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UPDATE: Mayor Ted Wheeler and Proposer Portland have no plans to prevent the foreclosures of the Northeast Portland mall.

PMG FILE PHOTO: JULIA DEBAECKE - Lloyd Center looking quiet in 2018, now is a lot quieter and could soon be turned into homes and offices due to the owner's loan foreclosure.
Mayor Ted Wheeler has no plans to prevent the foreclosure and redevelopment of the Lloyd Center in Northeast Portland.

KKR Real Estate Finance Trust said it will foreclose on a $110 million loan for the Lloyd Center, close the indoor mall, and redevelop the site into homes and offices, the Portland Business Journal reported Monday, Nov. 1.

The Journal quoted W. Patrick Mattson, president and operations chief of KKR, as saying in an Oct. 26 earnings call: "We intend to foreclose and to take ownership of the asset, enabling us to optimize value over the near and medium term."

Contacted by the Portland Tribune, Wheeler's office said, "Most Portlanders—particularly those who are local like Mayor Wheeler—have a strong connection to the Lloyd Center. We know that shopping habits have changed and indoor shopping malls all over the country have suffered from an economic decline. Our administration looks forward to seeing what's next for the Lloyd Center and do not have plans in place to obstruct the foreclosure of the building. We do hope that the new construction will pay homage to the character that we all know and love about the Lloyd Center."

The Lloyd Center is within the Oregon Convention Center Urban Renewal Area administer by Prosper Portland, the city's economic development agency former known as the Portland Development Commission. The agency has partnered with the Lloyd Center to promote the district, including the adjacent Holladay Park, but the mall has never been designated for public investment.

"We worked with the Mall in supporting the programming and activation of Holladay Park, holiday pop-up shops, and promoting its events. As for the overall area, key priorities for the Oregon Convention Center district are to maximize regional job potential, recruit a convention center hotel, and make transportation improvements that lead to development and connect with the greater Central City. While the Mall has been an anchor and a partner in the district, it was never identified as a priority area for investment by the community. The mall managed its own tenanting and leasing strategy as well as capital investments," said agency spokesperson Shawn Uhlman.

The mall is owned by Cypress Equities of Dallas, Texas. KKR would take a loss on the deal and redevelop the site, possibly bulldozing it and starting again on what is still prime real estate.

"Upon taking title, which is targeted for the fourth quarter, we'll begin to prepare for a comprehensive redevelopment of the site, which we expect will include multiple uses, including residential and creative offices," Mattson said.

The foreclosure story was first reported by Bloomberg Law last week.

Despite a 2014 remodel, the Lloyd Center mall has seen more and more shops close during the COVID-19 pandemic. Sears, Marshalls, Macy's and the movie theater have left and a planned House of Blues music venue has not materialized. When the last manager, Bob Dye, left in 2019, he was not replaced.

The mall is owned by Cypress Equities of Dallas, Texas. KKR would take a loss on the deal and redevelop the site, possibly bulldozing it and starting again on what is still prime real estate.

"Upon taking title, which is targeted for the fourth quarter, we'll begin to prepare for a comprehensive redevelopment of the site, which we expect will include multiple uses, including residential and creative offices," Mattson said.

The foreclosure story was first reported by Bloomberg Law last week.

Despite a 2014 remodel, the Lloyd Center mall has seen more and more shops close during the COVID-19 pandemic. Sears, Marshalls, Macy's and the movie theater have left and a planned House of Blues music venue has not materialized. When the last manager, Bob Dye, left in 2019, he was not replaced.


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