Receiver to take over Everett Mall

By KATHY DAY

Herald Writer

EVERETT — Management of Everett Mall has been put in the hands of a court-ordered receiver, a move that could lead to new ownership within months.

The ownership group is in default on a $55 million mortgage and $6 million in taxes, interest and other payments.

For the time being, the official word is that it will be business as usual, with General Manager Linda Johannes and the current staff staying on board, receiver Michael Hess of First Western Development Services said Monday.

Mall managers would not comment on the court action other than to hand out a written statement that noted: "There will be no noticeable changes to either our customers or the merchants of the center."

Hess added that the receivership order issued Oct. 19 is a step toward foreclosure and sale to another owner, although "things could still get straightened out."

Attorney Mark Northrup of the Seattle law firm Graham &amp Dunn representing the plaintiff and mortgage holder, Equitable Life Assurance, said a foreclosure sale could occur as soon as four months from now.

The news seemed to take store managers by surprise. Four approached by The Herald said they had not been told of any changes.

"If anything, maybe some big developer would come in and put some money into it," Sears manager John Schmidt said, adding, "The people who manage it are good people and it’s a great area. I hope it’s a good thing."

Charlene Williamson, who was working in the Century 21 All Stars booth, said she’s concerned both as a tenant and as a shopper.

"It’s a little scary. I like shopping here." she said. "Will our kiosk rates go up? What about the store tenants?"

Also caught off guard was Renee Radcliff, outgoing president of the Everett Area Chamber of Commerce. She said she had heard about possible court action in early October but thought it had been resolved.

"The Everett Mall has been a very vital part of this business community for a long time," she said. "It’s hard news."

Northrup said he has already received a call from "an anonymous party" inquiring about the property.

Brennan McClurg of First Western Properties, which is not associated with the firm handling the receivership, is a leasing agent for the property across Everett Mall Way. He said the effect of a foreclosure on area properties "depends on who buys it. If it’s another absentee landlord who doesn’t do much, then it won’t help."

But he added, "If we get an active landlord, it would be beneficial."

Steve Avoyer, a Southern California retail property specialist, said tenants are not likely to see any difference during the time a receiver is managing the property, but a new owner could mean leases would be restructured.

Although unfamiliar with the Everett Mall property, he’s seen several malls go through transitions that changed the face of the tenant mix. In one case, a traditional indoor mall that people avoided because it was dreary was revived by changing the tenants and turning the stores to face the outdoors.

It’s possible that the Everett receivership is good news, he added, because "regional malls are a hard sought-after commodity" so a sale could attract an established developer with deep pockets who would be willing to invest in upgrading the property.

Court records name several New Jersey-based partnerships, including Titanic Associates, Hindenburg Associates and Normandy Associates, as owners and holders of an overdue $55 million mortgage, dated Oct. 31, 1989.

They had challenged appointment of the receivership, contending that they were not properly notified and that the Snohomish County courts did not have proper jurisdiction.

They did not respond to calls seeking details.

The shopping area, converted into an indoor mall in 1974, was enlarged in 1989, when the Titanic partnership took out its loan. It includes 722,000 square feet with about 130 shops, theaters, a food court and Sears, the Bon Marche and Mervyns as its anchor tenants.

As recently as January 1999, Hampshire Management Co., which manages the mall for the owners, was working with the city on plans to add 274,000 square feet and redesign the complex, but nothing ever came of it.