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Blossom Hill project may have a buyer in John Jacobi
John Jacobi, the founder of Windermere Real Estate, has signed a 30-day due diligence contract with Whidbey Island Bank to explore the potential purchase of the unfinished Blossom Hill development in Lynwood Center.
Jacobi has asked Jim Laws, owner/broker of Windermere Bainbridge Island, and Tad Fairbank of Fairbank Construction Company, to evaluate the prospects and determine the resources needed to complete the 16-acre project.
The development, which includes four commercial/residential structures that still need considerable interior and exterior work on them, was stalled about two years ago when the bankrupt City Bank of Lynnwood quit lending money to developer Bill Nelson and his Rich Pass LLC corporation.
Laws said there is a total of about 10,000 square feet of retail space in the four buildings, with 15 condos in the second story of the structures.
Whidbey Island Bank took over the Lynnwood bank’s assets and loans after a FDIC-forced closure, including the Blossom Hill loan. The bank officially became the development’s owner in early April when it paid $10 million for the property at a foreclosure auction.
With Jacobi currently traveling overseas, Laws outlined how the deal came about this week. He said Jacobi, who maintains a residence at Battle Point and often visits Lynwood Center’s businesses, decided completion of the project was in the best interest of islanders and the needs of the historic Lynwood Center.
“John feels strongly that someone local should be the steward of this project,” said Laws, who is serving as Jacobi's agent for the potential deal. “We are considering all possible uses for the property, but ultimately our goal is to do whatever is best for the island and the people who live here.”
After the foreclosure, Laws said he was instructed by Jacobi to “find out what’s going on with the property and let him know.”
Laws met with a banker representing Whidbey Island Bank and did a walk-through of the property.
“That just got us more excited because I think what is sitting there is very well done,” Laws said. “The collaboration between the architect, Charlie Wenzlau, and the builder, Nelson, was great. The challenge was the market, and that will be the challenge for us, too”
Laws said the evaluation will include an economic analysis, a look at potential options, cost, marketability and, finally, whether the project is feasible when all is said and done. He said a purchase price is part of the signed agreement, but he declined to reveal the amount.
“Right now we’re concentrating on what exists,” he said. “It’s an eyesore and it’s been a waste of resources, but it is in good shape. And the bank has had an engineering firm keeping a protective eye on the buildings.”
If Jacobi decides to tackle the project, Laws said, finishing the existing buildings as soon as possible would be the first goal. But the upper property and the existing nearby restaurant would also be part of the deal.
“Nelson’s vision was for a total of 73 modestly dense units on the hillside and we need to study the feasibility of that,” Laws said. “John’s and Bill’s visions about believing in the area, the design and the location have a lot of similarities. It didn’t get finished because of the money and a tough market out there. Of course, we’re aware of that.”
What excites Jacobi, Laws said, is the potential of turning Lynwood Center into a bustling hub on the south end of the island. Projects such as Steve Romein’s renovation of the Lynwood Center building and the success of the Blossom family’s Lynwood Commons have already turned the service center into an island favorite.
“Lynwood Center is very vibrant right now,” Laws said. “Romein and the Blossoms have good developments there and it’s a great place to live. That’s part of the lure.”
Nelson had said in late April that he and his Rich Pass investors were still interested in buying back the project. Laws said he wasn’t aware of other offers, though he knew others were looking into it.
Nelson said Thursday that the 30-day deadline won’t be easy to meet and he hasn’t given up yet.
“I’m one of those guys that grinds it out to the end so we’ll see what happens,” he said. “It’s kind of bittersweet from the standpoint that you work six years on something, taking all the risks, you get caught up a horrible economic tsunami, and then someone else steps in. But I won’t be throwing in the towel early because you never know what will happen.”
Laws said there’s no doubt the situation remains fluid.
“If he proceeds, it would probably would probably be with as much speed as possible,” Laws said. “The bank renewed the permits, so there isn't a permit issue unless John decides to change thinks drastically. As far as changing things, it’s possible. Tad (Fairbank) would be the contractor and he’s looking at all aspects of the development.”
Study findings and recommendations will be reviewed by July 20, said Laws.