The history of Capitol Lake began in 1855 when the territorial legislature accepted an offer of 12 acres of land by Olympia’s founder, Edmund Sylvester, for the site of the capitol. This land was located on a bluff bordered by tidelands. In 1911, the State Capitol Commission conducted a design competition for Washington’s capitol building and selected the Wilder and White plan for a grouping of buildings on the bluff overlooking the city and Puget Sound.
Their Plan called for access to the capitol group from the north, stating that the city should move toward providing “...a fine boulevard...connecting the three distinctive ridges contained in the city limits, and giving access to the coast towns. On the axis of the capitol a fine approach from this boulevard to the foot of the steps would be made with a carriage approach on either side, and a boulevard to Tumwater along the water’s edge there connecting without the proposed Pacific highway...A tide lock at the Boulevard [to the west] would form a lake and the whole effect would be visible from most parts of the city as well as from the sound.”
In 1937 the Legislature took its first action toward the creation of Capitol Lake. It authorized the State Capitol Committee to 1) develop and extend the state capitol grounds, 2) seek Federal assistance, and 3) made an appropriation of $150,000. The Act called for the improvement of the area then described as the “Des Chutes Water Basin” in Olympia. This water body was to become a part of the capitol by purchasing or condemning tidelands or other shoreline properties.
The plan called for “submerging of the mud flats by the creation of an artificial lake through the construction of a dam, bulkhead or spillway near the Fourth Avenue Bridge”. Additional funds were to be sought from the Federal government and the Committee was “to [do] all things necessary to fulfill the purpose of this plan”.
The idea of creating a lake received popular support at that time. The plans for a freshwater lake, dam, and connecting road system were seen a way of improving the community. Permit applications were made, and public hearings were conducted, with the only controversy being from the City of Tumwater and barge towing companies who had access to the Old Olympia Brewery. Action to construct the lake was suspended at the onset of World War II.
After the war the vision re-emerged with the State Capitol Committee approving the Deschutes Basin Project. The July 7, 1948 Daily Olympian indicated that “the area [Little Hollywood] has long been considered by Olympians as an eye-sore. Now it will be replaced with a clear beautiful fresh water lake with mirrored reflections of the Capitol building dome and the spires of the tall stately trees for which the Evergreen State is noted.”
In 1947, Governor Monrad C. Wallgren initiated the Project by declaring an emergency to get the project started and authorized the issuance of bonds.
The State submitted an application to the U.S. Army Corps of Engineers on June 1, 1948 for approval to construct a 230,000 cubic yard earth dam at the north end of the basin (5th Avenue) with an 80 foot concrete spillway structure. Along with the dam, the request was made to construct an earth fill of 186,500 cubic yards along the westerly shore for Deschutes Parkway and an additional earth fill of 375,000 cubic yards at the northeast end of the basin, where Olympia’s former Capitol Lake Park was located. This request was subsequently approved by the Corps on February 4, 1949, and construction was completed on October 10, 1951.