EVERETT — Local boosters took in the sweeping rooftop views and snapped selfies Wednesday during an open house at Potala Place, a key piece of downtown Everett’s effort to become more upscale.
The event-goers rapped their knuckles on the quartz countertops in the model apartments and checked out the vintage arcade games in the community room, where servers offered up mixed drinks made with locally distilled liquor.
The building and retail managers talked about plans for ground-floor retail, which will be anchored by a year-round farmers market and “farm-to-fork” restaurant.
“I just want to see it succeed,” said Jeannie Sears, who owns a home interiors boutique a few blocks away.
Downtown Everett is shaking off its gritty, hard-luck reputation. “It’s on the cusp,” she said. “Places like this will help.”
One man was missing at Wednesday’s soft opening, the man who made it a reality, Lobsang Dargey.
The Everett-based developer has put tens of millions of dollars into new construction and renovations in the downtown. Much of Potala Place, his latest project, was financed by foreign investors through a federal program — called the EB-5 program — that offers a shortcut to a green card in return for job-creating investments in the U.S.
But Dargey allegedly defrauded foreign investors out of millions, according to the U.S. Securities and Exchange Commission.
The agency filed a lawsuit against him in late August for securities fraud in U.S. District Court for Western Washington, and the FBI is investigating the Tibetan-born developer, as well.
SEC attorneys have all but called Dargey’s developments a Ponzi scheme. “It increasingly appears that Defendants raised EB-5 funds for a particular project, misappropriated and misused much of the funds raised, and then started new projects to raise new EB-5 investor funds in order to cover the gap in funds” from earlier misuse, SEC attorney Bernard Smyth said in a motion filed late last month.
The SEC’s lawsuit has stopped work at Potala Tower, a would-be 40-story skyscraper in Seattle. Instead, it is only a 60-foot hole in the ground, 20 feet shy of the planned depth.
The court has frozen the assets of Dargey and his company, Path America. That has stopped work at other development projects in Seattle, Shoreline and Kirkland.
In Everett, construction is almost complete at Potala Place, which has enough money on hand to finish. The six-story building fills one block of Grand Avenue between Hewitt Avenue and Wall Street.
Tenant improvements should be finished by Nov. 15, building manager Bill Crosthwait said.
He works for Allied Residential, which was hired by Dargey to manage the apartment building.
Since opening for leases in August, it has leased 79 apartments; 61 are occupied, he said.
The pace hasn’t slowed since the fraud allegations against Dargey came out, he said. “We’ve been leasing five or seven apartments a week.”
Prices range from $1,025 for a studio to $2,275 for a two-bedroom corner apartment.
“We’re in the slow season, and people are OK with the pricing,” he said. “I’m shocked.”
Similarly, Tom French, who manages the retail space, hasn’t seen interest fall off. He is with Farm and Market, which is leasing and managing the retail space.
“If anything, I’d say we got more calls” since Dargey landed on the front page, he said.
He expects about 12 retailers will occupy the ground floor.
The anchor tenant, the farmers market and restaurant, are slated to open in mid-December, he said.
Facing the market on the east side of Grand Avenue are remnants of what the downtown used to be — Everett Hydraulics, a machine shop, and Aalbu Brothers Inc., a welding and fabrication shop.
Ryan Crowther organized Wednesday’s event for Engage Everett, a civic booster group.
“There was disappointment” when he learned Dargey is accused of securities fraud, he said.
“But at the end of the day, I know we have a beautiful building in downtown Everett that is part of the change,” he said.
Dan Catchpole: 425-339-3454; dcatchpole@heraldnet.com; Twitter: @dcatchpole.
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