Kirkland Closed Its Station Area to New Townhomes. Rose85 Is the One Project That Got Through.

The Rose Hill Village shopping center at 12631 NE 85th Street has been mostly vacant since a 2018 fire damaged or destroyed seven businesses there. On September 14, 2026, the City of Kirkland issued a demolition permit for the center's building, which dates to around 1960, and for its small coffee stand. King County recorded the sale of the 3.42-acre site the next day. National homebuilder Taylor Morrison paid $27 million and plans a townhome community called Rose85, with completion targeted for late 2027, Connect CRE reported.

Four months before that sale, the Kirkland City Council banned new townhomes across nearly all of the NE 85th Street Station Area. Rose85 can still be built because of an exemption written for it. That makes it very likely the last new for-sale townhome community in the core of the station area. It is also scheduled to finish about two years before the bus line the whole district was planned around.

The deadline that keeps the project legal

Ordinance O-4936 took effect May 16, 2026. It bans low-density housing types for new projects in the station area. One exception covers a small group of parcels east of 124th Avenue NE that have lower height limits. The ordinance also lets existing townhome proposals be completed.

There are conditions attached. A project with final Design Review Board approval keeps its right to build townhomes only if it files a fully complete building permit application within nine months of the effective date, and that application has to be consistent with the approved proposal. The nine months run out in early 2027. Cherish Kirkland's September report says city staff told the council the exemption was intended for the Rose Hill townhome development. In the outlet's reading, a substantially redesigned project would fall under the ban.

That matters if you're on an interest list. Taylor Morrison told the Puget Sound Business Journal that details like home counts and prices are still being refined, according to Cherish Kirkland. Prices can move. The overall shape of the project has much less room to change, because the approved 89-townhome plan is what keeps it legal. As of the city's permit record checked October 12, 2026, the demolition permit had been issued, the site development permit was listed as "Ready to Issue," and the residential building permits were "In Review." So the site is permitted for demolition and site prep. The record does not show that construction of the homes themselves has started.

How 600 apartments turned into 89 townhomes

The site's history explains why the council acted. MainStreet Property Group bought the property in early 2022 for $20.5 million. It announced two office buildings totaling 575,000 square feet, described at the time as fully funded and expected to open by 2025. Then the office market collapsed and none of it was built. In 2025, MainStreet won design review approval for 89 townhomes instead. The Puget Sound Business Journal also noted the earlier office plan in its coverage of the sale.

According to Cherish Kirkland, earlier planning conversations about the property had considered an apartment project of up to 600 units. The council's case for the ban rested on that gap. Deputy Mayor Neal Black asked "if not here, then where," arguing that once a parcel redevelops as townhomes, its capacity for more housing is gone for a generation or two. Councilmember Jay Arnold counted the cost of this one site at 511 homes "that will need to be placed elsewhere in our city." Mayor Kelli Curtis warned that falling short of the station area's housing goals could make regional agencies less generous with transportation money.

The same report says the votes on the details went like this:

1. A broader amendment keeping townhomes legal on about 44% of the station area's land failed 4-3.
2. A narrower amendment keeping them on roughly nine edge parcels next to single-family streets, about 3.7% of the station area, passed 5-2.
3. A proposed 2030 sunset on the ban failed 0-7.
4. The ordinance itself passed 7-0 on May 5, 2026.

There was a real case against the ban. Councilmember Jon Pascal passed along developers' view that each new rule reads as another barrier. Councilmember John Tymczyszyn called it counterintuitive to prohibit housing in order to create housing. He noted that the station area's original vision assumed thousands of office workers who, after the shift to remote work, aren't coming. The Planning Commission preferred incentives to a prohibition. Supporters of the ban acknowledged that townhomes are ownership housing, which is scarce in Kirkland. The majority's answer was that the incentives already existed and weren't working, and that townhomes were the only housing type actually moving forward in the station area.

For a buyer, here's what that adds up to. Future projects in the heart of the station area have to be denser: stacked flats, apartments and mixed-use buildings. A ground-to-roof townhome with its own garage, built new and a few minutes from the I-405 station, is now a category the city has closed except on its edges.

Two years between move-in and the buses

The station is the reason this land carries the zoning it does, and its schedule doesn't line up with Rose85's.

The city's station area page still says the BRT stop is "anticipated to be operational by 2027." Sound Transit's S2 timeline says 2029, and Sound Transit is the agency running the service. Sound Transit's November 2025 program update gave the same 2028 and 2029 dates, and the research turned up no later delay announcement. If those dates hold, someone who closes on a Rose85 home in late 2027 will own it for about two years before S2 service starts. WSDOT's project page also lists ongoing lane reductions and nighttime closures while the interchange is finished.

What a $1 million starting price is up against this fall

The builder's current Rose85 page lists homes from $1 million, with plans of 1,357 to 2,689 square feet, three to four bedrooms and one- or two-car garages. That figure comes from an undated web page, and the builder has said pricing is still being refined. Its Senderos townhome community in Kingsgate shows starting prices from $999,999 to $1,099,999 for plans of 2,002 to 2,202 square feet.

Here's how that compares with September 2026 sales from the Northwest Multiple Listing Service:

Rose85's starting price is about $425,000 under the September Eastside single-family median, as reported by 425 Business. That's new fee-simple ownership in a zone where the city has now capped that product by law. In the NWMLS October 6 release, the 30-year fixed rate averaged 7.28% in the first week of October, per Freddie Mac. For every 100 new listings in September, buyers went under contract on about 62 homes, down from about 80 a year earlier. Steven Bourassa of the Washington Center for Real Estate Research told NWMLS that prices are showing "downward stickiness," because sellers "may have the flexibility to wait rather than accept a lower price."

So a buyer weighing Rose85 is comparing a scarce, legally limited product against a resale market with more choices than at any September since 2014. NWMLS doesn't publish a separate townhome-only series, and no local data yet shows the station area raising nearby home prices. Any premium for being near the station is still an expectation, and nothing has tested it yet.

A timeline if Rose85 is on your list

• Now through early 2027: Watch the permit record for the building permit application. Filing it on time, consistent with the approved plan, is what keeps the townhome rights.
• Through 2027: Expect lane reductions and nighttime closures on the interchange until WSDOT finishes, with new interchange traffic opening in early 2027.
• Late 2027: The builder's target for completion. Ask which floor plans and garage configurations are actually being released, since the range runs from 1,357 to 2,689 square feet.
• 2028 to 2029: S1 and then S2 service starts. For your commute, plan on 2029 for the NE 85th station.
• Alongside all of it: Compare finished Rose85 prices against Eastside resale at the same time. With inventory where it is this fall, resale comparables are easy to find.

Quick answers

Can any other new townhomes be built in the station area? Yes, on a narrow slice. Townhomes remain allowed on a small number of lower-height parcels east of 124th Avenue NE, about nine parcels or roughly 3.7% of the station area by Cherish Kirkland's count.

Did the ordinance change anything else? It extended the affordable housing "pioneer" provision cutoff to 2030. It also allows development agreements to consider building heights and uses that aren't usually permitted in the station area.

Are other large residential projects lined up near the station? The city's own economic development page says opportunities for specific redevelopment sites in the station area remain limited. A March 2026 council memo identified Salt House Church's 1.9 acres at 11906 and 11920 NE 80th Street as a possible affordable housing site. It did not include a project proposal or a unit count.

If you're weighing a Rose85 interest list against townhomes and single-family resale elsewhere in Kirkland, Tarek Moghrabi can put current comparables next to the station schedule and the permit timeline so you can see how the dates line up. Let's find a time to chat.

This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.