Everett's Venerable Monte Cristo -- Hotel's A Study In Frustration

EVERETT - The beleaguered Monte Cristo Hotel has been targeted at various times for redevelopment as a downtown haven for senior citizens, high-priced condominiums, low-income housing, office and retail space and even a hotel, restaurant and bar.

Despite the plans, it remains a boarded-up and dilapidated blight on Everett's downtown core.

Last month, Cushing Four Inc., a development group represented by James Hays, was the latest developer to give up on the building, abandoning plans to turn it into office and retail space.

At the time, Hays said the project wouldn't work because the 66-year-old building lacked sufficient parking. The Monte Cristo, which is on the National Register of Historic Places, has only 26 parking spaces. To turn it into an office and professional building, Hays says, Cushing Four needs about 226 spaces.

Cushing Four spent more than $100,000 and longer than a year on the project before abandoning the effort. Hays did not return telephone calls seeking further comment.

Since 1972, when the city closed the once-elegant establishment at the corner of Wall Street and Hoyt Avenue, a string of developers has proposed dozens of grand plans for the six-story, 140-room hotel built in 1925. Rehabilitating the building is not economically feasible, many developers say, at least not without subsidized money.

At $1.2 million, the reported asking price for the property, the Canadian owners want far more than the value attached by Snohomish County. The county's 1991-1992 assessed value is $385,600 - $216,000 for the land and $169,600 for the building. That value has actually fallen from a reported assessed value of $530,500 ($216,000 for the land and $314,500 for the building) in the late 1980s. Owners Edwin Rowan and Verne Granberg could not be reached for comment.

Seattle-based appraiser Maury Schueler says the problem of over-valuation is a familiar one. Rehabilitation in Seattle's Pioneer Square was stymied by property costs for years. Owners were not willing to sell at the price developers could afford to make the project economically feasible. Until sellers came down to meet the market price, Pioneer Square languished, Schueler says.

A Monte Cristo renovation is further complicated by a less-friendly financial environment. Much of Pioneer Square's rehabilitation projects were driven by federal tax credits, which have been eliminated, Schueler notes. Even with those subsidies, rental rates have not been enough to create a good return for most of the Pioneer Square property owners; and many projects have faced foreclosure, he says.

Office space in downtown Everett leases for about $16 a square foot, excluding the costs of concessions such as free rent or space build-out costs, according to a leasing agent familiar with downtown Everett.

At a $1.2 million asking price plus the cost of rehabilitating the Monte Cristo, a developer could need rental rates of $19 to $20 a square foot, which is not feasible in downtown Everett, the agent says.

Gene Martenson, a Kirkland architect who drew plans for the hotel's redevelopment in 1983, says several developers have come and gone since he first became involved.

Robt Jungaro was among several developers who expressed interest in the Monte Cristo. He says the hotel needs about $2.5 million in subsidies to be economically feasible. Before Hays stepped in with his plans to turn the Monte Cristo into office and retail space, Jungaro planned to turn the building into low-income housing.

Low-income apartments were feasible because of the subsidies available, Jungaro says. To turn the hotel into low-income housing, Jungaro planned to obtain about $5 million in tax credits, which he intended to sell to corporations at discounted rates. In addition, Jungaro needed a $3.2 million low-interest loan guaranteed by the federal Department of Housing and Urban Development.

Those plans fell through because of HUD's own troubles, Jungaro says.

Despite developer difficulties with the project, the city of Everett works well with developers and seems to be eager to redevelop the building, Jungaro says. When Hays walked away from his plans, he implied that the city's unwillingness to provide additional parking at below market rates was behind the project's failure. However, the city maintained that they cooperated fully with Hays.

"The hotel is an important element of the desired revitalization of Downtown Everett," says Celia Strong, coordinator of downtown development for Everett. "The city would lend its aggressive efforts to any viable development."

The redevelopment of the Monte Cristo is probably further hindered by its reputation for giving its owners headaches. The hotel's title has been clouded by bankruptcies and its misfortunes have brought it before the courts on more than one occasion.

And the trouble continues.

Martenson, who worked for the Monte Cristo Association, Rowan's and Granberg's limited partnership that has owned the property since 1981, is still owed money for his work from 1983. After Rowan and Granberg abandoned their plans, Martenson says his firm was left with a bill of about $71,000 and a lien was filed against the property.

After years of waiting for a viable plan for the building, Martenson gave up about six months ago and moved to foreclose on the property, he says.

Structurally, at least, there's still hope for the Monte Cristo, according to both Martenson and Jack Rafn, a Bellevue contractor. Both say the building is structurally sound. Rafn examined the building recently for Cushing Four.

It's a building that should be rehabilitated, Rafn says. "From the community's standpoint, it needs to be done."