Met Mortgage to abandon Pasco project

Metropolitan Mortgage & Securities Inc. will abandon a multimillion-dollar mall project in the Tri-Cities.

The bankrupt Spokane firm owes more money on the factory outlet mall than what appraisers say the entire project is worth.

According to court records, Metropolitan owes more than $15 million on the Broadmoor mall and several related properties. The properties are worth an estimated between $10 million and $11 million.

The mall was built in 1994 in Pasco. It has about 16 tenants, including Bass Shoe Outlet, Big Dog Sportswear, Sunglass Hut and Van Heusen.

To fund the mall project, Metropolitan borrowed $9.7 million from its Western United Life Assurance Co. subsidiary.

To fund property development of several vacant parcels nearby, Metropolitan borrowed another $7.5 million from another insurance subsidiary, Old Standard Life.

Metropolitan had been fulfilling the terms of its promissory notes with the insurance companies until July 1, when executives leading the company through bankruptcy decided to walk away from the Broadmoor projects earlier this month.

In court records, Metropolitan chief restructuring officer Bill Romney said an outside appraisal used to value the Broadmoor properties is now considered unreliable.

Inflated appraisals are among the problems plaguing Metropolitan, along with questionable accounting and fraudulent sales practices that netted unsuspecting investors.

By missing payments and filing the court motion, Metropolitan seeks to cut its losses and preserve the money for its creditors.

If the motion is approved, the Broadmoor properties will become assets of the insurance companies, which have been placed under state control while Metropolitan works through its bankruptcy.

The company hopes to file a bankruptcy plan by Aug. 30 that will detail how the company will attempt to pay back thousands of investors.