PORT ORCHARD — If plans shared with the City Council Feb. 13 come to fruition in the next few years, Port Orchard’s 640 Bay Street property will include a 55,000-square-foot, five-story residential/commercial use building developed by Waterman Partners, LLC that will likely include new space for the city’s Kitsap Regional Library branch.

At the Port Orchard City Council meeting at City Hall, council members viewed a presentation given by the partnership that shed light on the group’s plans for the city-owned property. Afterward, councilmembers unanimously approved the proposal as the winning bid for the property. The next step for Waterman Partners, LLC and the city will be negotiations led by May Rob Putaansuu to finalize a purchase and sales agreement between the two parties.

The centerpiece of the proposed mixed-use residential/commercial development is space for the library to relocate from its current 8,500-square-feet Sidney Street location next to the waterfront. Plans currently include 8,201 square feet of space, but it could offer between 8,500 to 10,500 square feet of space for the Port Orchard Library, lead Waterman partner Steve Sego said.

Also part of the building conceptual plan is space for a 3,000-square-foot restaurant, for which Sego said he has been in talks with a local potential restauranteur who has shown interest in the space.

At least 44 apartments of varying sizes would be built above the library and restaurant, including 11 417-square-foot studio units, 21 677-square-foot one bedroom units, three 867-square-foot two-bedroom units and two 1,172-square-foot three-bedroom units.

While the project admittedly is in its early stages of design and development, Sego estimated the rental rates for the apartments would range from $800 to $2,200, with one-bedroom units in the $1,200 range (depending on market conditions at the time of opening) and two- and three-bedroom units at a higher rate.

Partner and architect Steve Rice told the council that the building’s elevation would feature a primarily modern, progressive facade with elements reflective of the historical nature of the downtown area.

A signature design element of the project would be what the partnership referred to as “the Hillclimb,” a raised-level, stairstep walkway along the Frederick Street incline from Bay Street to Prospect. A gathering space at the midpoint of the escalating walkway also has been included in the design.

Rice said the building plans offer three fronts to the building — on Prospect, Frederick and Bay streets. The developers said they are exploring parking options for the project — they have been in discussions with nearby property owners to locate the best option to meet the city’s requirements. In their proposal, the Waterman partners said they expect to “substantially exceed the minimum parking stall requirements of the Mixed Use Pilot Program to support our expectations of market demand.”

They stated that off-street parking on one of two sites within 300 feet of the apartment entrance likely will be included in the project.

A proposal by the partnership — the sole submittal to the city’s request for proposal issued Nov. 17 — was earlier reviewed by a selection committee chaired by Mayor Rob Putaansuu and determined to meet the RFP’s criteria. Nick Bond, Port Orchard director of community development, then recommended to the council that it declare the bid as the winning proposal.

In addition to RickFergusMiller Architects principal Steve Rice, partner Roger Long also is participating in the project. The architectural firm has designed a number of construction projects in Kitsap County, including Spyglass Apartments and Townhomes in Bremerton and the Edward Rose and Sons residential development in Poulsbo.

BJC Group has been assigned as the project’s general contractor. The company estimates that up to 25 trades will be involved in the building’s construction, with three to four employees per trade.

Sego and his team estimates the project’s value to be between $15 million to $20 million. Permitting is expected to begin this spring and be completed in the summer, with city approvals coming later in the fall. If all goes smoothly, Sego said he expects construction could begin the first part of 2019, with final completion in late 2019 or early 2020.

The project’s development team is considering building toward a “Built Green” 4-Star rating for the development, signifying it meets environmentally-friendly standards as set by governmental/commercial partnerships in the area.

After the presentation, Sego, also co-owner of Waterman Mitigation Partners of Port Orchard, said his partners have the same passion for the Port Orchard community “that we love so much.” Members of the Waterman team include Steve Rice of RiceFergusMiller, an architectural company; Wes Larson of Sound West Group, a real estate development company; and Robert Baglio of BJC Group, a local construction company.

In its proposal, the team states that it has an overriding objective “to demonstrate that, through good design, buildings can contribute to the overall character and success of our urban places, especially in small cities like Port Orchard.”

The 10,454-square-foot property, which is about 500 feet from the Port Orchard waterfront area, includes about 85 feet of Bay Street frontage. The site was acquired by the city in August 2014 for $148,000 from Turnaround, Inc. A building on the site, which housed the Los Cabos restaurant, was destroyed by a fire in July 2013. The owners subsequently tore down the building, leaving a vacant lot at a prime downtown location fronted by Bay Street and intersected by Frederick. The southern uphill site boundary abuts Prospect Street.

Under terms established by the RFP, the city is seeking to recover funds it spent acquiring the property, including the purchase price and other miscellaneous expenses totaling approximately $145,000. The RFP also sought assurances that the property would be developed within 30 months of its acquisition.

When completed, Port Orchard would see the creation of its first-ever downtown mixed-use development project under a pilot project initiative started last year by the council members and the mayor.

The proposal from Waterman Partners, LLC is the culmination of a concerted effort by the mayor and City Council to accelerate efforts to encourage transit-oriented, mixed-use redevelopment in downtown Port Orchard. In November, the city introduced a mixed-use pilot program and development regulations ordinance targeting underperforming downtown properties ripe for redevelopment. The ordinance, known as the Mixed-Use Pilot Program (MUPP) Ordinance, was passed by the City Council Nov. 14.

The new ordinance allows for a five-story building not to exceed 58 feet on the site. According to the city’s RFP for the property, a 10-foot, or one-story, height bonus may be granted for the site if a grocery store was to be included in the proposal. The RFP requires either on-site or off-site parking, or a combination, at a minimum of 0.5 stalls per dwelling unit.

The ultimate goal of the MUPP pilot project, and through recent revisions to the city’s development and design standards for commercial buildings, is to spur both retail and commercial development downtown that would include up to 200 residential living units. Previously, Port Orchard city code only allowed downtown residential units 3,500 square feet or larger, which Putaansuu said is not economically viable.

“I don’t believe that’s the market,” the mayor said in November prior to the pilot project’s introduction to the city planning commission. “We need to be denser than that (downtown).”

The RFP included the city’s goals for the 640 Bay St. site, which includes:

• Maximizing the site’s development potential and contribute to the vibrancy of the downtown area, which would bring employees, residents, customers and visitors to Port Orchard;
• Construction of a mixed-use project containing at least 3,000 square feet of commercial (retail or restaurant) space and at least 20 residential dwelling units;
• Construction of a mix of market-rate and affordable housing units;
• Streetscape improvements along the frontages immediately abutting the project site;
• Enhancement of the Frederick Avenue right-of-way abutting the site, which may include a proposal for a partial vacation of the west-half right-of-way.
• Project construction to begin within 30 months of entering into a sales agreement for the property.

The 640 Bay St. development would offer potential residents close proximity to a Kitsap Transit pick-up/drop-off location at the waterfront and easy access to both the foot ferry and its Bremerton destination, where the fast ferry and Washington State Ferries provide sailings to downtown Seattle.