An albatross around the city’s neck, plans for fixing Totem Lake Mall took another hit.
Kirkland City officials confirm the shopping center, long an underperforming dead-weight on the city’s tax-base, is being privately shopped around by owners Coventry/DDR.
“They’re pursuing a number of options,” said City Manager Dave Ramsay. “I had heard, basically on the street, that it was for sale.”
Ramsay announced the property was for sale during a March 3 public meeting, but later amended his comments by explaining the property is not technically on the market. City Economic Development Manager Ellen Miller-Wolfe said Coventry/DDR has put the redevelopment of Totem Lake Mall on hold while seeking new tenants for leases up to three years, but the mall as a whole continues to shed retailers.
“Their response was ‘The economy is difficult’,” she said. “I’ve not heard what their timeline is.”
Local commercial real estate brokers have been gossiping for some time over the property, but speculation began to spread after the value of DDR stock plunged over 95 percent from a year months ago and the company began selling off properties. Investment trusts focused on shopping centers such as Coventry/DDR have been struggling as the recession causes consumer spending to receed, hurting retailers.
DDR Leasing Vice President Marc Hays could not be reached and company spokeswoman Betsy Keck declined to comment for this story.
Cleveland, Ohio based Developers Diversified Realty (DDR) purchased the mall for $37 million in 2003 and eventually signed a $126 million redevelopment agreement in January 2006 to revitalize the mall, promising two anchor tenants, a new cinema, offices and more. They worked with the city and secured a $15 million contribution to the 26-acre project for improving roads, sidewalks and parking from the city.
Last year in June, while the city watched a projected deficit grow to nearly $20 million as the economy soured, Hays predicted DDR would begin demolition work along Totem Lake Boulevard could begin at the end of the year, with some shops ready to open by early 2010.
Signs are the city has already discounted any near-term development there. During meetings on Feb. 17 and March 3, City Manager Ramsay advocated moving Totem Lake state funding to Parkplace and City Council dropped Totem Lake from financial forecasts as they weighed a potential annexation of Kingsgate, Upper Juanita and Finn Hill.
