Richland’s Kingsgate area seems poised to gain its first hotel, a second apartment complex and a new storage facility.

The city of Richland is considering selling 15.44 acres of city-owned property in the Horn Rapids Business Center to Lee Petty, who owns CEL 2 LLC and LCR Construction. The property is on Kingsgate Way, opposite the Horn Rapids RV Resort.

The deal, valued at $3.27 million, was discussed favorably by the city’s economic development committee on Jan. 23 and will be forwarded to the Richland City Council for final approval at a future, undetermined date.

Terms, including the final number of apartment units, have not been finalized.

The project is subject to securing approval to build in the C-3 zone, a general business designation that does not authorize apartments. The city notes CEL 2 will have to amend the zoning map to proceed with its plans.

According to the plan reviewed by the economic development committee, CEL 2 will build an 80-room hotel facing Kingsgate Way at the front of the property.

A 180-unit apartment complex and a 315-unit storage complex would be constructed to the rear, between the hotel and Hanford Legacy Park, which borders Richland’s Babe Ruth Sports Complex.

The apartments would be contained in four buildings arranged in a square around a central yard.

The complex will have one driveway to access Kingsgate and a second to access a private road along the existing Vicinity at Horn Rapids apartments, the $38 million complex built by LCR Construction in 2020. Construction at that site continues, with the latest building now taking shape across the narrow road from the future project.

Vicinity, with 288 units, occupies a prominent spot near the intersection of Kingsgate Way and Highway 240.

The local apartment rental market remained notably tight at 4% vacancy in fall 2022, when the University of Washington Center for Real Estate Research conducted its most recent survey of rental property owners.

The survey covered 10,160 apartment units in Benton and Franklin counties with an average size of 882 square feet and average monthly rent of $1,316.

According to the survey, there were 400 apartment units available for rent in the Tri-Cities, which has more than 310,000 residents. Of those, 155 were one-bedroom units and 201 were two.

The city will deposit proceeds from the sale into its industrial development fund.