Marineland emerges from foreclosure with new owners, new outlook

One of Kennewick’s most iconic shopping centers is getting an update after a group of Tri-City investors rescued it from foreclosure in late 2015.

The former Marineland Village, now Marineland Plaza, is getting a facelift courtesy of the investors led by Manuel Chavallo.

Operating as Clearwater Professional Suites LLC, the group bought the property after submitting the winning bid of $3.4 million for the 54,500-square-foot center in a trustee’s auction in December.

Now, they’re looking to modernize the center and win tenants to improve its financial performance after several years of malaise. The prior owner, El Segundo, Calif.-based Del Mar Equity Partners Inc., bought Marineland in September 2005, apparently intending a turnaround.

Its lender foreclosed in March 2014 after Del Mar’s loan balance topped $5 million. Marineland passed into receivership and an auction was scheduled.

Chavallo said he and his partners saw a gem in Marineland despite its dated appearance and large number of vacancies.

Its location at West Clearwater Avenue and Edison Street places it in the center of Kennewick. The three-building property was well built when it was developed by Warren Luke.

Still, its 18-plus months in foreclosure had chilled leasing. By the time the auction occurred, about 14 storefronts were vacant, each representing 1,500 to 2,000 square feet of leasable space.

Chavallo found the challenge irresistible.

“We’re all local owners,” he said. “We got pretty excited about it. We wanted to see if we could make the improvements.”

There’s no reason Marineland can’t thrive, said Rob Ellsworth, senior advisor for SVN Retter & Company, formerly Windermere Commercial.

“It’s a dynamite corner and location,” he said, adding that updates are long overdue.

The update includes a new simplified facade with copper-colored awnings and LED lights in the parking lot. The palm trees that once helped validate the Marineland name were removed years ago.

“They’re gone and they’re not coming back,” Chavallo said.

The construction has been disruptive for the center’s tenants, but the payoff will be worth it, said Toni Cavanaugh, manager of Marla June’s Clothing Co., a ladies’ clothing boutique.

“We’re excited,” she said.

Chavallo declined to disclose the budget for the updates but said tenant interest in the property perked up quickly after the trustee’s sale closed. Now, there are just five empty spaces.

He credits the center’s brightening prospects and investments made in the neighborhood, notably the city of Kennewick’s $3 million project to widen nearby North Edison Street between Clearwater and West Canal Drive.

“The final product is beautiful,” he said of Edison.

Completing upgrades is the new ownership group’s first priority along with improving its financial performance by signing more rent-paying tenants to empty spaces. In the longer term, it could build an additional pad space.

Chavallo said the owners have not decided whether to hold onto the property as an investment or to sell it at a presumed profit once rent rolls are stabilized.

“It’s kind of an investment more than anything,” he said.

Enlow’s Construction of Richland is the contractor for the project. Businesses in Marineland remain open during construction.

This story was originally published November 14, 2016 at 7:05 PM with the headline "Marineland emerges from foreclosure with new owners, new outlook."