Monday, June 18, 2012
Everett Mall's owner faces July 9 foreclosure deadline
EVERETT -- The deed to the Everett Mall could sell to the highest bidder on the county courthouse steps if the mall's owner can't come up with $8 million by July 9.
A notice of foreclosure on the mall was published Monday in The Herald.
In March, Steadfast Commercial Properties defaulted on a $98 million loan for the Everett Mall, which the California-based real estate investment management company bought in 2007. Officials for Steadfast said in mid-March that the company was working with their lender to restructure the loan for Everett Mall.
"We continue in discussions with our (l)ender towards a positive resolution, and as both parties are currently working in good faith towards a positive resolution," Lisa Whitney, vice president of Steadfast Commercial Management, wrote in an email Monday, in response to questions about the foreclosure notice being published.
Whitney described the notice as part of the "standard" process. She said that Steadfast has developed a long-term strategic redevelopment plan for Everett Mall. But Whitney declined to disclose details about Steadfast's discussion with its lender.
Acting as the trustee of the loan, Seattle attorney David Neu, with K&L Gates, put in the notice, which states the deed to the mall will be sold to the highest bidder at 10 a.m. July 20, at the Snohomish County Courthouse. Neu could not be reached for comment.
As of April 18, Steadfast was $5.8 million behind on interest, late fees and attorney's fees. By July 9, the company will need to come up with more than $8 million to pay off past due interest, late charges and fees to avoid foreclosure.
Steadfast bought the Everett Mall for $50.2 million in 2004. The company invested several million dollars to remodel and expand the mall. Steadfast refinanced its debt in 2007 through Royal Bank of Canada. The recession began the following year, hitting hard both retail and real estate.
"Everett Mall has not been immune to the proliferation of retailer downsizing, bankruptcies and the subsequent vacancies that have occurred industry wide over the past 36-plus months," Whitney said.
In March, Everett Mall had a vacancy rate of about 18 percent. The shopping center has lost two anchor stores to bankruptcy in recent years, including low-cost clothier Steve & Barry's and book seller Borders. Major occupants include Sears, Macy's and Old Navy. Regal Cinema, TJ Maxx and LA Fitness also are tenants.
"Day to day, it is business as usual at Everett Mall for both our customers and retailers," Whitney said.
Steadfast isn't the only mall owner to be affected by the economic downturn. General Growth Properties, an owner of Alderwood mall, filed for bankruptcy protection in 2009. General Growth had 200 mall properties at the time. General Growth's financial woes haven't hurt Alderwood, which since 2009 has added stores like Forever 21 and American Girl. A new Lego store opens at Alderwood this weekend.