"I wish I had some amazing news, so let me let you down now."
That's how Jon Rose, vice president of Raydient Places + Properties, opened a community meeting at Swift Water Elementary School in June 2024, addressing roughly 100 Harbor Hill neighbors who showed up hoping to hear that the 18.5-acre lot at Borgen Boulevard and Harbor Hill Drive was finally about to become something. It didn't. More than two years later, the fenced field is still a field. But this month, the city of Gig Harbor is putting forward a plan that could finally move the parcel, and it has nothing to do with finding a grocer.
If you've lived in Harbor Hill for more than a few years, you already know the shape of this story: a shopping center promised, a shopping center delayed, repeat. What most residents don't know is why it stayed empty long after the original excuses (a lawsuit, a pandemic) stopped applying. The honest answer is that the retail model the site was built around largely stopped existing. Grocery chains that once expanded into new suburbs are now merging, closing stores, and losing ground to online delivery. The Village at Harbor Hill wasn't waiting on the city. It was waiting on a version of the grocery business that mostly isn't being built anywhere anymore.
What the site was actually supposed to be
The Village at Harbor Hill was never conceived as an apartment complex. Plans on file called for 14 buildings and 154,447 square feet of retail space, anchored by a grocery store, with room for banks, restaurants, and medical offices rounding out the mix. At its peak, the project had signed tenants for roughly 80 percent of its non-anchor retail space. Today, somewhere between a quarter and a third of those smaller retailers have since walked away while the anchor slot sat vacant.
The timeline of what derailed it reads like a checklist of everything that could go wrong for a mid-2010s retail development:
- 2015: Town & Country Markets agreed to anchor the project as its lead grocery tenant.
- A legal dispute between the developer and the city over transportation impact fees stretched on for years before settling.
- By summer 2020: Town & Country Markets had exited the deal entirely, citing construction costs that had climbed since the original agreement.
- 2020 to present: grocery industry consolidation, store closures tied to mergers, and the shift toward online grocery delivery have made national and regional chains far more hesitant to open new mid-box locations anywhere, not just in Gig Harbor.
By the time Rose and retail specialist Peter Powell of Powell Development stood in front of that Swift Water Elementary crowd in June 2024, they weren't close to landing a new anchor. Powell told the room they were "looking for ideas" on how to move forward at all.
The Trader Joe's tease that still hasn't landed
The one moment of real energy at that 2024 meeting came when Gig Harbor City Administrator Katrina Knutson mentioned that someone from Trader Joe's University Place store was in the audience, and that a private conversation that evening gave her hope the city could eventually pitch the chain on a Harbor Hill location despite past rejections. The crowd's reaction, by every account of the meeting, outpaced anything else discussed that night.
The rest of the brainstorming session amounted to residents and developers naming every mid-size grocer they could think of: Sprouts Farmers Market, Aldi, PCC Community Markets, New Seasons Market, even REI. WinCo Foods drew a split reaction, split enough that one Heron's Key resident, Karen Coles, offered the kind of line that sums up a neighborhood's patience better than any council memo:
"Chicken is chicken. I'd be willing to buy it" at a lower price.
None of those conversations have produced a signed lease. As of this writing, there is no grocery tenant, and Raydient's own vice president has said the company lacks enough information to fully assess how a pending city proposal will affect the project.
What's actually on the council's desk this month
That proposal is a Multi-Family Tax Exemption, or MFTE, and it would let a developer skip a portion of property taxes for 12 years in exchange for building housing with income-restricted units. The Gig Harbor City Council has a first reading scheduled for September 14 and a second reading and vote set for September 28.
The math on what "affordable" means under this program is worth sitting with, because it's thinner than it sounds. Under the version currently being discussed, at least 20 percent of units in a qualifying project would need to be rent-restricted for households earning 80 percent of area median income or below, with a minimum of 20 total units and no maximum cap on project size.
| Household income (family of four) | Monthly rent (2-bedroom, utilities included) | |
|---|---|---|
| Area median income, Gig Harbor | ~$118,000/year | — |
| 80% AMI threshold (rent-restricted) | ~$94,400/year | ~$2,360 |
| Market rate | — | ~$2,500 to $2,550 |
That's roughly a $150 to $190 monthly gap between "affordable" and market rate on a comparable unit, not the deep discount the phrase "affordable housing" tends to imply. Some council members, including Ben Coronado, have pushed a different structure entirely: a minimum of 10 total units with 25 percent rent-restricted, rather than 20 units at 20 percent. Others have floated lowering the income threshold to 70 percent of AMI, which would tighten eligibility to about $82,600 a year for a family of four. None of these variations has been finalized, which is exactly why the September 14 and September 28 meetings matter if you live nearby.
Raydient has also reportedly explored selling the Village property to another developer as recently as May 2026, and the project's earlier cost estimate, once pegged around $44 million, is now considered outdated given how much construction pricing and the retail leasing environment have shifted since that number was set. Whatever gets built here, it will look different from the plans approved back in 2018.
Everything else at Harbor Hill already got built
Here's the part that puts the empty corner in perspective: it is the only unfinished piece of a master plan that is otherwise complete. Raydient's broader Harbor Hill community already includes roughly 500 single-family homes, another 500 multifamily units, the Heron's Key senior living community, four public parks, a YMCA, and Swiftwater Elementary School. Heron's Key alone represents a $145 million investment, sitting on 18 acres directly adjacent to the still-vacant Village site, with 184 apartments and 10 cottage homes for independent living plus an on-site health center.
In other words, Harbor Hill isn't a stalled neighborhood. It's a finished one with a single 18.5-acre gap where the retail hub was supposed to go, and that gap is now the subject of active zoning decisions rather than another round of grocer outreach.
What to actually watch for
If you live in Harbor Hill, the two dates that matter are September 14 and September 28. The first reading will show how much the council's thinking has shifted since the community meetings, and the second reading is where the MFTE ordinance either passes, gets amended, or stalls again. None of this answers the original question residents have been asking for over a decade, which is whether they'll ever get a walkable grocery store in the neighborhood. It answers a narrower, more immediate one: whether the 18.5 acres at Borgen and Harbor Hill Drive becomes housing before it becomes anything else.
Either way, the corner is about to stop being empty. It's just not going to look like the rendering everyone remembers.
If you're weighing what a shift like this could mean for property values, rental demand, or timing a move in or out of Harbor Hill, that's exactly the kind of neighborhood-level question Catt Johnson tracks closely. Book a call and let's talk through what it actually means for your situation.
