Lacey advances work on economic development strategy amid growth, vacancy concerns 

The Lacey City Council held a work session on Tuesday, May 27, to review progress on a five-year economic development strategy aimed at guiding the city’s future growth, enhancing job creation and revitalizing commercial areas.  

The initiative is a core component of Lacey’s comprehensive plan and is expected to be wrapped up by the end of the year. 

The strategy, developed in partnership with consulting firm ECONorthwest, focuses on identifying short- and medium-term actions that city staff can implement to strengthen Lacey’s economy.  

Consultants Brittany Bagent and James Kim presented findings from the project’s research phase, including demographic shifts, employment patterns and real estate conditions. 

“Lacey, like much of the region, is experiencing an aging population and increasing diversity,” Kim said. “There’s a growing share of single-person households and a shrinking proportion of four-person households, suggesting shifts in housing demand.” 

Employment data revealed while Lacey residents often commute out of the city for work, especially in sectors like education, health care, retail and government, a large portion of workers within Lacey come from surrounding areas.  

This commuter dynamic has implications for local economic planning and service provision. 

The consultants also discussed disparities in commercial activity.  

Retail leakage data showed residents often leave Lacey for restaurants and auto dealerships, while the city attracts visitors for general merchandise and building materials purchases.  

“That highlights both strengths and gaps in the city’s retail mix,” said Kim. 

Vacancy trends are another focal point. 

While office vacancy rates have declined since the Great Recession, from about 10% to 4%, midtown Lacey has struggled with empty retail spaces, including the long-vacant Sears and Rite Aid buildings.  

However, new tenants are beginning to move in, with developments like Chipotle, 7-Eleven and Banfield Pet Hospital underway. 

Bagent emphasized the importance of prioritizing investments and refining the city’s role within the broader regional economy.  

“With limited resources, the city must identify where it can have the greatest impact,” she said. “We’re also asking what stories should be told about Lacey’s successes, something your stakeholders say the city has been too humble about.” 

Several council members also called for a more tailored approach to development strategies based on the city’s three distinct commercial zones: south Lacey, midtown and Hawks Prairie.  

The consultants will continue stakeholder engagement over the summer through interviews and focus groups. A final strategy document with specific goals, actions, and metrics is expected in the fall.