Title
Consideration of a Recommendation to Issue Debt for Yelm Highway Community Park Phase I Construction and the Armory Arts Center Phase I Renovations
Recommended Action
Committee Recommendation:
Move to approve a recommendation to issue debt for Yelm Highway Community Park Phase I Construction and the Armory Arts Center Phase I Renovations.
City Manager Recommendation:
Move to approve a recommendation to issue debt for Yelm Highway Community Park Phase I Construction and the Armory Arts Center Phase I Renovations.
Report
Issue:
Whether to approve a recommendation to issue debt for Yelm Highway Community Park Phase I Construction and the Armory Arts Center Phase I Renovations.
Staff Contact:
Sylvana Niehuser, Interim Director of Parks, Arts and Recreation Department, 360.753.8068
Presenter(s):
Sylvana Niehuser, Interim Director of Parks, Arts and Recreation
Background and Analysis:
Armory Arts Center
The City of Olympia is transforming the historic Armory building into a new community arts center. The vision for the Armory is to support the arts as integral to Olympia’s way of life; encourage community growth through creativity and innovation; foster connection among people, ideas and places, while operating with a foundation in equity.
This project addresses a long-standing community need first identified in 1989, and it aligns with eight (8) community planning documents, including Policy PR 8.1 of the Comprehensive Plan. The project was also included in the 2004 Voted Utility Tax ballot measure.
The Olympia Armory Building is located at 515 Eastside St SE and was transferred to the City of Olympia in March 2022 from the State of Washington as directed by the Washington State Legislature.
In January of 2024, eight non-profit arts organizations were identified as future tenants (Anchor Partners for the building), including The Bridge Music Project, Capital City Pride, Community Print, Kokua Services/Hummingbird Studio, Olympia Film Collective, Olympia Lamplighters, PARC Foundation and TC Media. These organizations will create a core partner group to activate the campus and bring the community vision to life. These partners will enter lease agreements with the City and contribute to the programming and activation of the campus in preparation for a grand opening in 2026-2027.
The building is currently closed for life/safety and accessibility improvements. The City is working with Ameresco and the partners to inform the construction process.
To date the City has invested $1,223,500 into the project. To maintain the facility, we spend approximately $400,000 a year. The City has secured $2,575,000 in grants and partnership contributions for the Armory project. Should the project be delayed or not move forward, the City would be required to turn back the following:
• $1,500,000 WA State Commerce Solar Grant
• $1,000,000 WA State Heritage Capital Grant
• $75,000 National Endowment for the Arts Grant
Yelm Highway Community Park
This project is the culmination of two decades of planning and community investment, including the property acquisition, master plan development, land use permit approval and habitat conservation plan mitigation. Located at 3323 Yelm Highway in Olympia’s Urban Growth Area, the park will serve as a vital regional recreation site.
Timeline of Key Milestones
• 2004: Voters approve the Voted Utility Tax; Yelm Hwy Community Park site included in fact sheet.
• 2004: Greene Parcel (3.24 acres) purchased to get a toehold for the larger acquisition.
• 2010: Need for a community park to accommodate soccer fields in the 2010 Parks, Arts and Recreation Plan.
• 2014: Property identified as the preferred site for a future community park in the 2014 Community Park Suitability Assessment.
• 2016: Community Park to include soccer fields is again included in the Parks, Arts and Recreation Plan.
• 2018: 83 acres purchased from the Zahn family for $10.7 million.
• 2019-2022: Master plan developed through extensive community input.
• 2021-2024: $3.85 million in grants secured from State and Federal grant programs.
• 2024: Thurston County Hearings Examiner approved the land use permit for and a Certificate of Inclusion in the Thurston County Habitat Conservation Program for gopher mitigation issued for the park site.
• 2024-2025: Work is underway to complete 100% design and construction documents, and prepare the project for bid in late 2025.
Phase I Improvements Include:
• Park maintenance office and shop
• Full-size lighted synthetic turf soccer field
• 13 pickleball courts (Including 1 ADA court)
• Two full-size basketball courts
• Mini-pitch soccer field with YALP interactive equipment
• Central restroom and support building
• Picnic shelters, playground, paved loop trails, dog park
• Parking lots (paved and gravel)
• Integrated art (1% for the Arts Program)
Project Timeline:
• Design Completion: Fall 2025
• Construction Start: Early 2026
• Duration: Approximately 12 months
To date:
• City Investment: $14,066,000
• Grants/Partnership Contributions: $3,867,000 grants/$17,000 partnership
o $2,000,000 WA State RCO Land and Water Conservation Fund Grant
o $1,000,000 WA State RCO Acquisition Grant
o $500,000 WA State RCO Local Parks Development Grant
o $350,000 WA State RCO Youth Athletic Facilities Grant
o $70,000 RAVE Foundation Donation
o $12,000 Thurston County Pickleball Club
o $5,000 PARC Foundation of Thurston County
Financing Overview:
A financing package has been developed to support both projects, with a proposed debt issuance of $18-$20 million over 20 years. Estimated annual debt service payments range between $1.3-$1.5 million, to be paid using:
• Voted Utility Tax (VUT)
• Olympia Metropolitan Park District (OMPD) funds
OPARD will continue leveraging grants and impact/mitigation fees to support additional development. Existing bond obligations (e.g., 2019 20-year bonds for park land) will continue through 2039 at ~$1,008,000/year.
Long-Term Impact:
While this investment supports critical facilities, it will fully commit future revenues from the VUT and OMPD for many years, limiting the Department’s capacity to expand services until new funding sources become available. Following this investment, the balance in the VUT fund will be $2 million. The NVUT is estimated to bring in $500,000 a year and will likely continue to be allocated to the acquisition fund through 2029, when the revenue stream sunsets. The City will continue to collect impact fees and SEPA fees, which may be used as matching funds for future park development grants. Additionally, approximately $750,000 in annual OMPD revenue will continue to be allocated to the CAMP (Capital Asset Management Program) to address existing infrastructure needs, including ADA deficiencies.
Climate Analysis:
Armory Arts Center
Construction will follow energy conservation principles via a partnership with DES and Ameresco. Despite increased occupancy, greenhouse gas emissions are expected to decline long-term due to energy-efficient upgrades and the potential integration of solar power.
Yelm Highway Community Park:
• Maintenance buildings will use electric heat pumps and be solar-ready.
• EV parking stalls provided.
• Proximity to a bus stop and residential areas supports low-carbon transportation.
• Landscaping will be drought-tolerant.
• Synthetic turf field reduces water and fertilizer use.
• Natural features (forests and wetlands) will be preserved.
Equity Analysis:
The vision of the Armory is to support the arts as integral to Olympia’s way of life; encourage community growth through creativity and innovation; use the arts to connect people, ideas, and place, while operating from an equity framework. The Armory project prioritizes community equity by supporting organizations that serve marginalized communities, including BIPOC, LGBTQIA+, immigrants, individuals with disabilities, and youth. It is accessible via multiple transportation modes, including transit, walking or rolling.
Parks play an important role in the community as places that are free and accessible to the public for social connection and gathering, physical and mental health, and preservation and connection with nature. Team sports for both youth and adults support community building. Yelm Highway Community Park has been chosen as a location for a Sounders RAVE Foundation soccer mini-pitch. A mini-pitch allows for small groups of informal pick-up play and the Foundation commits to free ongoing youth programming at the mini-pitch. Thurston County Pickleball Association also offers free weekly pickleball lessons for community members.
Neighborhood/Community Interests (if known):
The Eastside Neighborhood Association (ENA) has a strong interest in the Armory and was an active advocate for the City acquisition of the building and it’s listing on the local Heritage Register. The City of Olympia has designated a Creative District that covers much of Downtown and extends within two blocks of the Armory campus. The district includes some 150 enterprises and is intended to retain, promote, and encourage Olympia’s quirky, vibrant and artistic community. The Armory is considered an asset to the nearby neighborhoods and there is interest in integrating the Armory Creative Campus into the City’s Creative District over time.
The community identified the acquisition and development of a large community park site for soccer fields as a high priority in the 2002, 2010, 2016 and 2022 Parks, Arts and Recreation Plans. In the City’s 2014 Community Park Site Suitability Assessment, the Yelm Highway parcel ranked as the preferred site for a new community park.
Over a thousand community members participated in the Yelm Highway Community Park Master Plan process that occurred from 2019-2022. Soccer players, pickleball players and neighbors from The Hamptons and Indian Summer neighborhoods have also shown particular interest in the site.
The YES Olympia Parks Coalition was heavily involved in the formation of the Olympia Metropolitan Park District and members continue to take a strong interest in the parks system.
Financial Impact:
• Estimated Debt Issuance: $18-$20 million
• Annual Debt Payment Estimate*: $1.3-$1.5 million (paid from VUT and OMPD)
• Duration: 20 years
*The payment is only an estimate at this time and will be finalized at the time of the bond sale.
The financial impact of adding more debt is that the OMPD and VUT will be fully committed for many years unless new revenue is collected. The Department has seen tremendous growth over the 8 years; however, it is simply not sustainable to continue growth at this pace. The addition of new park programs and amenities will need to slow down as we focus on opening and maintaining the Yelm Highway Community Park and the Armory Arts Center.
Staff will continue to pursue grants, and use impact fees and SEPA mitigation fees as the grant match, which will allow for smaller development to occur. Staff will also continue to seek park land acquisition opportunities with monies in the park land acquisition account and the addition of the ½% Non-Voted Utility Tax until it sunsets in 2029.
Operating Budget Impacts
In order to operate these new facilities, Parks' operating budget will also need to increase.
2026
$123,000 - One-time expenses
$26,000 - Operational expenses to begin staffing the Armory
$149,000 - Total
2027
$420,743 - Increase to Operating Budget for Operations and Maintenance
($273,340) - Increase to Program revenues (rentals, leases and event fees)
$147,403 - Net increase
2028
$419,961 - Increase to Operating Budget (Yelm Highway fully operational)
($123,870) - Increase to Program revenues (rentals, leases and event fees)
$296,091 - Net increase
OPARD will shift VUT and OMPD funds to the Operating Budget to cover the additional expenses. The impact of this shift will result in decreased funding for CAMP (Capital Asset Management Program) and ADA programs from $950,000 to $750,000 annually.
OPARD has made incredible progress over the last 10 years, and the decrease in funds will slow our progress, but will not impact our ability to provide safe and well-maintained capital park assets. The Facility Condition Index Rating is 85% for 2024, which means that overall, our park facilities are in “Good” condition and within our target range. The ADA Facility Upgrades project list is 51% complete and we will continue to address ADA upgrades in coordination with CAMP project or by Parks Maintenance staff. The Department’s priority will be to restore these funds to the Capital Budget when new revenues are identified.
Options:
1. Move to approve a recommendation to issue debt for Yelm Highway Community Park Phase I Construction and the Armory Arts Center Phase I Renovations.
2. Do not approve a recommendation to issue debt for Yelm Highway Community Park Phase I Construction and the Armory Arts Center Phase I Renovations.
3. Recommend an alternative course of action.
Attachments:
Presentation
PRAC Recommendation Letter
Armory Project Summary
Yelm Highway Community Park Project Summary