Developer offers a bit more info on collapse of Molbak’s redevelopment

The real estate group behind a redevelopment project involving the well-known Woodinville garden center Molbak’s Garden + Home offered a bit more clarity Monday about why the project won’t be blooming anytime soon. The developer is blaming various factors, including interest rates and construction costs.

The project exploded into the news last week when Molbak’s accused the developer, Green Partners, of suddenly cutting the store out of their joint plan to build a new Molbak’s, plus apartments, restaurants and other amenities on 19 acres at and surrounding the site of the existing garden center.

In reply, the developer said it was actually shelving the long-planned Gardens District project altogether. But it didn’t immediately explain why.

The dispute has raised concerns among Woodinville City Council members, who’ve made the project a centerpiece for their downtown growth vision, and among Molbak’s patrons, who’ve wondered about the store’s future.

Molbak’s was started by immigrants from Denmark in 1956. Green Partners, which is associated with a company that manages investments for Microsoft co-founder Bill Gates, bought the land from the Molbak family in 2008. The plan since then has been to create a unique housing, shopping and entertainment area with an economically and socially sustainable design.

In an emailed statement Monday night, Green Partners went into slightly more detail about the status of the project.

“Late last week, Green Partners asked Molbak’s to continue negotiations over the future of the Woodinville site after Molbak’s upended the talks. Green Partners, which for years has allowed Molbak’s to operate rent free, hopes Molbak’s will abide by the terms of its existing lease, which continues for several more years,” the statement said.

“The wider Gardens District project as envisioned is no longer being developed due to a combination of factors, including the economic uncertainty brought on by higher interest rates and rising construction costs along with the complexity of creating a large-format garden center in a dense urban development. We remain grateful for the community’s patient support and hope to resume development of the land when conditions allow.”

Green Partners declined to say on what date the Molbak’s lease is set to expire, as did Molbak’s, which said it was “shocked and devastated” when it initially got notice that the developer was altering the project.

“Green Partners decision to remove us from The Gardens District has created uncertainty about our future. We’ve agreed with Green Partners to not talk publicly about details of our lease and we’ll honor that commitment,” Molbak’s CEO Julie Kouhia said in an emailed statement Tuesday.

“But we can say that our goal is to work out a lease that’s financially feasible and allows us to stay in our long-term home of Woodinville. We’ve asked Green Partners to agree to mediation with us so that we can find a way forward that works for both sides,” Kouhia added.

In June, the Woodinville City Council agreed to give Green Partners a height variance and development rights in return for public benefits, including infrastructure upgrades, fees and a new Molbak’s.

“Last week, the Woodinville City Council encouraged Green Partners and Molbak’s to re-enter discussions in the hope that the two parties may still be able to reach an agreement that keeps Molbak’s in Woodinville,” Kevin O’Neill, assistant to the city manager, wrote in an email Monday. “Today’s statement from Green Partners signaling their willingness to continue negotiations is a positive step in the right direction.”