One of the tenants at the Lumen condominiums at 500 Mercer St. leaked an internal e-mail to the News last week that painted a dire financial picture of a project that includes a QFC on the ground floor.
Alan Winningham - who has been managing the project as a principal with Landstar Real Estate LLC - stressed at a meeting last weekend with the tenant-owners that most of their worries were based on inaccurate information or had been taken care of, he said. "It was unfortunate, because I think it created an anxiety that was unnecessary."
Still, the e-mail lists 23 areas of concerns: some minor but many major. Minor concerns including whether owners' key fobs would work on the door locks if power went out. But that question tied into a major concern, that utilities would be cut off on Dec. 3 if an outstanding $35,000 bill wasn't paid.
The e-mail also indicates that payments to the contractor were delinquent, as were payments to the interior director for the project and payments to Albert Lee Appliances, which installed all of the appliances in the condos. The cabinetmakers for the project also hadn't been paid, and neither was the company that made the project signs and had placed a lien on the property as a result, according to the e-mail.
The billing for utilities came in at $485,000, which could pay for enough kilowatt hours to run an aircraft carrier for a year, said Winningham; he added that the amount was obviously inaccurate. "Their instant response is, 'We don't make mistakes,'" he said. But since then, the city has credited the Lumen with more than $400,000, according to Winningham, and the utilities were on when he was interviewed for this story on Monday, Dec. 10.
Calls for comment made to the creditor companies listed in the e-mail either were not returned or reached staff members who declined to comment. But as far as Albert Lee is concerned, nonpayment of part of the bill involved a contract dispute about performance, he said.
However, Lumen has placed the money still owed to the Queen Anne company into an escrow account, Winningham said. The other creditors have been paid or delivery of their services or products has been delayed until Lumen can pay them, he added.
That's not to say the project hasn't faced some financial pitfalls, Winningham conceded. The sub-prime loan fiasco put a squeeze on loans of all kinds, he said. "As a result of that, we had 12 buyers who were unable to close."
That happened last summer. "By the end of July, when it was clear we wouldn't be able to close on those deals ... we went out and obtained a commitment from a bank [for refinancing]," Winningham said.
But the bank, faced with its own loan-portfolio problems, backed out of the deal, he said. "As soon as we found that out, we went back to the market." It took another month and a half, but Lumen secured refinancing in late November, according to Winningham. "That's in place; it's a done deal."
There are 94 units in the Lumen ranging in price between $300,000 and $1.5 million. Seventy of them have closed, three or four are in escrow, and Lumen is in negotiations to sell several more, he said. "Hopefully, the balance will be sold and occupied by [next] March."
In the meantime, the media center hasn't been completed, the Sky Lounge is still missing furniture and flat-screen TVs, and the unit Winningham is buying in the complex is still under construction. "I hoping to move in in February."
There are also some cosmetic improvements needed, but Lumen has landed Office Max as a tenant in part of the remaining commercial space in the building off Fifth Avenue North, he said. Construction is set to begin for the Office Max space in January, and the store should be open in April, said Winningham, who added that Lumen is negotiating with several other potential tenants for the remainder of the commercial space.
Winningham said he understands why owners in the Lumen were upset about the alleged problems in the building, and he's happy the issues have been addressed. "The positive thing about this is, the deck is cleared."
Staff reporter Russ Zabel can be reached at firstname.lastname@example.org or 461-1309.