Title
Approval of a Resolution Amending and Restating an Interlocal Agreement Between the City of Olympia, City of Lacey, City of Tumwater, and Thurston County for Pooling and Transfer of Funds to Support a Permanent Supportive Housing Project at Franz Anderson Road SE
Recommended Action
Committee Recommendation:
Not referred to a committee.
City Manager Recommendation:
Move to approve a resolution amending and restating an interlocal agreement between the City of Olympia, City of Lacey, City of Tumwater, and Thurston County for pooling and transfer of funds to support a permanent supportive housing project at 527 Franz Anderson Road SE.
Report
Issue:
Whether to approve a resolution amending and restating an interlocal agreement between the City of Olympia, City of Lacey, City of Tumwater, and Thurston County for pooling and transfer of funds to support a permanent supportive housing project at 527 Franz Anderson Road SE.
Staff Contact:
Jacinda Steltjes, Housing Manager, Community Development, 360.753.8482
Presenter(s):
None - Consent Calendar Item.
Background and Analysis:
In 2022, the City of Olympia and Thurston County partnered to purchase tax assessor’s parcel numbers 58900000300, 58900000301, 58900000400, 58900000500 and 58900000600 along Franz Anderson Road SE for the purpose of affordable housing. In February 2023, the City of Olympia released a Solicitation of Interest inviting proposals from development teams interested in developing Permanent Supportive Housing at the site. A regional team with representation from City of Olympia, City of Lacey, Thurston County, and City of Tumwater selected Low Income Housing Institute (LIHI) to develop the project. The City of Olympia and LIHI then entered into a Real Estate Purchase and Sale Agreement for the purchase and development of the property in June 2023.
In November 2023, the cities of Olympia, Lacey, Tumwater, and Thurston County executed an interlocal agreement outlining conditions under which the City of Lacey, City of Tumwater, and Thurston County will pool funding from each jurisdiction and transfer funds to City of Olympia to support the development of the project and under which the City of Olympia will monitor the construction of the project and manage the disbursement of the pooled funds to LIHI as the project is developed. Thurston County is contributing $3,500,000. Lacey is contributing $3,000,000. Tumwater is contributing $275,000. Olympia has contributed $825,547 to date and continues to take the lead in monitoring the project and communicating with LIHI on behalf of the regional jurisdictions.
First Amendment to the Interlocal Agreement
The first amendment to the Interlocal Agreement occurred December 2024. The amendment replaced Coronavirus State and Local Fiscal Recovery Funds (SLFRF) originally identified for contribution from City of Tumwater and Thurston County with General Fund money from the City of Tumwater and local funds from Thurston County.
Second Amendment to the Interlocal Agreement
The project has been delayed and a second amendment to the Interlocal Agreement is now needed to confirm the parties’ commitment to the project and to outline expectations of all parties. In summary, the second amendment amending and restating the Interlocal Agreement Between the City of Olympia, City of Lacey, City of Tumwater and Thurston County for Pooling and Transfer of Funds to Support Permanent Supportive Housing Project at Franz Anderson Road amends the following:
1. Anticipated Completion Date
• Revises the anticipated date by which the project will be completed.
2. Key Development Milestones
• Revises and clarifies the key development milestones the project must meet to avoid any potential withdrawal of funds by any party to the agreement.
3. Project is Only Possible Through Collaboration
• Adds language stating that the parties agree and confirm that the project is only possible through the collaboration and contribution of each party.
4. Conversion of Maple Court
• Revises language stating that the parties agree and confirm that the conversion of Maple Court enhanced shelter to Permanent Supportive Housing is a regional priority project and the parties will work collectively to support funding requests for the conversion of this site.
5. Timing of Transfer of Funds
• Revises the timing for when the City of Lacey, City of Tumwater, and Thurston County will transfer their funds intended for the development of the project to City of Olympia.
6. Priority for Placement into the Project
• Revises priorities for placing tenants into the project.
7. Revised Unit Mix
• Revises language referencing the unit mix of the project and states that Olympia will ensure that the residential units to be constructed upon the property shall be for households with Area Median Income (AMI) of fifty percent (50%) or less.
8. Quarterly Reports
• Adds language stating that City of Olympia will ensure that LIHI produces quarterly activity reports and clarifies that City of Olympia will share those with other parties to the agreement.
9. Performance Expectations
• Adds language stating that City of Olympia will ensure LIHI meets performance expectations following the development of the project.
10. Service Provider
• Revises language concerning the service provider for the project and clarifies City of Olympia’s role is to ensure a behavioral health organization provides optional supportive services at the project.
11. Exhibit A: Revised and Amended Real Estate Purchase and Sale Agreement
• Exhibit A is replaced with the most current version of the Real Estate Purchase and Sale Agreement between City of Olympia and LIHI
More detailed information on each of the amendments can be found in the attachment titled Explanation of Amendments.
Climate Analysis:
An amendment to the Interlocal Agreement will allow the project to proceed into development. The project will be built near a high-frequency transit corridor with bus service every 15 minutes along Martin Way SE. The development will comply with the Evergreen Sustainable Development Standards. ESDS contains criteria that safeguard health and safety, increase durability, promote sustainable living, preserve the environment, and increase energy and water efficiency.
Equity Analysis:
The amendment to the Interlocal Agreement solidifies the parties’ funding commitments and expectations of the project and permits the project to continue moving forward toward development so that it may serve vulnerable households in Olympia and Thurston County. The project will provide up to 35 housing units for single adults and couples whose incomes do not exceed 50% of area median income ($43,000 annually for a household of one and $49,150 annually for a household of two). Remaining units, including 18 supported by Housing Choice vouchers, will be available to tenants who were formerly homeless or whose income does not exceed 30% of area median income ($25,800 annually for a household of one and $29,500 annually for a household of two). The project addresses existing gaps in affordable housing availability and provides housing for marginalized populations who are over-represented in the county-wide homeless system.
According to a Housing Needs Assessment produced in January 2021 by Thurston Regional Housing Council, there are two critical housing gaps that hinder Thurston County’s ability to address both short-term and long-term homelessness. Those gaps are a lack of permanent supportive housing and of housing units which are affordable to households whose income is at or below 30% of area median income by household size. The Franz Anderson Permanent Supportive Housing project provides both supportive housing and housing for extremely low-income households with incomes below 30% area median income.
Washington State’s Growth Management Act calls for jurisdictions to plan to accommodate future population growth at various income levels. According to data produced by Thurston Regional Planning Council, a total of 3,594 new Permanent Supportive Housing units will be needed in Thurston County by 2045. Olympia 2045: Comprehensive Plan calls for just under 1,100 new Permanent Supportive Housing units to meet the projected need over the next 20 years.
Neighborhood/Community Interests (if known):
Affordable housing and homelessness are a community concern and continue to be a top priority among Olympians participating in the City’s community engagement and satisfaction survey.
Financial Impact:
There is currently no direct financial impact associated with approval a resolution amending and restating an interlocal agreement between the City of Olympia, City of Lacey, City of Tumwater, and Thurston County for pooling and transfer of funds to support a Permanent Supportive Housing project at Franz Anderson Road SE.
Options:
1. Move to approve a resolution amending and restating an interlocal agreement between the City of Olympia, City of Lacey, City of Tumwater, and Thurston County for pooling and transfer of funds to support a permanent supportive housing project at 527 Franz Anderson Road SE.
2. Do not approve an amended resolution and provide staff with direction on next steps.
3. Take other action.
Attachments:
Resolution
Second Amendment Amending and Restating the Interlocal Agreement
Explanation of Amendments
First Amendment to the Interlocal Agreement
Interlocal Agreement