone was described as creating “a compatible mix of office, residential and small-scale commercial uses” that will “generate low traffic.”  To reflect the 5-fold increase in the maximum store size, “small-scale” commercial uses became “small and medium scale” uses, characteristic not of “low vehicle traffic,” but of “low and moderate” vehicle traffic.  The camel’s nose inched a bit further into the tent.

Only three of the nine Commissioners asked questions during the briefing.  One Commissioner had recused herself due to a professional relationship with a property-holder affected by the amendment.  (It was Jim Morris.).  His name was not mentioned. 

ACT II.   THE OLYMPIA PLANNING DEPARTMENT

Jim Morris brought his request for an increase in the size of buildings allowed on his property to the CP&D in the first week of October 2013.  From that date through January 2014, he was consulted at each stage of the city staff’s drafting of the PO/RM “text amendment.”

Scene 1.  Deputy Director Bauer’s computer screen

From: Keith Stahley  To: Leonard Bauer; Steve Friddle

Sent: Monday, October 14, 2013 2:58 PM

Subject: PORM Revisions

Here are the two sections that I am aware that would need to be amended for Mr. Morris to pursue a 10,000 to 50,000 square foot food store on his West Cap site. Anything else?

 

Given the size of the parcel in question it may be advisable to consider making it proportional such as 2,500 square feet per acre or something like that.

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From: Keith Stahley  To: Leonard Bauer; Steve Friddle

Sent: Tuesday, November 26, 2013 2:49 PM

Subject: West Cap

What’s the status of this one? ...Jim [Morris]phoned and was looking for an answer or at least a next step. Should I schedule another meeting with him for next week?

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From: Leonard Bauer lbauer@ci.olympia.wa.us 

To: jim@mphholdings.com; Shelby Hentges

Subject: Friday meeting on West Cap

Date: 12/4/2013 5:29:33 PM

Attachment N1: image001.png

Attachment N2: PORM zoning text proposal - draft.docx

We’ve drafted some language as a possible PO/RM zone text amendment that we can all discuss on Friday. See you then. Leonard Bauer/

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On January 2, 2014 Bauer sent Morris a copy the final version of the text amendment.  There is no indication that Bauer and Stahley consulted anyone else during the drafting process. 

The answer to the questions “Why now?” and “Why this text amendment?” is therefore to support a change in development strategy that Jim Morris—and likely others who own land on that part of the Westside wishes to make.  The citizen committee advising on the “redevelopment opportunities” study made the following observations at a meeting with the City on June 20, 2013: :  “Develop west side property to generate revenue to improve downtown,” and “West side development is the economic engine that supports the city’s revenues…”   Developers operate in a market where greater profitability comes from greater volumes and greater volumes are tied to more auto traffic.  CP&D staff operates in a context where growth is the principal—if not the only—measure.  Revenue from development and impact fees; from property tax, from retail sales is an unalloyed good.   Facilitating development becomes the primary job of the city and its staff.

Scene 2.  The City Council’s annual retreat January 2014

From: Leonard Bauer lbauer@ci.olympia.wa.us  To: jim@mphholdings.com; Shelby Hentges

Subject: FW: PORM Revisions – updated

Date: 1/2/2014 1:37:06 PM

Per our discussion at our last meeting, here’s an updated draft of potential changes to PO/RM zoning text. Please let me know if you have any additional comments.

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As I mentioned to Jim today on the phone, our proposed CPD work program will be reviewed by city council at their retreat Jan. 10-11. It includes this proposed text amendment in the first quarter of 2014, so if council approves the work program, we’ll be ready to start the process of the text amendment as soon as we can get it on the planning commission’s agenda. (Emphasis added.)

“If council approves the work program…”   Mr. Bauer stressed at various points that the staff was bringing this “text amendment” forward at the request of the City Council.  Yet it is the staff that 1) made the “text amendment” a priority in the 2014 CP&D workplan; 2) presented the plan to Council members; 3) got their sign-off and 4) now disclaims authorship because “the Council made us do it…”  This is how city policy evolves from staff priorities that channel the demands of the growth machine—even when laundered through the Council. 

ACT III.   BACK AT THE OLYMPIA PLANNING COMMISSION APRIL 7

After the March 3 OPC meeting, Commissioner Judy Bardin triggered a public outpouring of indignation when she questioned the propriety of meeting privately with Mr. Morris.  Suddenly the obscure “text amendment” became an object of interest to various people—let’s call them “citizen/staff”—who decided to present the results of their inquiries into the how and the why of the amendment at the April 7 meeting where the Commissioners were slated to decide about the amendment. 

Deputy Director Bauer brought a new Staff Report that said nothing new about the need to increase the size of retail buildings in the PO/RM zone at Kaiser.  It said again that it was necessary to allow big retail stores in order to “reduce barriers to mixed-use development.” It reiterated that the amendment came directly from the EcoNorthwest study and asserted that “no property owner requested the PO/RM changes.”  This time he offered five options, beginning with ‘recommend the change’ and ending with ‘don’t recommend the change.’   (This is the first time this study is mentioned.  Will readers know what it is?)

Scene 1.  Behind the podium in the council room

The “citizen/staff” presentations, on the other hand, were full of new information.  Their testimony addressed all of the questions about the proposed change to the PO/RM zone that the CP&D staff left out of its briefing.  One by one the “citizen/staff” members dismantled the city staff’s assertions and assumptions.  [The author was one of the people who spoke.] 

Mr. Bauer said the amendment came from the EcoNorthwest study—but that study doesn’t call for increasing the size of buildings allowed in the PO/RM zone. It specifically identifies “an opportunity for small local-serving retail.”  (Just the sort of idea that Commissioner Richmond wanted to know about.) Otherwise, the short-term action recommended by the study is to “address zoning issues by implementing a master planning, community renewal or subarea planning” process.  The EcoNorthwest study doesn’t identify any barrier to mixed use development that would be solved by increasing the size of facilities for retail uses already permitted.

The city staff acknowledged the fact that their amendment would alter the intent of the PO/RM zone when they changed the purpose statement from “small scale commercial uses” to “small-to-medium scale…” But 25,000 – 50,000 sq.ft. stores aren’t medium scale according to Olympia regulations.  The Municipal Code defines them as Very Large Scale Retail facilities. Using the correct term could have prevented the adoption of the amendment…

Bauer kept saying that the PO/RM currently allows only minimal commercial uses.  In fact, it allows many kinds of commercial uses, including day care centers, banks, art galleries, business and government offices, b&b’s, commercial printing, and laundries—along with grocery, equipment and general merchandise stores, fitness centers, and specialty stores, as long as these don’t exceed 10,000 sq ft.   The “text amendment” doesn’t increase the amount of commercial uses possible, rather, it allows structures that are five times larger.

The reason Deputy Director Bauer brought up this change now was that, without it, the area would fill with multifamily residential housing.  The EcoNorthwest study found a 10% vacancy rate and falling rents in the office market:  the conclusion?  No offices will be built any time soon in this PO/RM zone.  The study also found that “rents may not be high enough to support new multi-family residential development.” Yet Mr. Bauer concluded that the prospect for more multifamily housing was excellent.  He termed the finding about residential rents “incongruous” and asserted that nothing but multifamily housing would be built if the amendment were not adopted. 

Bauer said that the new text would “allow a little bit larger buildings than currently allowed.”  It would actually allow buildings 5 times larger:  at 50,000 sq ft a building would be about the size of the Safeway at Harrison and Cooper Point. Bayview Market by comparison is 26,000 sq. ft. 

The claim that the area is in imminent danger of being developed with nothing but multifamily homes simply isn’t born out by the evidence.  Apartment buildings, apartments above mixed use developments, duplexes, single-family homes, boarding homes, co-housing, retirement homes, townhouses—all are permitted without restriction.

Some important issues were simply absent from the staff briefing—traffic volumes associated with new big box stores; congestion on certain streets and intersections on the Westside; the city’s pursuit of a new interchange from Highway 101 at Kaiser Road, with the potential to create more off-ramp development.  Two individuals described how large scale retail diminishes the ability of small-scale retail to find a footing and how very large retail with associated parking destroys rather than enhances the goal of “walkability.”  The Westside is full of empty stores along every arterial—there is no more demand for new retail development than there is for office or multifamily.  Inviting more large-scale retail construction onto undeveloped land west of the center is a recipe for more vacancies in the center. 

Scene 2.  Seven Commissioners in a row

Well before the end of the “citizen/staff” presentations, it was clear that the camel’s nose was going to be smacked.  The camel, this time, would have to withdraw from the tent.  The Commissioners voted to recommend that the City Council not consider the PO/RM “text amendment” to allow more big box stores on undeveloped land at the edge of Olympia.  They added that the staff could bring back another proposal at a later date…so the citizen/staff will have to remain vigilant.  It is harder to stop the urban growth machine than it is to shove a camel through the eye of a needle. The machine can be kept from going off the road but only if the city staff is accountable. Some interesting and constructive thoughts about how to keep it on the road are at http://www.strongtowns.org/.

ACT IV.  WEST OLYMPIA, SOMETIME IN THE FUTURE

Scene 1.  Standing on the corner of Harrison and Division waiting for the walk sign

“Since 2000, most retail development in Olympia has been large scale, auto-oriented, located near highway interchanges.”  That’s what the ECONorthwest study says, and that’s what anyone who spends time in West Olympia knows.  Despite dozens of provisions in the existing Comprehensive Plan – including ones that say new structures will be multi-story buildings oriented toward the street rather than parking lots with entrances facing the main pedestrian street, creating a continuous street edge—with windows—that helps create a pedestrian-friendly street enclosure—you only have to drive (or walk??) down Harrison to see that none of this happened.

All the new businesses permitted by Olympia’s Planning Department since 2000 are one-story, no-entrance-to-the-street, parking-lot oriented chain stores.  The newish Rite-Aid complex at Harrison and Cooper Point is designed around auto access, and the blank wall running along Harrison looks more like it is part of a prison complex than what it is—the back of an internal mall turned away from the street and the other retail businesses around the intersection.  Each corner is self-contained and relates in no way to the businesses on the other corners, a characteristic of the uncoordinated, scattered low-density development favored by investors.  People stopping by the Rite-Aid don’t walk to the Safeway, even though they are “across the street” from one another—they get in their car and drive 30 yards. 

One of the “citizen/staff” people who spoke at the hearing struck a chord:  If you’re going to plan for the kind of city with development you want, you have to stick to your Comprehensive Plan.  The reason for changing it can’t be simply that market conditions have changed.  Market conditions always change.  There’s no guarantee that a parcel of land will yield the hoped-for return the investor had when he acquired the property.  That’s his risk.  It seems like the city staff treats the Comp Plan as optional…not really binding.  If you let the developers tell you what you need and where you need it – they can just have at it!  Why do we even need a CP&D staff?

The actions that triggered this amendment and brought it to the Planning Commission shed light on why after 20+ years, we don’t have a city that reflects the Comprehensive Plan.  And they raise serious questions about the Olympia Community Planning and Development Department and its commitment to Olympia’s Comprehensive Plan and the Comprehensive Planning process.  We need to answer these questions before we can take on the much more complicated questions of how we make incremental decisions that contribute to long-term financial stability for Olympia  and a happier community.

Scene 2.  At Dino’s coffee shop on Harrison Avenue

The chair of the WestOly Secession Committee reports on new businesses that have opened on Harrison between Perry and Decatur, taking advantage of the increase in foot traffic.  Someone announces that since WSECU moved into the old South Sound bank building, you can actually enter from the street.  Another two-story building is being constructed between the Duncan Insurance Agency and the building where the Subway used to be—looks almost like a city street. 

Then there’s a collective slurp, the cappuccinos are finished, and the group disperses home through West Central Park. 

Bethany Weidner is the author of an unpublished report on the City’s approval of a 7-11 store at Harrison and Division called “The Persistence of Unplanned Growth.”  She has lived in WestOly since 1984 and is a principal at Global Inquiries.

All of the information and quotes in this essay come from emails provided in response to a public records request; from minutes and attachments of the Ad Hoc Committee on Community Renewal Areas, the Planning Commission (including recording of the March 3 and April 7 meetings) and the City Council (all available on the web), and from “Investment Strategy: City of Olympia Opportunity Areas,” ECONorthwest, 2013.