Kenwood Investments to acquire Cornerstone Gardens

Continuing its expansion in Sonoma Valley, Kenwood Investments announced a deal to acquire Cornerstone Sonoma at a main gateway to the North Bay’s Wine Country.

The company plans to maintain the Arnold Drive complex of gardens and retail shops, with an eye toward attracting small, artisan merchants like those at San Francisco’s Ferry Building or Napa’s Oxbow Market that would appeal to both tourists and locals alike, said Bill Hooper, Kenwood Investments’ president.

“It will be small, boutique merchants that you would drive out of your way to go to,” Hooper said Tuesday.

Financial terms were not disclosed. A Canadian company, GenerX Real Estate Services, had been in the process of buying Cornerstone earlier this year, but Hooper said that deal fell through.

The 36-acre acquisition, which includes the adjacent Wagner Road vineyards, adds to the growing stable of Sonoma Valley properties owned by Kenwood Investments founder Darius Anderson. His interests include the Ramekins Culinary School, Events and Inn; the General’s Daughter corporate events and weddings venue; and Sonoma Media Investments, which owns The Press Democrat, The Petaluma Argus-Courier, The Sonoma Index-Tribune, The North Bay Business Journal and Sonoma magazine.

Cornerstone is a novel concept that some say has failed to live up to its potential as a destination spot, despite drawing more than 100,000 visitors last year and being named one of the top 10 Western gardens by Sunset magazine in 2009. The property features more than 20 walk-through garden installations that change and are updated by visiting landscape artists, as well as a small number of retail shops, two art galleries, a restaurant and three wineries.

Tom Rouse, a former mayor of Sonoma, said Cornerstone has been “flailing for years, quite honestly.” He praised Anderson and his investment group for stepping in to purchase the property.

“They have the resources to acquire properties that fit strategically with their portfolio. I, for one, don’t see anything wrong with that,” he said.

Cornerstone Gardens is situated near the intersection of Highways 116 and 121, which is both a commuter hub and a thoroughfare for Wine Country visitors.

Chris Hougie, who along with his wife, Teresa Ruffo, developed Cornerstone Gardens in 2004, on Tuesday said he was “particularly pleased” to sell the property to a local buyer. He said Anderson and his wife, Sarah, share his vision of what Cornerstone can become.

“They’ll be able to make it a destination where it will become a part of people’s thinking when they come to Wine Country,” Hougie said.

Anderson’s critics, however, say his company’s growth is coming at the expense of local concerns, such as increased traffic in the Sonoma Valley region. His plans for a ?59-room hotel in the Sonoma Plaza area sparked a ballot measure in 2013 seeking to cap the size of hotels in the city. The measure was defeated, but bad feelings still linger.

Bill Dardon, a Sonoma real estate agent and president of the board of directors for the city’s Tuesday Night Farmers Market, said Anderson and his investors are “going to change the footprint of this - I still call it a town. They may not do it right away, but it’s going to impact us a lot.”

Hooper acknowledged that Kenwood would not have been interested in Cornerstone were it not for the fact the site hosts events, including weddings.

“We very much believe in the future of the tourism business in Sonoma, but at the same time, just like Ramekins, our hotel and now with Cornerstone, we also want them to serve the local community,” said Hooper, who also serves as chief operating officer for Sonoma Media Investments.

Rouse, who opposed the ballot measure seeking a hotel cap in Sonoma as a member of the City Council, said Anderson’s holdings still don’t compare with those owned by some of Sonoma’s older and more established families, including those in the wine industry.

“If you look at the asset sheets of some of the old families, you’ll find Kenwood holdings are not more significant than others,” he said. “Darius’ group just happens to be in the limelight right now.”

Valerie Lara, manager of Eurasian Interiors Chinese Antique Furniture at Cornerstone, said she welcomed Kenwood’s interest in the property. She hopes the company improves the signs outside Cornerstone so that passing motorists have a better idea of what’s there.

“I’m excited about it,” she said Tuesday. “It’s a local guy. It’s a local company. They know Sonoma quite well. I think it’s a perfect fit.”

Kenwood Investments formed a new company, Kenwood Cornerstone, LLC, to acquire and operate Cornerstone. The LLC’s members include Anderson, Hooper and Gary Nelson, founder of Nelson Staffing.

Hooper said Cornerstone’s 12 employees will be retained. He said Kenwood does not currently have plans to acquire other Sonoma Valley properties.

You can reach Staff Writer Derek Moore at 521-5336 or derek.moore@pressdemocrat.com. On Twitter @deadlinederek.