‘It’s a Good Investment’: Yelm Council Voices Support to Acquire 640-Acre Property For Remaining Payment of LID

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The Yelm City Council during a study session on Tuesday, April 6, voiced its support in acquiring a 640-acre property it currently holds the deed to in lieu of missed local improvement district (LID) payments.

City staff has been busy assessing the financial situation regarding the Thurston Highlands property and considering its options since it was granted the deed in lieu of foreclosure in 2017 for delinquent payments to the Killion Road LID.

A local improvement district, or LID, is a form of financial structuring formed by the city to assist developers or property owners with financing capital projects. The city manages the Killion Road LID, but payments are made to a bank which holds the loan. 

In 2012, the city refinanced payments with property owner DDD Washington LLC. But in 2016 and 2017, the group missed payments. The city started the foreclosure process, but instead the deed was forfeited over to the city in lieu of those payments. 

The Killion Road LID taxing district was formed in 2006, according to previous NVN reports, and DDD Washington owed roughly $4.9 million to the LID in 2017 when the city began foreclosure proceedings. The total assessment of the LID was more than $10 million and included 97 properties, though the current property value as of 2021 was not known. 

It’s estimated the LID has between $300,000 and $400,000 in payments left before it’s dissolved, though Mayor JW Foster said there could possibly be more debts that need to be paid off. The LID must be paid off by 2024 and the city has until then to decide what it wants to do with the land. 

The 640-acre property is located southwest of Yelm proper and there are currently no developed roads leading onto the property. 

Though the city currently holds the deed to the parcel, it does not hold formal ownership. 

During the April 6 meeting, Councilmember James Blair asked Foster if the property could be used as a gopher mitigation site, to which Foster responded that the soil and densely-forested land could not be used as a mitigation site. 

“With that being said, honestly, I’m leaning more to just selling it then,” Blair said. 

Councilmember Molly Carmody asked if the city could lease it out as a solar farm or for other renewable energy resources. Foster said that was possible, though noted that the parcel is relatively land-locked. 

“The entire area is zoned master-planned community, which is basically a blank slate waiting for a developer to come forward and say ‘This is what I want to do with it.’ And if it’s consistent with our vision, and (comprehensive) plan and development standards, it could go forward,” Community Development Director Grant Beck said. 

Councilmember Terry Kaminski, who separately works as a Yelm realtor, said the city “would be crazy” to not acquire the property for the repayment of the LID. 

“A basic 5-acre piece, with maybe a septic design and maybe a well, we’re talking over $200,000 for a 5-acre piece in the county, in the Yelm area. So, let’s get a perspective. If we’re really just talking the sum of the money, that’s crazy,” Kaminski said. 

No action was taken during the study session, but is expected at future council meetings. 

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