The O’Brien Auto Group will soon demolish the old Graham Steel Corporation building and start construction on a new 125,000-square-foot dealership and service facility for Toyota of Kirkland.

The auto group made the announcement during the City of Kirkland’s Totem Lake Symposium at Studio East on Friday morning. The company currently uses the Graham Steel property – located at the intersection of 132nd Avenue Northeast and Northeast 124th Street – to store a combination of used and new cars.

O’Brien Auto Group has also secured a Volkswagen dealership for Kirkland that will be located in the existing Toyota building after remodeling. The existing building is located at 12612 N.E. 124th St. in Kirkland.

City officials are enthusiastic about the new building and the additional car dealership in the Totem Lake Business District.

“It will bring in more sales tax and more customers,” said Councilman Toby Nixon.

Councilwoman Amy Walen said the auto dealers in the surrounding area “have good relationships with each other” and that having the synergy of multiple dealerships makes Kirkland a regional draw for customers interested in buying new cars.

“When people go car shopping, they drive several products all around the area. And for convenience, they visit restaurants and boost the economy in other ways,” noted Walen.

Michael O’Brien, leader of the O’Brien group, said construction on the new $16 million building will begin in March or April 2013 and take up to 16 months to finish.

“My preference would have been to buy the Totem Lake Malls and turn it into a series of car dealerships and other restaurants,” O’Brien said of his effort during the last 10 years. “But the city doesn’t want that.”

O’Brien did say that the city was “extremely easy to work with” during the permit process for the new Toyota dealership location.

He expects the massive building to employ an additional 30 to 50 people on top of the 130 employees at the Toyota dealership. When the Volkswagen dealership moves into the remodeled old Toyota dealership building, about 100 jobs for skilled technicians and sales people will be available.

“That’s about 150 new jobs to the community,” said O’Brien.

Customers can expect a full-time car wash on site and better amenities such as faster internet. There will also be a lot more space – 50 cars in the service drive versus nine at the old location.

O’Brien said there will be a Volkswagen dealership sales location in Totem Lake Malls come December or January. Renovation of the old Toyota dealership location will begin after the 125,000-square-foot building is finished. Remodeling, which will only take up to 45 days, will cost a couple million dollars.