New money player adds intrigue over the fate of PacMed Center
By Seattle Times Business staff
What's next for the mostly empty Beacon Hill landmark popularly known as the PacMed Center?
That now depends to a great extent on Amos Financial of Highland Park, Ill., a company in the business of buying delinquent debt from lenders and then trying to collect from borrowers.
Until a few weeks ago Amos had no interest, financial or otherwise, in the 16-story brick tower. Then it acquired a mortgage secured by an interest in the former hospital.
Now it faces an unusual dilemma: How do you collect anything on a $20 million note when the collateral could vanish in a couple weeks?
Let's back up.
The PacMed Center's owner is the Pacific Hospital Preservation & Development Authority (PDA), a quasi-public agency that provides access to health care for the uninsured and underinsured. In 1998 it leased most of the building to Seattle developer Wright Runstad for 99 years.
Wright Runstad, in turn, borrowed $23 million to renovate the tower, then subleased it to Amazon.com.
But Amazon moved out when its lease expired more than a year ago, leaving Wright Runstad with no revenue to make payments to its lenders or pay rent to the PDA. Unable to find another tenant, the company defaulted on its loan a year ago, then missed its quarterly lease payment to the PDA this June.
Wright Runstad had until Aug. 27 to pay the $380,000 in back rent. It didn't. But the owner of Wright Runstad's debt still has another 30 days to make the payment itself and assume the 99-year lease.
That would be Amos Financial. The company bought the nonperforming mortgage, which has an unpaid balance of more than $20 million, in an online auction earlier this summer. The original lenders said they would accept as little as $100,000. Amos didn't pay much more than that, according to one source.
What are Amos's plans? "We're trying to work something out with all the parties," Amos principal Ohannes Korogluyan said this past week. "Just what that will look like isn't quite clear."
Here's the conundrum Amos faces: The note it holds is secured not by the PacMed Center itself, but by Wright Runstad's 99-year lease on the building. And, if Amos doesn't pay the $380,000 in back rent by Sept. 27, that leasehold interest evaporates.
Should that transpire, PDA officials say they would be free to lease the tower to someone else. And Amos's prospects for collecting on its newly acquired debt would become even murkier.
Korogluyan wouldn't say whether Amos intends to pay the back rent. "It's a complicated situation," he said.
Another complication: The next quarterly lease payment -- another $380,000 -- is due Sept. 5. Amos is on the hook for that as well.
"This is a waiting game now," said Kevin Fox, who chairs the PDA's board.
— Eric Pryne, firstname.lastname@example.org
If your jumbo jet is feeling cramped ...
Even a personal 747-8 — the newest and largest Boeing jumbo jet, with a cabin twice as large as the average new U.S. home — can apparently get crowded if you're an emir with an entourage or a head of state trailing lots of staff and stuff.
So Kirkland-based Greenpoint Technologies and Boeing developed a way to carve out another 393 square feet on board — enough for "eight private sleeping berths and a changing room."
This past week the companies delivered the first such interior modification for a 747-8 Boeing Business Jet. The customer's identity is a secret, according to the companies, although markings on the plane when it was turned over by Boeing in February identified the buyer as Amiri Flight, the private airline for the royal family and top officials of Qatar.
Greenpoint's Aeroloft is distinct from the second-level quarters in the 747's unique hump. The Aeroloft is built up inside the fuselage, behind the wing, and is reached by its own staircase from the main cabin.
"It's extra square footage they can add on to the existing plane," says Greenpoint spokeswoman Christine Hadley. With the Aeroloft, the 747-8 has 5,179 square feet of cabin space, the companies say.
The cost of the addition is also secret but as they say, if you have to ask you can't afford it. Boeing's list price for the 747-8 passenger plane itself is $351 million.
Two more Aeroloft-equipped 747s are scheduled for delivery this year. Whether there are any further orders is yet another secret.
The plane, fitted out in Wichita by Boeing's Global Transport & Executive Systems under contract to Greenpoint, headed out this week for Hamburg, Germany, for "completion of its VIP interior," according to a news release. That will take until sometime in 2014.
— Rami Grunbaum