Lacey council directs staff to prepare surplus resolution to transfer Mullen Road parcel to Housing Authority for affordable housing

The City of Lacey will prepare a resolution to declare the city-owned Mullen Road parcel surplus and to negotiate a direct transfer to the Housing Authority of Thurston County for development of affordable housing, city staff and councilmembers said at the July 22 work session.

Vanessa Dolby, Community and Economic Development Director, told council the city became owner of the roughly 5.3-acre, wooded parcel on June 30, 2025 after purchasing it from LOTT Clean Water Alliance for a final sale price of $451,300 (closing and title-related costs increased the original $450,000 purchase price). Staff noted the property sits across the street from Camacho Middle School and that an appraisal value was $700,000 while the assessor's taxable value showed a higher figure; staff flagged the assessed value difference for follow-up with the assessor.

Dolby said staff are proposing to surplus the property under Lacey Municipal Code chapter 2.74 and enter direct negotiations with the Housing Authority of Thurston County, which staff characterized as a "similar entity" under the code (the housing authority is a public body corporate and political of the state of Washington). Draft terms discussed include a recorded restrictive covenant limiting use to affordable housing for households at 80% of area median income or less, a portion of units dedicated to senior housing tied to the housing authority's funding requirements, a neighborhood meeting and public outreach before a formal permit application, and a target timeline to complete the sale by Sept. 30 to align with funding deadlines the housing authority is pursuing.

Dolby said staff recommended a nominal sale price ($1) so that the city's funds remain available to the project; she told council the staff report had recommended $1 to cover transaction processing and make funds available for development. Housing Authority representatives in the audience, including Craig Chance and Tom Rossum (Director of Development Administration), said the authority is ready to restart design work previously connected to a Tumwater project and that they would aim to move toward construction in 2026 if funding and permitting proceed.

Councilmembers expressed unanimous support to direct staff to prepare a resolution declaring the property surplus and to return a resolution and related documents to council; one councilmember noted LOTT's cooperation in the prior sale to the city and thanked LOTT for facilitating the opportunity. Staff said the city had already completed a pocket-gopher study during due diligence and reported no pocket gophers were found on the property.

Ending: Staff will prepare a surplus-resolution package, draft restrictive covenant, and memorandum of understanding for council consideration to enable a transfer and affordable-housing development; council directed staff to proceed with a $1 sale price recommendation.