THE DALLES — On March 18, the Columbia Gateway Urban Renewal Agency (URA) board heard a proposal from Sunshine Mill owner James Martin and his daughter, Sunshine Mill general manager Natasha Skov, regarding potential plans for building a luxury wine hotel and retreat center at the winery’s downtown The Dalles location.
The proposal began with a brief history of Sunshine Mill, starting with the Martin’s 2004 proposal to the URA to purchase the building through 2020-2024, which brought changes and expanded services due to the pandemic and years after.
The proposal broke down Sunshine Mill’s economic impact on the community, including $4 million of federal funding raised to create the downtown roundabout and cruise ship dock, and earning $100 million in revenue. The presentation highlighted Sunshine Mill spending $15 million with local businesses and that 98% of their employees are considered local.
After discussing current projects, such as expanding onsite wine production and launching their own Sunshine Mill wine label, Skov and Martin presented plans, including concept designs, for the Sunshine Mill Wine Hotel and Retreat center, which would be comprised of 80 rooms built inside the concrete silos and mill building, along with a rooftop bar and restaurant, spa, pickleball courts and gym, venue rental spaces and private meeting rooms, wine tours and education and artisan market spaces.
During the presentation, Skov discussed work already completed towards the project, including a preliminary architectural design and engineering analysis, and a 2025 feasibility study that was completed by Saddle Peak Hotel Advisors, as well as a proposed development and an estimated breaking ground timeline.
According to the proposal, breaking ground is estimated to begin in 2026, following the finalization of the engineering and architecture, securing building permits and loan finalization. Completion of the project is estimated to be in 2027. “These are very rough timelines based on our best educated guess at this time,” Skov said.
After describing the potential benefits to the community, including drawing an affluent customer base with disposable income and creating luxury accommodations and amenities to be used by both guests and locals, the presentation wrapped up with the initial ask seeking a $250,000 grant to “completely vet engineering and architectural design.”
“We know there will be surprises, but we’re hoping reduce as much as possible through completing architecture and engineering,” Skov said. She noted that after architecture and engineering, the expected project development cost to be around $30 million.
Other asks listed in the presentation include open and honest communication with URA on them supporting the project and “what other flagship projects are a priority for the agency,” and providing the URA with a building and a rooftop tour. Future asks would include Gap financing and Enterprise Zone tax credits.
“We’re a company founded on seven generations in the community that continues to invest in the development, revitalization and beautification of this town and the East Gateway Entrance into downtown The Dalles. We know this is ambitious and crazy, but that’s what we’re good at — making crazy happen,” Skov said.
During the presentation, Board Member Walter Denstedt asked about the building feasibility study performed by Saddle Creek Hotel Advisors and the state and lifespan of the concrete the silos are made out of. Skov noted the concrete analysis was done by Miller Engineering, and Martin stated that through the analysis, the silos were reinforced with more rebar than would be considered normal by today’s standards.
“It’s super, super structural,” Martin said. “It’s built like a dam.”
Other questions asked included marketability, the retreat center, feasibility of banks financing a project such as this one based on uncertainty regarding tariffs, timelines regarding the future request for gap funding, sustaining the level of need for employment in the area, and clarification regarding the request for $250,000 to “vet” the engineering and architectural design.
Skov clarified that the current feasibility study was performed in regards to the structure of building as it is, rather than a study of the project. “It comes down to finalizing a design and it’s going to help us understand what does this actually cost, so that we can go and seek financing and see these different market tax credits and things like that,” she said. “So now it’s diving deeper to try and erase any unknowns that we might have.”
Chris Kraus, owner of Saddle Peak Hotel Advisors, spoke during the meeting, describing the marketability analysis performed by his company.
“There’s a clear need for this [type of property] in the market, because it doesn’t exist,” Kraus said. “It’s already a leisure destination that’s known, certainly regionally, nationally, if not internationally … My research indicates that there is certainly demand for this type of property.”
Regarding financing, Kraus acknowledged unknowns, but noted that similar projects are currently continuing to be financed. “Certainly, we have been in some tumultuous times over the last 12 months. But yes, there are still projects being financed. There is still new construction happening, and we’re seeing more of it in these leisure destinations,” Kraus said.
While no official decision was made at the meeting, the discussion wrapped up with Board Chair Darcy Long advising the presenters the initial ask for $250,000 may not be realistic.
“I’m not speaking for the board, but just based on past decisions that the board has been making, I would say probably the $250 [thousand] ask up front is not your best bet,” she said. “It’s to come up with that first and then ask for the gap funding and other ways we can be creative with you guys to make it happen.
“You guys are a success story, as everyone in this room knows,” Long continued, “but we are trying really hard to make sure that as we wrap down the agency, that we’re putting our money in good places and having good outcomes.”
The March 18 Columbia Gateway Urban Renewal meeting can be viewed on the City of The Dalles YouTube Channel.
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