Heritage project in Olympia needs more cash

The proposed Heritage Center for Washington's Capitol Campus in Olympia has become a financial headache for state leaders who are looking for ways to keep the project alive.

The Heritage Center would house the State Library and the State Archives, as well as a public auditorium and museum space dedicated to Washington history.

It's designed to be an eye-striking addition and a tourist draw for the Capitol Campus, and is part of $221 million in building projects near the Legislative Building.

But the Heritage Center will be paid for differently from the Executive Office Building that will sit on top of it. To keep the $141 million center alive, Gov. Chris Gregoire has proposed adding $27 million worth of construction bonds to the project.

It originally was to be paid for by selling investments called certificates of participation. Those were supposed to be backed by a $2 fee tacked onto filings for real estate purchases and other transactions, as well as the rent now paid to house the State Library in Tumwater. But with the real estate market's decline, the interest rates charged for the certificates have gone up.

That makes it more expensive to borrow the same amount of construction money, Assistant Secretary of State Steve Excell said.

"It's no different than when you go to buy a house," he told The Olympian.

But it would need the Legislature's approval, and lawmakers will be facing a giant $5.7 billion budget deficit when they convene their session next month.

"The revenue source just doesn't look adequate," said Rep. Hans Dunshee, who leads the construction budget committee in the House. The Heritage Center has merit, he told The Olympian, but more money is not guaranteed.

Backers of the project say the buildings would be a powerful draw as the gateway to the Capitol Campus.

"This is a very big project, very important to the state's heritage, and to people's access to libraries and archives, and learning about state government and history," said Sen. Karen Fraser, who leads the Senate construction budget committee.

She acknowledged, however, that adding money to the project could be a hard sell in a session that will be marked by large budget cuts.