PORT ANGELES — The owner of the building housing Gottschalks, downtown Port Angeles’ largest department store, has one possible tenant or buyer of the downtown structure after the nationwide chain closes.
“We do have at least one feeler out there,” said David Storm, managing trustee for the K.O. Erickson Trust, owner of the 34,900-square-foot building at 200 W. First St. that Gottschalks leases.
He declined to comment further on the subject Tuesday.
“We don’t really have any kind of answer or anything, so I’m not going to elaborate on who it is, but we are getting information and seeing what options are open to us.”
Storm said that ideally, the Erickson Trust would find a new tenant, but that it would weigh other options, too.
“We hope to find a tenant for the building, but we would entertain sales offers, also. But we really would like to keep it going,” Storm said.
A group of liquidation companies purchased Gottschalks Inc. at an auction that ended late Monday. The purchase includes the store at 200 W. First St. in Port Angeles.
The nationwide deadline for completing liquidation is July 15, but it is unknown when the Port Angeles store will close its doors, local store manager Ken Porter said.
“We aren’t really sure when things will happen or which associates it will affect,” Porter said.
Liquidation sales are expected to begin Thursday or Friday nationwide.
‘Triple whammy’
City leaders were scrambling on Tuesday to begin the brainstorming process of how to fill the void that will be left when Gottschalks closes.
Linda Rotmark, Clallam County Economic Development Council director, said the loss of Gottschalks is a “triple whammy.”
“Not only are we losing a business, but an anchor business in downtown Port Angeles, but also an anchor business in downtown Port Angeles that is owned by a trust fund that gives money to nonprofits,” said Rotmark, who plans to attend an Erickson Trust meeting on April 14.
“We need to try and figure out some next steps, because we truly can’t have that building sitting there empty.
“Obviously, there is only so much we have control over, but I’m hoping that there are some really good ideas.”
Port Angeles Mayor Gary Braun said he has one idea on how to fill the building — but he doesn’t plan to share it until he discusses its feasibility with the Erickson Trust board.
He added that he and city staff will begin to consider the budget implications of the loss of sales taxes because of Gottschalks’ closure.
Liquidation ‘only path’
After Gottschalks filed for Chapter 11 bankruptcy protection on Jan. 14 in hopes of either reorganizing or finding a buyer, Gottschalks CEO James Famalette told The Fresno (Calif.) Bee on Monday that liquidation was the “only path” for the Fresno-based company.
An auction on Monday went late into the night as two liquidation groups apparently wrangled over the rights to sell off Gottschalks’ assets.
A third bidder, Shandong Commercial Group from China, had qualified to participate in the auction and was the only entity with plans to keep Gottschalks afloat.
The winning bid — from a consortium involving SB Capital Group of New York, Tiger Capital Group of Boston, Great American Group of Los Angeles and Hudson Capital Partners of Massachusetts — is expected to be approved at a court hearing today by U.S. District Bankruptcy Court Judge Kevin Carey in Wilmington, Del.
The downtown Port Angeles building housed The Peoples department store until 1983, when Seattle-based Lamonts Apparel Inc. took it over. In 2000, Gottschalks Inc. acquired Lamonts.
Storm said that Gottschalks’ lease would end in July or August.
“We were in the process of seeing if Gottschalks would be renewing their lease,” he said. “Obviously that didn’t happen, so we need to see what we need to do.”
Although New York-based DJM Realty has the building housing Gottschalks posted for a sub-lease, Storm said that company wouldn’t rent it out.
“We’d be happy to hear from anyone they find for us,” he said. “But we are the ones who own that building — not Gottschalks.”
DJM had advertised the 34,900-square-foot building at $3.64 per square foot, and Storm said that would be about accurate.
“It is hard to say, because our lease with Gottschalks is a percentage lease,” he said.
“We get a percentage of what they make, so it fluctuates from month to month based on that.”
Famalette said that the winning bid calls for the liquidation consortium to provide 98 percent of the value of Gottschalks’ inventory at its stores and distribution center in Madera, Calif.
That’s 13 percent higher than the group’s original starting bid of 85 percent of the inventory value, Famalette said.
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Reporter Paige Dickerson can be reached at 360-417-3535 or at paige.dickerson@peninsuladaily news.com.
