Blue Mountain Mall property returns to auction block

The former Blue Mountain Mall is once again in foreclosure and up for grabs Friday morning.

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WALLA WALLA -- The torn down, partially rebuilt and deserted Blue Mountain Mall property is bound for another round on the auction block Friday.

The lender for the $10.5 million acquisition of the property that took place several years ago is foreclosing for failure to pay. An auction on the courthouse steps is expected to commence Friday at 9:30 a.m., according to a legal notice.

The foreclosure process is one of two in motion. The second was initiated by the city, which is owed more than $23,000 for unpaid assessments from road improvements linked to the mall property more than 20 years ago.

Whether the action will lead to a retail revival of the one-time bustling shopping destination is anyone's guess, officials have said. A similar process that took place last year hasn't brought about any changes or development on the land.

The commercial land situated between Poplar and Rose streets could be a huge attraction for retailers, especially with more traffic passing along the expanding Myra Road and Home Depot located on the adjacent corner, officials believe.

But in its place instead is a pile of rubble and financial confusion.

The development company that bought the land in 2008, tore down the mall and defaulted on payments to contractors and lenders were foreclosed on more than a year ago. That organization was known as Blue Mountain Plaza LLC. The mall was put up for auction in February 2009. But the ownership firm that purchased the property, Walla Walla Holdings I LLC, is apparently a mix of the original investors plus and minus a couple of different names.

One person who had reportedly been linked to the investment was Seattle developer Michael Mastro, who in late 2009 was accused of misleading investors by selling unsecured promissory notes and unregistered securities that raised him more than $100 million.

Whether he continues to have involvement in the new ownership is not known. City officials have said they've had a hard time getting clear information about the ownership groups that have been involved.

They have said that Western Washington residents Winston and Jason Bontrager have remained involved in both ownership groups. Jason Bontrager said in December 2008 the problems were linked to the recession and lending in the construction industry.

The sudden halt to the redevelopment came after the mall was torn down and structures for new tenants were in the works. By then the city had invested public money in a new traffic lane and signal that would have led traffic into the retail property. Two former mall anchor tenants, Shopko and Sears, have continued to operate amidst the chaos of the ravaged property. Pizza Hut also operates on the land.

Walla Walla City Attorney Tim Donaldson said even if the city receives the $23,113.91 due for unpaid local improvement district assessments that helped extend Poplar Street when the mall was originally constructed, he plans to pursue other action to find a remedy for what he calls an "eyesore" and "embarrassment."

"We have this thing out here that's a mess and there's nothing happening," he said.

Vicki Hillhouse can be reached at vickihillhouse@wwub.com or 526-8321.

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