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Trillium foreclosure woes put crimp in Freeland sewer plans

Financial woes surrounding the former Trillium Woods property north of Freeland have stretched down the hill to the Freeland Water and Sewer District.

Proponents of a sewer system for Freeland have been negotiating with the owner of the property since last fall to buy 50 acres for a future sewer outfall.

“We’re in slow mode right now,” Chet Ross, president of the Greater Freeland Chamber of Commerce and a booster of sewers, said Thursday. “We were making progress until the foreclosure cloud appeared.”

Notices of foreclosure and trustee sale were posted

June 25 at the entrance to Estates at Whidbey, formerly Trillium Woods.

The notices said the owner of the 750-acre property, Dogwood Whidbey Development, created by Jesse Molnick of Arlington and managed by his Molnick Group, is in default on two loans totaling $4.9 million from Shoreline Bank.

The notices said the property would be sold at auction in Coupeville on Oct. 9.

Molnick said at the time that he had expected the notices, and that he was negotiating with the bank for a more favorable loan structure.

“We don’t know what the bank’s going to do,” Molnick said then. “I don’t believe the bank wants the property back, but it’s tough to say.”

Molnick could not be reached for comment on Friday, but Ross said he knew of no change in Molnick’s situation.

The property is west of Highway 525 about a mile north of Mutiny Bay Road.

Ross said sewer proponents, working through the Freeland Water and Sewer District, hope to buy 50 acres of the southeast portion of the property, where there was once a gravel pit.

He said planners envision a sewer system that spreads treated sewerage on land, rather than dumping it in Holmes Harbor or Mutiny Bay.

“Right now, Molnick is still the owner of the property,” Ross said. “If it goes through foreclosure, I guess we’ll be dealing with the bank.”

He declined to say how much sewer proponents are prepared to spend on land for an outfall, but said it would be financed with a $1 million Centennial Clean Water Fund grant received from the state last year.

Meanwhile, proponents continue to search for money for sewers in Freeland.

Backers earlier had applied for $5.6 million in federal stimulus money for phase one of the five-phase project, but were passed over this year in the highly-competitive process.

Ross said proponents are looking toward submitting another application in September, when the state’s funding period opens for 2011.

“It’s a never-ending battle,” he said. “We fit so many programs, but they’re either funded by the feds or the state, and nobody has any money right now.”

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