Four Thurston County areas under consideration for federal economic program

From the Capital Mall area in Olympia to central Tumwater and Midtown Lacey, four Thurston County areas have been nominated for designations as federal Opportunity Zones.

The nominations from the office of Gov. Bob Ferguson could open new possibilities for housing and commercial development, assuming federal approval is granted.

The Opportunity Zone Invest Research Team shared tract-level data with The JOLT on Oct. 15 and Oct. 19.

According to the team, the four nominated tracts, numbered 105.10, 105.20, 108.01 and 112, have a combined population of about 18,600, or about 6 percent of the county population. 

The U.S. Department of the Treasury has until Nov. 27 to complete its review, with a possible extension to Dec. 28. 

If approved, the designations would take effect on Jan. 1, 2027. Because the Department of Treasury reviews the nominations independently, approval of one does not prevent approval of other nominees.

Local investment opportunities 

In Olympia, tract 105.10 includes the Capital Mall area. The Capital Mall Triangle Subarea Plan encompasses about 288 acres.

In 2025, the city approved higher building height limits and an affordable housing height bonus for the area. 

Nearby, tract 105.20 includes the Harrison Avenue Northwest corridor. The city plan notes many locally owned small businesses in the area. A small portion of the tract falls within Tumwater. 

In Tumwater, tract 108.01 includes city hall on Israel Road Southwest and the Port of Olympia airport office.

If certified, the tract would be the first Opportunity Zone in Tumwater. The city linked its application to brownfield revitalization, a goal in its strategic plan. 

Lacey, meanwhile, has a longer history with the program. Its nominated tract, 112, includes the Midtown District and Sleater-Kinney Road and Martin Way corridor.

According to the research team, the tract is the only nominated tract in Thurston County with an existing Opportunity Zone designation dating to 2018. 

The federal program offers tax benefits for qualifying private investments. However, certification does not guarantee financing, and no fixed amount of investment is allocated to any tract.

The research team also said cities with adopted development plans and available sites may attract investors sooner. 

“The cities with a plan and a site ready will see the benefit first. Olympia’s Capital Mall Triangle and Lacey’s Midtown already have the planning investors look for,” the research team said. 

Community considerations 

Three other qualifying Thurston County tracts were not nominated. They are tract 108.02 in Tumwater, tract 116.25 in south Lacey and tract 122.23 near Providence St. Peter Hospital.

Tract 122.23 has a 28.9 percent poverty rate, compared with 9.5 percent countywide, according to research team data based on 2020 to 2024 American Community Survey estimates. 

The Washington State Department of Commerce scored and recommended applications using a 185-point system. Market and investment readiness represented up to 104 of the total, compared with no more than 21 for economic need. 

The research team said it has not reviewed scores or individual applications. 

Renters account for 70 to 84 percent of households in the nominated tracts, compared with 32 percent countywide, according to the research team. Federal rules do not require job creation or include specific protections against tenant and small business displacement in opportunity zones.

“These are renter neighborhoods. Whether a designation helps the people who live there now depends on local housing and (small business) policy, because the federal rules don’t address it,” the research team said. 

The nominations also change the outlook for existing Opportunity Zones. Downtown Olympia and two unincorporated county tracts received designations in 2018, but no longer qualify under the updated program. Their designations expire on Dec. 31, 2028. If certified, the Lacey tract could continue as a zone through 2036. 

The updated program requires annual reporting on investments by census tract, industry, residential units and approximate employment. The original program lacked public tract-level investment reporting. 

“For the first time, funds have to report investments by census tract, so in a few years we should be able to see what actually landed in these four tracts,” the research team said. 

To view the full list of nominated tracts by county, including the four in Thurston County, visit the Opportunity Zone Invest website. 

To view rural and non-rural qualifying census tracts by county and tribal lands, visit Washington Opportunity Zones 2.0 interactive map and dashboard.