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Woodinville redevelopment with Molbak’s may be dying on the vine

A massive, long-awaited redevelopment project involving the well-known Woodinville garden center Molbak’s Garden + Home may be dying on the vine, which would be a blow to the Seattle suburb’s vision for its growing downtown.

On Tuesday, Molbak’s said it was suddenly being cut out of the Gardens District project, accusing a development company with ties to Bill Gates of removing the store from a 19-acre plan to build a new garden center, plus housing, restaurants and other amenities.

In response, a spokesperson for the development company said Tuesday night that it was shelving the Gardens District project entirely rather than forcing out Molbak’s. Meanwhile, the Woodinville City Council has decided to urge negotiations between the parties rather than take immediate action.

A family-owned store that opened 67 years ago in Woodinville, northeast of Lake Washington, Molbak’s has become a regional shopping destination over the decades. In an interview, CEO Julie Kouhia said she and the Molbak family were shocked and devastated earlier this month when they received notice that Green Partners, LLC, was axing the store’s future lease and role in the multiphase project without explaining why.

As recently as June, Molbak’s and Green Partners worked together to secure City Council approval for the project at, and surrounding the site of, the existing garden center, Kouhia said. Molbak’s wants to know what went wrong and how to set things right, she said.

“There’s not a justification we can find,” Kouhia said. “There hasn’t been a productive back-and-forth yet. … But we want to move forward. We’re not trying to throw anybody under the bus.”

The city’s June development agreement with Green Partners requires the project’s first phase to include a new Molbak’s as a public benefit. But Molbak’s and the Green Partners separately informed the city Monday that a new garden center would no longer be included in the project’s first phase, if at all, a council memo said Tuesday. The memo described the development agreement as now “effectively null and void.”

In a meeting Tuesday night, council members decided to encourage talks between Molbak’s and Green Partners rather than immediately repeal the development agreement.

“I’d like to see how we can facilitate a path where Molbak’s remains in this project,” Mayor Mike Millman said in an interview before the meeting, calling the garden center one of Woodinville’s top two attractions, along with the city’s wineries.

On Tuesday, Molbak’s made a point to describe Green Partners as associated with Cascade Investment, LLC, and to describe Cascade Investment as associated with Gates, the Microsoft co-founder. Jens Molbak, who owns Molbak’s, has a “small, silent, minority interest” in Green Partners, Kouhia said. State records show that Green Partners is governed by Mount Tolt Holdings, LLC, which in turn is governed by Michael Larson. Larson is the chief investment officer at Cascade Asset Management Company, which manages investments for Gates.

An emailed statement Tuesday night from a Cascade spokesperson said the company was surprised to see Molbak’s allege mistreatment.

“We have no plans to remove Molbak’s Garden + Home from its current location,” the statement said. “We’ve been partners with Jens Molbak since 2008 and allowed Molbak’s to operate for years with significantly below-market rent. Moreover, Molbak’s has years remaining on its lease.”

What’s actually happening is that Cascade is halting the project, the statement added, without sharing its reasons for the move.

“While Cascade is no longer planning to develop the Gardens District, we had been negotiating with Mr. Molbak toward the inclusion of his family business as a key feature of a possible future Gardens District,” the statement said.

“However, Mr. Molbak upended the discussions even in the face of Cascade’s offer of concessions including free rent. We expect that the Gardens District will serve the needs of Woodinville, regardless of what Molbak’s decides is in its interest.”

Molbak’s and Woodinville officials didn’t immediately comment on the Cascade statement Wednesday.

Molbak’s was started by Egon and Laina Molbak, immigrants from Denmark who arrived in Woodinville in 1956. Planning for the Gardens District began about 15 years ago when Green Partners bought the land where Molbak’s is located from the Molbak family, Kouhia said.

The 1,200-apartment project has been a key part of Woodinville’s effort to create a vibrant, walkable downtown. It’s one of several projects in the pipeline that together could add thousands of housing units in the once-sleepy suburb.

A research and design team from the University of Washington has been involved, with the aim of making the neighborhood ecologically, economically and socially sustainable, Kouhia said.

In June, the council agreed to give Green Partners a height variance and development rights. In return, Green Partners agreed to provide Woodinville with various public benefits, including infrastructure upgrades around the site, about $4 million in fees to support parks and trails, and about 130 affordable apartments, plus the new Molbak’s, Millman said.

“This is an incredibly hot issue for people,” Councilmember Rachel Best-Campbell said during Tuesday night’s meeting, because “losing Molbak’s would be losing the heart” of Woodinville.

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