After default, Everett Mall looks to rework its loan

By Bill Sheets Herald Writer

EVERETT — The owners of the Everett Mall have defaulted on their $98 million mortgage but are working with their lender to restructure the loan, according to the company.

The mall, hit hard by the recession, is about 18 percent vacant, according to Steadfast Companies of Irvine, Calif., which owns the 677,000-square foot shopping center.

The mall features anchor tenants such as Macy’s, Sears, Regal Cinemas and LA Fitness.

A company spokeswoman did not return phone calls or emails Friday. Lisa Whitney, vice president of Steadfast’s commercial management division, confirmed that the company defaulted on the loan and is working with the lender on restructuring, but offered few details.

Officials with the company’s loan servicer, C-III Asset Management of Irving, Texas, could not be reached for comment on Friday.

Steadfast bought Everett Mall in 2004 for $50.2 million. It spent millions more on remodeling and expansion and refinanced the debt in 2007.

The company owns four other malls, including The Commons in Federal Way. Two of the malls are in California and one is in Oregon, according to the company’s website. It also owns and operates more than 14,000 apartment units in 18 states and three resorts in Mexico.

Even with the Everett Mall’s current vacancy rate, it historically has done well in terms of sales per square foot, said Lanie McMullin, economic development director for the city of Everett.

She said the mall owner’s troubles could be coming from elsewhere in the company.

“The distress that caused this might not be the Everett Mall,” McMullin said.

She said Steadfast might need to recruit tenants more likely to succeed, which could be stores that offer lower-cost items or are targeted toward a younger age group, for example.

She said retailers nationwide are scrambling to meet the challenge of the recession by creating “off-price incarnations” in the mold of Nordstrom’s Rack or gearing items toward different demographics.

“They know full well what they need to do to be successful there,” McMullin said of Steadfast. “It’s just that the whole retail world is on its ear.”

Bill Sheets: 425-339-3439; sheets@heraldnet.com.