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Panattoni will begin developing warehouses without overall planning input from Tumwater

Some actual consequences of a Port of Olympia decision to lease 200 acres of Port land to Panattoni, an industrial development company, are becoming apparent. Panattoni signed a lease with the Port in 2020 for land in the New Market Industrial Campus next to the Olympia Airport and within Tumwater’s city limits.

In November 2021 and March 2022 the City of Tumwater held permit review meetings with Panattoni for two warehouse developments within the lease area.  While not as huge as the 1.1 million square foot Costco distribution center on Little Rock Road, for Tumwater the Panattoni warehouse projects will be large.

Only a 12-foot wide screen of trees will remain between the Center Street Commerce site and the Bush school playing field.

The South Sound Commerce Center at 7901 Center Street SW will be a 449,000 sq.ft. warehouse on a 30-acre parcel south of Tumwater Blvd.  At 8277 Center Street SW, Center Street Commerce will be two warehouses, 200,000 sq.ft. feet and 114,190 sq.ft., just north of 83rd Avenue on part of a parcel of about 27 acres.

These warehouse projects are within the part of the New Market Industrial Campus where development specifics were to have been spelled out in an Interlocal Agreement (ILA) between the City of Tumwater and the Port of Olympia.

No ILA was ever signed. A major point of contention was whether the ILA would allow development to be “vested” for 20 years based on a sketch of proposed buildings and street access.  “Vesting” would mean that the area would be developed and managed under current regulations no matter how state law might change during the 20 years. Without vesting, Panattoni will have to comply with changes in regulation as they apply to the company’s development activities.

In late November 2021, Tumwater sent the Port an ILA version with the vesting removed; the Port responded that it was no longer interested in any Agreement.

Developing the Panattoni lease area with no overall plan in place

What does it mean for Tumwater that these two Panattoni warehouse developments are going forward without an Interlocal Agreement?

Community members participated in public meetings and provided comments about the ILA to both the Port and Tumwater. With the elimination of the ILA, Tumwater lost the opportunity for area-wide planning within the Panattoni lease area for traffic and stormwater treatment. Residents also lost the opportunity to preserve woodlands and to construct a trail and a community center.

Stormwater treatment. Currently a large part of the Panattoni lease area is undeveloped land that absorbs rainwater. New industrial development will add thousands of feet of impermeable surfaces in the form of buildings and pavement. Stormwater from those impermeable surfaces must be collected, filtered to eliminate toxins, and disposed of.

Excellent stormwater treatment is especially important in the lease area because it includes the Port and Bush wells, major sources of Tumwater’s drinking water. In addition, because the lease land is a high groundwater area, inadequate stormwater treatment during major rain events could exacerbate flooding in neighborhoods to the south. These neighborhoods experience flood events every few years.

There will now be no overall plan for the lease area—development will proceed one project at a time and in accord with Tumwater regulations. For example, for the first two warehouse projects, Tumwater regulations allow up to 85% of industrial lots to be impermeable surface. Each project will handle stormwater by injecting it beneath the warehouse buildings.

Woodland preservation. One part of the proposed ILA responded to concerns about development reducing the area of woodland. Tumwater’s regulations for industrial parcels require preservation of only 20% of existing trees. The Port’s tentative sketch for the ILA showed preservation of trees in woodlands north and east of George Bush Middle School.

Now, however, according to Panattoni plans reviewed on March 10 for the Center Street Commerce project, a good portion of the trees next to Bush Middle School will be cut—no intact woodland will remain in that part of the lease area. Only a 12-foot wide screen of trees will remain between the Center Street Commerce site and the Bush school playing field.

A 40-foot-wide private driveway for trucks running between the warehouse and Kimmie Street SW will cut through the woodland north of the school. The biggest remaining stand of trees is to the south between the warehouse and 83rd Avenue and it will only be about 25-feet by 850 feet.

Recreational trail and community center.  In response to residents’ calls for community amenities, final versions of the ILA included a recreational multi-use trail from Bush Middle School north along I-5 and a possible lease to the City of Tumwater to build a community center on a ten-acre parcel on the east side of Center Street.

The proposed trail and community center are not in the part of the lease area where the first two Panattoni warehouses will be built. Conceivably Tumwater could still discuss these amenities with Panattoni and the Port.

However, without the ILA it seems unlikely Panattoni would give up any part of its lease area for the trail or the community center. Public support for both projects is also uncertain. During public comment, residents questioned both the placement of the trail, next to an interstate highway where outdoor recreation can be unhealthy, and the location of the community center in an industrial area near no other community services.

Looking back and ahead

Pete Kmet, mayor of Tumwater when the Port made its decision to no longer have an ILA, wanted time to investigate environmental issues and other higher value options for the Port property. The Port dismissed those concerns and others raised in more than 38 pages of public testimony by saying that the developer would comply with regulations.

Now Panattoni will move ahead, with no Interlocal Agreement, in the direction dictated by its commercial objectives. Whether those will be conditioned by regulations as they may evolve to take account of environmental and community needs remains to be seen.

Charlotte Persons reports regularly on development issues for Works in Progress.

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