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The former King Oscar and OYO hotels in Centralia will officially be transformed into The Varsity Inn North and The Varsity Inn South, respectively, with anticipated full openings set for this fall.
This announcement comes over a week after the Centralia City Council approved two developments with Sage Investments LLC for the Kirkland-based developer to turn the two former hotels into split-usage buildings. The top floor of each building will become residential studio apartments while the bottom floor will be maintained for commercial use.
Construction is underway on both properties, but The Varsity Inn North, located at 1049 Eckerson Road, is already leasing for studio apartments, with full opening expected for this fall. The Varsity Inn South, located at 720 Harrison Ave., is slightly further behind than the North property but is still expected to open in the fall. Sage Investments also transformed the former Motel 6 into Valley View Homes under a development agreement with the city.
Whitney Wilkins, community relations manager with Sage Investments, told The Chronicle that the two properties were viable for the developer’s mission to give underutilized hotels a better use for affordable housing, while keeping much-needed lodging opportunities in Centralia.
Wilkins clarified that while the developer is not currently aiming to offer permanent supportive housing, she said the two properties will be classified as “attainable housing,” with rental rates expected to hover just below $1,000 per month for standard studio apartments.
“It’s naturally affordable workforce housing. We make sure that we are really competitive in the market, and that’s why we thought Centralia would be a really good place for these types of projects,” Wilkins said. “These are underutilized hotels that could be converted into housing. We wanted the rate to be really reflective of that competitive rate and for specifically what a studio unit is. It’s adding more of that supply.”
Through a partnership with the Northwest Sports Hub, the properties will be sports themed not just in name but in decor, which will include letterman jackets from local high schools. The buildings will also give visitors another lodging option, especially for those coming into the Hub City for sporting events. In a recent retail analysis, the Economic Alliance of Lewis County found that the lack of hotels in Centralia is causing visitors to spend money in other neighboring cities.
“We really worked with the Sports Hub and the City of Centralia to see what the events are and the numbers of the typical lodging that they see and the lodging units that they’re going to need so that not everyone is staying in Chehalis, for example,” Wilkins said. “This split option is a good option because it still allows for those short-term stay lodging units for sports events or any other events that happen in Centralia. As of right now, our intention is just for that true short-term lodging stay. From what we’re seeing, that is the need right now.”
The Sage Investments team hopes that the development of Valley View Homes sets a precedent for the Varsity Inn North and South properties. Wilkins said the top floor of the Valley View Homes property was fully leased within a couple of months. The property management company, Coast Property Management, is maintained for all three of Sage’s transformed properties in Centralia.
“On the residential side, we leased up super fast. That was a huge success,” she said of Valley View Homes.
The development agreements for the Varsity Inn North and South properties took some time to get to the finish line. The resolutions were originally placed in front of the city council for their July 8 meeting, but their approval was postponed to Aug. 12 due to ongoing council questions, according to city staff, particularly about the construction of a three-foot flood wall at the former OYO property, which has been completed.
Wilkins clarified that the delay was mostly on Sage Investments’ end.
“I really do appreciate the City of Centralia’s enthusiasm. It was great that they were moving this forward, but we didn’t get a chance to review these two properties, the former OYO and King Oscar,” she said, referring to the development agreements. “They were almost identical to Valley View. That was just us. We just wanted to stop and pause and make sure that if we needed to change things based on the uniqueness of these two properties that we did that. I think there were probably two minor edits that were made in the end, and then we went back to the city.”
To read more about the development agreements between the city and Sage Investments, visit previous Chronicle reporting online at https://tinyurl.com/mtzvtsxw.
