Business Community Government

City sees benefit to multifamily housing — but keeping commercial presence — at Peninsula Shopping Center

Ever since grocery store QFC left the Judson Street area fifteen years ago, the Peninsula Shopping Center has had an up-and-down existence.

A handful of businesses recently moved into the complex, joining a core of established restaurants and retailers. Yet the old grocery space has remained vacant since 7 Seas brewery moved in 2021.

An LLC controlled by Gig Harbor-based Rush Companies and members of the Milgard family owns the complex. Rush, a prominent local developer, remains mum about its plans for Peninsula Shopping Center and declined to comment for this story.

But Eric Baker, Gig Harbor’s community development director, said the city is interested in what else the property can become, potentially via a private-public partnership. Future development plans could include multifamily housing, while retaining businesses there.

‘Middle housing’

Following a state-mandated update to its Comprehensive Plan, the city is in the process of overhauling its zoning codes to allow for more middle housing.

Middle housing varies widely, from apartment complexes to duplexes to townhouses. It is meant to fall in the “middle” range of housing options and to contribute to housing density and increased affordability. The Judson Street area is one of a few places the city has identified for specific work within Gig Harbor.

The Peninsula Shopping Center on Judson Street. Photo by Vince Dice

Baker said the city recognizes the importance of maintaining a commercial presence at the center. Multifamily housing could take the form of a mixed-use building, which retains businesses in the development, typically on the bottom floor. 

“Taking out the commercial and just putting in townhomes would be beneficial to a number of folks. But it wouldn’t necessarily get at the fact that the Peninsula Shopping Center doesn’t just benefit the shopping center, or even the area directly adjacent to it,” Baker explained. “In many ways [it] can be a catalyst for the small business community all around downtown. And, obviously, their parking area is a particular public asset, even if it’s not owned by the public. A lot of folks utilize that parking area to go to festivals [and] recreate in the downtown. So, from the city’s perspective, we’re really interested in having a public-private partnership.”

Downtown is different

While building multifamily housing in the area would help the city meet the state’s mandate to create more middle housing statewide to help mitigate the housing crisis, Baker emphasized that the city hasn’t decided anything. The city needs to create more housing density and prepare for growth, but “our Comprehensive Plan is very clear that the downtown area is treated differently.”

The plan leans into “the small-town, historic nature, which higher densities can run up against. So we need to make sure that this project and conversation includes all of the folks [in the downtown area], as the downtown really is the jewel of Gig Harbor,” Baker said. “We want to make sure that we improve that, we don’t create an impact to it.”

The city is overhauling its zoning codes, which have historically encouraged single-family homes. Many of these homes now cost upwards of $900,000, rendering them unaffordable for many who work here.

More housing options

Moreover, Baker pointed out, the population of the town nearly doubles during the daytime, with people coming into the city to work, shop and get medical care. This means a significant amount of traffic crowds city streets during the daytime. That creates what  Baker called “a series of choke points,” because the people who come into town for work tend to live on the Peninsula. “Very few people are going to be OK getting paid somewhere near minimum wage, if they have to pay $5.50 cents a day just across the bridge.”

Creating more multifamily housing also opens up options for the city’s elders, Baker said. One-third of Gig Harbor’s population is 65 years old or older. Large single-family homes can be both too big and too isolated for some older individuals. If they can’t drive or can only drive at certain times, Baker said, it is harder for them to socialize, and their mental health suffers. It can also create potentially unsafe situations for those living alone.

Gig Harbor has several elder living facilities. But, Baker said, “the need for that type of housing is going to grow and in many cases that is usually multifamily driven. We really need to be focusing on not just the people moving to our community and their needs, but the growing needs of our community.”

The transit problem — and possible solution

But even if multifamily housing went into the shopping center, the limited amount of public transit is a fairly large wrinkle. Overall, the city has limited parking, and just increasing housing isn’t going to increase the number of places to park.

Only one Pierce Transit route serves Gig Harbor, running from the Tacoma Community College Gig Harbor campus to the Purdy Park and Ride. Pierce Transit and community partners typically expand service in the summer.

The transit agency has long faced financial challenges. Three-quarters of its funding comes from a local sales tax — which, at 0.6%, is among the lowest at comparable peer agencies. Pierce Transit has not committed to bringing a measure to voters to raise that tax for more funding.

However, even if the agency brought a measure to voters and they passed it, Pierce Transit may not necessarily beef up service on the Peninsula, specifically because it’s such an isolated part of the county. Baker pointed out that Transit would likely concentrate resources where most of the people it services are located: on the mainland.

Kitsap collaboration?

But this doesn’t mean that there isn’t a solution. Baker said that it could be possible to work with Kitsap Transit to get people into Gig Harbor. Many people who live in Kitsap County work in Gig Harbor.

“One of the conversations we’re probably going to be having is, ‘How do we better coordinate with the other jurisdictions on the Peninsula?’” Baker said. “We’re a city of 13,000 people, but we are the regional service provider to a group of probably around 75,000, ranging from Belfair to Port Orchard. … We are serving with medical services, with retail, with jobs — a much, much larger population and most of that is in the jurisdiction that is not Pierce County.”

“Kitsap Transit is just on the other side of the line,” Baker continued. “Shouldn’t we be having conversations with them about what potential expansion could look like, or what other kind — if it isn’t a regular bus service — what other types of services we could contract for or discuss? Obviously, that would also have to include Pierce Transit but I think we are going to have to turn over a lot of rocks to be able to serve our long-term transit needs in our community.”