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Real Estate Editor
July 11, 2019
Last September, about 10 acres for what was then called Woodinville Wine Village — previously Woodinville Village — sold for just over $16 million. The DJC and others mistakenly reported that all the roughly 20 acres for the planned project had sold. Oops.
The seller was an LLC associated with Legacy Companies of Bellevue, which acquired the land from a prior owner, just before foreclosure, in 2015. The buyer was Wood Mountain LLC, an investor group associated with Windward Real Estate Services of Kirkland.
Now there's been a second sale between the same two parties, also for just over $16 million, for about 11 acres — i.e., the second half of the site. The deal was worth about $33 per square foot for the land, about the same as last fall's transaction. The planned two-stage closing now totals about $32.2 million, as Windward's Jim Tosti explains.
Also, “The whole project has been renamed.” The new moniker is Farmstead, which is meant to evoke organic thoughts of grapes, fermentation and all things authentic, locally sourced and artisanal.
As of last fall, the idea was for Windward and Backen & Gillam Architects of St. Helena, California, to create a new master plan at and near 14421 Redmond-Woodinville Road, east of the Sammamish River. (Jensen Fey Architects is the local architect of record.) “They've designed every major winery in the Napa area,” says Tosti of B&G.
A prior master plan from before the recession was close to expiration, and Windward began briefing the city last year on the new plan. It was expected that, if the new plan was approved, Wood Mountain would later sell the entitled components to builders — and/or partner with them. The process is now underway.
The new B&G plan includes a hotel with spa, retail, restaurant and commercial space, plus apartments and condos — all themed around wine. (Chateau Ste. Michelle Winery is directly west across the river, among several other wineries in the area.) About 20 buildings are planned in what will likely be a three-phase project over several years.
Concurrent with this month's sale, the old master plan was officially terminated among several parties including the city of Woodinville. The city granted a mitigated SEPA determination of non-significance for the new plan last fall.
Recent city filings indicate that the four-story, 150-room hotel will be built first, after it sells to a Woodinville Hotel Partners LLC, which includes Vector Development and family owners of Halvorson Construction. A new 67-foot height limit is now being considered for approval. The hotel, with spa and conference center, would occupy about 1.8 acres of the overall site. It'll have two levels of underground parking. It's now called The Vines Hotel & Spa.
“We'll be closing on the land sometime this year,” says Tyler Litzenberger of Vector. For a construction start date, “I'd probably target next spring.” Halvorson won't necessarily be the general contractor. “That's still up in the air.” He, the Halvorsons, and partners are currently securing the debt and equity financing — spreading around the risk and reward.
“The project is entitled,” says Litzenberger, but he can only speak to The Vines.
For Farmstead, says Tosti, “We are permitted to anything we want to do — except the residential.” There, Wood Mountain is asking for more residential units in what the city calls its Tourist Business Zone, which will require a few more months and meetings with the Woodinville planning commission. Tosti expects that process to conclude this fall. Already compared to the old plan, “They doubled our density.”
Thus, Farmstead will likely have 425 or more units, with a mix of condos and apartments. For the latter, “There a couple of apartment sites for which we already have buyers lined up.” Tosti is confident about the residential component. “From what we've seen, the demand is outstripping the supply.”
But Phase I of Farmstead will be the hotel and, under separate future ownership, eight retail/commercial buildings totaling about 100,000 square feet. (CBRE's Blake Bishop is leasing the space.) “That's the real selling point,” says Tosti. Build the wine tourist attractions first, ideally beginning this fall or winter, then the residential units will follow in Phase II.
“We're still negotiating” for a general contractor, says Tosti. The retail, with shared underground parking, should take about 18 months to complete.
On which subject: No surface parking! Tosti foresees at least 1,200 underground parking stalls. “If you look at it” — meaning the renderings of the future, finished Farmstead — “there's no parking on the site.” It'll all be hidden from view, with about 70% of the site being open space among the various buildings. All very Instagram-worthy for your wedding or catered corporate event.
Tosti thinks the Phase I retail and hotel will start near the same time. After the Phase II residential, with more retail, Phase III will round out the project, which could take around five years to complete.
Current investors in Wood Mountain are “mainly local,” says Tosti; and some will likely buy into the individual new LLCs expected to acquire various components of the project before construction.
Tosti's interest in the site goes back to the old master plan by MJR Development of Kirkland, which he watched from afar. When MJR's lender stepped in to foreclose on the recession-plagued project, “We looked at it just as Union Bank took it back from MJR. But Legacy was able to purchase it instead of us.” Friendly talks with Legacy began a few years ago, leading to the two recent sales.
In the end, Farmstead should have around 300,000 square feet of retail, commercial and restaurant space. A small grocery will likely be included in that sum, as will about 60,000 square feet of offices and storage (possibly meaning wine storage). New roads will be laced through Farmstead, which will be east of the 50-year-old Villas apartments, which face the Sammamish River and trail.
The Farmstead site extends south from Northeast 145th Street to the Plants Northwest nursery, wrapping around the existing and separately owned Commons/Purple Cafe building (aka Hollywood Vineyards Center). Also unaffected is the separately owned Hollywood Schoolhouse, a popular wedding/events space that dates to 1912. (Hollywood is an old neighborhood within Woodinville.)
Meanwhile, Jensen Fey's design for The Vines is fairly well dialed in. A recent note to the city from Vector states, “We've spent considerable time and resources redesigning the hotel to make it less ‘Redmondy' and more ‘Whistlery.'”
Or perhaps we should say, more Farmsteady.
Got a tip? Contact DJC real estate reporter Brian Miller at firstname.lastname@example.org or call him at (206) 219-6517.