Molbak’s Garden + Home will be closing, the well-known Woodinville business announced Monday, citing the collapse last month of a redevelopment plan for its longtime property.
Molbak’s has participated in confidential mediation this month with the real estate group that owns the property in downtown Woodinville, but the two sides haven’t reached an agreement for the garden center to stay, Molbak’s said in a statement. The company is “still working out the details for closing down,” according to CEO Julie Kouhia, who said Molbak’s would be “creating a transition plan in the coming weeks” and would share details in January.
The real estate group, Green Partners, said earlier this month that Molbak’s had several years remaining on its lease. Molbak’s didn’t immediately explain Monday why it wouldn’t remain open through that time, and said in a statement that Molbak’s has agreed not to speak publicly about the details of their lease.
When asked if terminating the agreement for the redevelopment changed the terms of Molbak’s lease, Kouhia declined to comment.
“There are no financially viable options that will allow Molbak’s to keep operating as the kind of nursery, company and community resource we want to be,” Kouhia said in a statement. “After considering many different possibilities and a great deal of discussion with the Molbak family, we’ve determined that we no longer have a path forward.”
Kouhia said the team made the decision to close “just in the last couple of days.” A closure date has not been finalized, but Kouhia said she anticipates the closing will be within the first quarter of 2024. Employees were told they would retain their jobs through the end of January, at least, she said.
“We’re going to take the next few weeks to absorb the full impact of our situation and determine the best way to write the final chapter of Molbak’s,” Kouhia added. “Our main goal is to close down with integrity and in a way that respects our employees, vendors and customers. We also want to find a way to celebrate the history, impact and joy of Molbak’s.”
Founded 67 years ago by Danish immigrants Egon and Laina Molbak and still owned by their family, the company has 70 full-time employees, 45 part-time and seasonal employees and hundreds of vendors, according to the garden center, which has grown into a shopping destination that attracts visitors from across the Puget Sound region.
The Molbak family sold the 19-acre property where the garden center is located to Green Partners in 2008. For the next 15 years, the company thought the plan was to redevelop the site as a housing, shopping and entertainment area with a new Molbak’s store, plus apartments, restaurants, other amenities and a unique, sustainable design.
The Woodinville City Council approved the Gardens District plan in June, agreeing to give Green Partners a height variance and development rights in return for various public benefits, casting the project as part of the Seattle suburb’s vision for its growing downtown.
But the long-awaited project suddenly withered last month, as Molbak’s publicly accused Green Partners of cutting the company out of the plan. In response, Green Partners said it was shelving the project altogether, rather than moving ahead without Molbak’s as part of the redevelopment.
The real estate group, which is associated with a company that manages investments for Microsoft co-founder Bill Gates, blamed “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.” Green Partners said it had allowed Molbak’s to operate for years without paying rent.
The City Council urged the two sides to negotiate, hoping to revive the project, but apparently talks have broken down.
Woodinville Mayor Mike Millman said Monday that losing Molbak’s was a “blow to Woodinville and a blow to the region.”
“When I found out the news, I was literally sick to my stomach,” Millman said.
After Molbak’s and Green Partners separately informed the city that Molbak’s would no longer be part of the project, a City Council memo described the city’s June agreement with the developer as “effectively null and void.”
“Molbak’s is one of our anchor tenants along with our wine tasting industry in Chateau Ste. Michelle,” Millman said. “It brings people from all over the place.”
Millman said the city has suggested other sites as opportunities for Molbak’s to find a new home. But Kouhia said that would be a multiyear endeavor, if it did happen.
“We don’t have a path to get from where we are right now to where we would be in a new location,” Kouhia said.
On Monday, Kouhia said Molbak’s is “struggling to understand” what went wrong with a plan she called a “commitment to our customers and community.”
A statement from five members of the Molbak family — including 98-year-old Egon Molbak and the company’s current owner, Jens Molbak — described the project’s demise as heartbreaking.
“We know this is incredibly difficult news for our employees and their families and the many other friends of Molbak’s throughout our industry, the Puget Sound, the country and the world,” the Molbak family’s statement said. “Thank you for your place in our family’s business.”
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