Housing studied for Totem Lake Mall
Seattle Times Eastside bureau
The new owners of Totem Lake Mall in Kirkland are considering adding apartments or condominiums to a revamped upper section of the mall.
New York-based Coventry Real Estate Advisors teamed up with Cleveland-based Developers Diversified Realty to buy the struggling mall for $37 million last week. The companies have twice before teamed up to buy struggling or obsolete malls with the aim of turning them around.
Coventry President Peter Henkel said yesterday that tenant demand will ultimately drive reconstruction efforts at the mall.
"We think it is a phenomenal retail location with an underutilized retail center," Henkel said. "We are in the early stages of trying to identify the highest and best use. That may well include tearing down buildings, but we have reached no conclusion yet."
The new owners spent about $100 million redeveloping the City Place mall in Long Beach, Calif. At 26 acres, that mall is the same size as Totem Lake. In Long Beach, the companies razed the underperforming mall and last year redeveloped it as an open-air community center anchored by a Wal-Mart, adding 200 residential units atop the retail space. The two companies are also redeveloping an aging mall in Kansas City.
Henkel said the Totem Lake upper mall, east of 120th Avenue Northeast, offers the best opportunity for adding housing, which he is discussing with the city. He has confirmed that the owners are talking with a number of major retailers, including Target.
Any major reconstruction of the lower mall, which sits atop a former wetland, would require considerable expense to build a secure foundation, said Eric Shields, Kirkland's director of planning. He added that the new owners would also need to resolve existing tenant leases.
"We are aware of the condition of the property," Henkel said. "We have done numerous studies of the site, including the environment and structural site."
Kirkland City Manager David Ramsay said that when the buyers talked to the city, they did not reveal plans. Instead, they listened to city concerns, asked a lot of questions and emphasized a strong retail background.
"One thing they stressed to the city was their flexibility and listening to what works," Ramsay said. "They said they customize solutions and have no formula."
The 290,000-square-foot Kirkland mall was sold by the California Public Employees' Retirement System, which bought it in 1999 for $34.3 million. Former mall managers U.S. Retail Partners considered a $60 million renovation three years ago, but didn't apply for permits.
Selling agent Pat Walmsley, of Secured Capital LLC, said he expects a substantial redevelopment and for the new owners to bring in a large national retailer. One option could be for the owners to redevelop in stages, he said.
Built 30 years ago, the mall has never thrived. A succession of stores have come and gone, including a Thrifty Foods supermarket, Ernst Hardware, Lamonts and Gottschalks. Remaining tenants include CompUSA, Big Five, Ross Dress for Less, Rite-Aid and Trader Joe's.
Nick Perry: 206-515-5639 or email@example.com
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