OLYMPIA — Downtown developer Ken Brogan, known for turning an office building between Capitol Lake and Budd Inlet into the Views on Fifth mixed-use housing, has a new project ready to go.
He has the building, he has a plan and he has a problem, Brogan told The Olympian. He has a state office tenant whose workers are largely working from home telling him it might take as long as two years for them to find a new space.
And he is not happy about that, he told The Olympian. And he shared a series of email exchanges between him and the state Department of Enterprise Services about the space. DES manages state property and the state’s leases.
A DES official initially told him it could take between six months and two years to relocate.
“We are trying to avoid the relocation turning into a public works project, which is a reason it could take closer to two years,” the official said.
Brogan responded, saying the delay makes no sense because he believes there is ample office space available due to the number of state workers who are working remotely.
“Again, I will mention that the staff does not use the space within my building full-time as they still work from home and only visit the space on occasion,” Brogan wrote. “Why would the state of Washington wish to pay a lease payment on a privately owned building vs. use a building that was paid for by the taxpayers that is not fully being used?”
Is there ample space available? That appears to be true, according to recent data released by the state Office of Financial Management.
Of roughly 26,000 state workers who have what OFM called a “duty station” in Thurston County, about 18,000 of them — nearly 70% — telework at least one day per week, new data show.
The state, according to OFM, also set a goal of reducing leased office space by at least 20% for leases expiring in fiscal years 2024 and 2025.
“Within this subset of leases, we have reduced office space by 413,000 square feet (about the size of the OB2 building on the Capitol Campus), exceeding the target of 380,000 square feet,” said OFM spokesman Hayden Mackley in an email.
The state’s next goal is to reduce leased office space by at least 30% for leases expiring in fiscal years 2026 and 2027, according to OFM.
The plan
In December, Brogan bought the Republic Building at 505 Union Ave. SE in Olympia. It’s a 60,000-square-foot office building that he wants to turn into 65 units of affordable housing.
Developer representatives met with city officials in February about the proposal and now Brogan is prepared to make it official by submitting his land-use application to the city in the coming weeks.
Brogan wants to take advantage of a 12-year multifamily tax exemption program to help make 100% of the units affordable.
The proposed project is eligible for that exemption, said Jacinda Steltjes, the city’s affordable housing program manager, as well as an 80% reduction in school, park and transportation impact fees.
With that savings, Brogan thinks he can shave down monthly rents by $300-$400, making it affordable and attractive for single mothers, young couples and senior citizens, he said. The project will have secure parking and a secure dog-walking area, Brogan said.
“There is a deep need for affordable housing,” said Steltjes in an email.
She cited a Housing Needs Assessment published by the Thurston Regional Housing Council in 2021 that found that more than 34,650 Thurston County households were cost burdened, meaning they were spending more than 30% of their income on housing expenses. Of these, 13,900 were severely cost burdened, spending more than half of their income on housing expense.
The tenant
The state tenants in the Republic Building are the Transportation Improvement and Freight Mobility Strategic Investment boards, which have been co-located in one space, said Jennifer Reynolds, a spokeswoman for DES.
“Some employees from each board work remotely while some work in the office regularly,” Reynolds said in an email.
Brogan said they occupy about 8,000 square feet in his building and pay roughly $7,500 per month.
Although a previous DES official said it could take up to two years to move, Reynolds suggested otherwise.
“DES has identified office space in a state-owned building that can accommodate these tenants,” she wrote. “The design is nearly complete and DES will soon coordinate vendors to do the renovation work, including constructing office and conference room space, moving files and equipment, HVAC work, painting, etc. Once the vendor coordination is complete, work will begin.”
And she offered this: “DES predicts that the tenants will be completely relocated soon.”
Brogan is ready to move forward.
“I’m not backing down,” he said.
