“It was for retirement, for financial security for my wife and I,” Mike Coombs said. “It didn’t turn out that way.”
The Coombs put in $300,000 of their own money and borrowed more than $1 million more to build the building, which at 7,350 square feet could house several businesses.
Mike Coombs owned an auto dealership and wanted to rent out space for auto repair shops. He felt like he knew the business and knew the needs of his tenants.
But he couldn’t have guessed that the market was about to fall apart.
The building was finished in September 2008, with construction taking several months longer than originally expected. By then, Wall Street crashed, national financial institutions like Lehman Brothers and Bear Stearns folded, and money began to vanish from Americans’ 401(k) accounts.
In that climate, no one wanted to rent space in the Coombs’ new building.
“I always think it would have been better if I had finished it earlier, but who knows?” Mike Coombs said. “Maybe not.”
Suddenly, the Coombs family faced hefty loan payments without any rental income, and with little prospect of things changing soon.
If it wasn’t for the couple’s perseverance — and a little trust from their bank, Prime Pacific — they would have lost everything, another victim of the recession.
The couple did consider walking away and never seeing their money again. But they kept at it, kept plugging away, hoping to attract tenants.
Coombs didn’t have money for landscaping, so he and his son, Timothy, did the weeding and planting.
“We weren’t sure what was going to happen,” said Timothy Coombs, who is now a senior majoring in business at the University of Washington. “There was a lot of praying.”
Coombs worked with Lynnwood-based Prime Pacific to keep the property. Coombs said the bank was forgiving at times and stern at times.
The couple invited their loan officer to tour the property. Coombs praised his former loan officer for being an advocate for the family.
“As the eyes of the bank he came up and visited the property several times,” Mike Coombs said.
After the visits, the bank lowered the interest rate and allowed the family only to make interest-only payments for a time.
“At one time, they said, ‘Make what you can make and that’s what we did,’” Coombs said.
Prime Pacific president Glenn Deutsch said it was a difficult time for everyone. His bank felt it was important to work with struggling businesses — sometimes to its own detriment.
“As a community bank, if our customer is willing to try to make a go of whatever they’ve got going, it is our job — or at least I see it as our job — to try to work with them the best we can,” Deutsch said. “That can involve maybe giving them the ability to skip a couple of payments or maybe it’s a re-amortization of their loan.”
In Deutsch’s office are books about the 2008 collapse. He hasn’t read many of them, because, as he said, he lived through it.
It was a troublesome time for all community banks. Prime Pacific specializes in commercial real estate and commercial and industrial lending, loaning businesses money for a new pieces of equipment or machinery.
About 10 years ago, Prime Pacific followed many other banks by putting money into acquisition and development loans.
“We actually didn’t get into development loans until about 2004,” Deutsch said. “We were late into the game, which was a good thing, and we were out of the game a lot faster than others by 2007.”
After the economy faltered, Prime Pacific became a “collection agency” for four years, Deutsch said.
Prime Pacific couldn’t make any new loans, because there was no loan demand, he said. During that time, the bank worked with several businesses like Coombs.
Prime Pacific suffered through several years of losses due to the recession. In 2013, the bank finally reported a profit, Deutsch said.
While things are better for the bank, it’s also better for many businesses.
For Coombs, the recession meant months of tough times. His wife is a teacher and he had taught earlier in his working life, and continues as a substitute teacher. Friends who were teachers mistakenly thought they had lost the property.
But they attracted their first tenant in November 2010, nearly a year after the county gave the final OK to move into the property.
“They came in and I gave them two months free rent to move in there,” Coombs said. “It was the start of a little fire that kept things going.”
Now the building is fully occupied. Still, Mike Coombs said it was several years of anxiety.
“Now we can see the light at the end of the tunnel,” Mike Coombs said. “For a while there, that light was really small.”