An investment group affiliated with Spokane developer John Stone has sold partial interests in three Seattle-area assisted-living centers it owns to Seattle-based Merrill Gardens LLC, a big operator of senior-housing communities nationwide.


As part of the transaction, Merrill Gardens has taken over management of the only facility of the three thats already in operation, a 76-unit retirement center called Admiral Heights, says Jim Rivard, of Stone Rivard McGonigle Development LLC (SRM), a Spokane-based development company whose principals are members of the investment group. Merrill also has agreed to manage the second facility, an 81-unit center thats just finishing construction and will open later this month, as well as the third facility, a 150-unit project that will get under way next spring, Rivard says.


Merrill Gardens acquired operating control of the three facilities, plus full ownership of another that wasnt owned by the Spokane-based investment group, in transactions totaling $45 million in value, says Loree Wagner, spokeswoman for Merrill Gardens. Wagner declines to specify the ownership split between the Spokane group and Merrill Gardens in the three facilities they now co-own, but Rivard says Merrill will be the majority owner only of the project thats to get under way next year.


John Stone Development LLC, an affiliate of SRM, developed the Admiral Heights project in West Seattle, which opened in January 2001. SRM is developing the 81-unit project, which also is located in West Seattle.


Construction there began in early 2002 and is expected to be finished at the end of this month.


That project, which now is called Merrill Gardens at West Seattle, is valued at $9 million, Rivard says.


SRM also will develop the third project, located near Seattle Center on Lower Queen Anne Hill.


That project, which is expected to open in 2005, likely will cost more than $15 million, he says.


Rivard says the investment group, which includes Stone, SRMs partners, as well as some additional investors, decided to sell part of its interest in the three properties to Merrill because retirement centers take a great deal of time to manage compared with the apartment buildings and office projects that the company also develops.


Our time is best used to develop and construct, he says.


Plus, having Merrill as an owner-manager of the properties ensures that the Seattle company has a stake in their smooth operation, Rivard says.


We decided if we didnt want to be as involved in asset management, yet we wanted to retain the assets, the best thing we could do would be to bring in an owner-manager. Its kind of the best of both worlds, he says.


SRM and John Stone Development have developed a half-dozen or so senior-living communities over the years, Rivard says.


In addition, the companies are involved in the development of Riverstone, a 74-acre, mixed-use project along the Spokane River in Coeur dAlene.


The transaction with SRM gives Merrill Gardens ownership interest in 15 senior-housing complexes in Washington, and a total of 66 in 14 states, making it the fifth-largest senior-housing operator in the U.S., the company says.


Merrill Gardens entered the Spokane market late last year when it bought the Academy Retirement Community here.