1. Prepare three 8-inch cake pans with parchment paper circles in the bottom and grease the sides. Preheat oven to 350°F (176°C).
2. In a large mixing bowl, cream the butter and sugar together until light in color and fluffy, about 3-4 minutes. Do not skimp on the creaming time.
3. Add the molasses and vanilla extract and mix until well combined, scraping down the sides of the bowl as needed to make sure the molasses gets combined.
4. Add the eggs one at a time, mixing until mostly combined after each. Scrape down the sides of the bowl as needed to be sure all ingredients are well incorporated.
5. Combine dry ingredients in a separate bowl, then combine the milk and water in a small measuring cup.
6. Add half of the dry ingredients to the batter and mix until well combined. Add the milk mixture and mix until well combined. Batter may look a little curdled. Add the remaining dry ingredients and mix until well combined. Batter should smooth out and not look curdled anymore. Scrape down the sides of the bowl as needed to be sure all ingredients are well incorporated.
7. Divide the batter evenly between the cake pans and bake for about 24-27 minutes, or until a toothpick comes out with a few crumbs.
8. Remove the cakes from the oven and allow to cool for about 2-3 minutes, then remove to cooling racks to cool completely.

TO MAKE THE FROSTING:

9. Add the cream cheese and butter to a large mixer bowl and beat until well combined.
10. Slowly add about half of the powdered sugar and beat until smooth.
11. Add the vanilla extract, cinnamon and nutmeg and beat until smooth.
12. Add the remaining powdered sugar and beat until smooth.

TO ASSEMBLE THE CAKE:

13. Use a large serrated knife to remove the domes from the top of the cakes.
14. Place the first layer of cake on your serving plate or a cardboard cake circle. Spread about 1 cup of frosting evenly onto the cake layer.
15. Add the second layer of cake and another cup of frosting.
16. Add the final layer of cake on top.
17. Frost the outside of the cake with the remaining frosting, then use the tip of a 9 inch offset spatula to create stripes on the sides of the cake.
18. Use the remaining frosting to pipe dollops around the top of the cake. I used Ateco tip 808.
19. Sprinkle the top of the cake with nutmeg and pearl sprinkles. Add some gingerbread men and rosemary, if desired.
20. Refrigerate cake until ready to serve. Best served at room temperature. Cake is best when well covered for 2-3 days.