The Centralia City Council unanimously approved a development agreement with Sage Investment Group during the council’s Tuesday, Jan. 14, meeting, allowing the developer to turn Centralia’s former Motel 6 into a split-usage building with the top floor becoming residential studio apartments and the bottom floor remaining overnight hotel rooms.

No opening date for the development was announced.

The decision comes after the council approved a zoning district change request made by Sage in May 2024 allowing for apartment-hotel hybrids within the zoning district.

Based out of Kirkland, Sage currently owns three former hotels within that zoning district, including the former Motel 6 purchased in October 2022, the former OYO Hotel purchased in February 2023 and the King Oscar Motel purchased in January 2024. The three properties have a combined total of 313 hotel rooms.

Of those rooms, 147 are on the ground floor and 166 on the second floor.

Originally, Sage purchased the former Motel 6 with the intent of converting it into “nice, affordable” studio apartments while the former OYO was initially purchased to convert into permanent supportive housing.

By the time the King Oscar was purchased, Sage’s intent was to turn all three into apartment-hotel hybrids, as city staff had raised concerns about the potential impact to Centralia’s Lodging Tax Advisory Committee (LTAC) fund.

The hybrid model allows Sage to rent long-term to tenants while still having hotel rooms available to keep money flowing into the city’s LTAC fund, which goes toward grants given out to fund tourism-related activities and events.

“There will be some residential units on the ground floor,” Community Development Director Emil Pierson added during Tuesday’s meeting.

Residential units on the ground floor were required to comply with Americans with Disabilities Act (ADA) requirements.

The development agreement approved Tuesday is for 10 years. Centralia City Attorney Kyle Manley said flexibility allowing Sage to change its business model was built into the agreement.

Centralia City Councilor Mark Westley asked if this meant Sage could decide to do away with studio apartments at any time, to which Manley replied, “they could, but I do know that their plan is not to.”

Sage representative Whitney Wilkins was at Tuesday’s meeting. She assured the council that language was included into the agreement to allow for renovations that could benefit those renting the apartments, such as adding a workout or entertainment area.

“We have no intention to change the residential project at the building,” Wilkins said.

“Our (Centralia School District) superintendent has notified us that we have 200-plus McKinney-Vento families, so just having that as a potential (housing development) of being taken away and eliminated causes concern,” Westley said. “But I will take you at your word and sleep better at night knowing that at least that second floor, at the minimum, will provide that for our families in town.”

McKinney-Vento families receive federal assistance via the McKinney-Vento Education Act, which helps ensure students experiencing homelessness have access to everything from transportation, meals, school supplies, and access to special education counseling and tutoring.

Wilkins told the council rental rates would be in the “$800-ballpark range.”

“I don’t want to give an exact number because I have to go back to my team,” Wilkins added.

While no official opening date for the apartment-hotel hybrid was given, Wilkins stated it could be anywhere from within days to weeks, and said Sage was in the final steps of setting up the property’s website and working out the final details with the property management company.

To view the development agreement approved by the Centralia City Council on Tuesday, go to pages 86 through 93 of the council’s Jan. 14 agenda report at https://tinyurl.com/52xjj9pb. 

To learn more about the Sage Investment Group, visit its website at https://sageinvestment.com/.