Friday Nov 13 2009
Quarry Ponds owner vows to emerge from Ch. 11 bankruptcy
By: Nathan Donato-Weinstein | firstname.lastname@example.org
Center opened in 2007, hurt hard by economic crisis
Lisa Powers doesn’t sugarcoat the troubles that have befallen Quarry Ponds, the upscale center she opened with much fanfare in 2007. “When you have a massive 900-pound gorilla sitting on your head, you’re not going to be able to move,” she said. That gorilla was the economy, which promptly sunk shortly after the center – one of the most ambitious retail projects in Granite Bay in recent years – launched. On Nov. 3, Powers’ company, Quarry Pond LLC, filed for Chapter 11 bankruptcy protection in what she said was a painful but necessary move to buy the center some breathing space. Quarry Ponds faced foreclosure by Bank of New York Mellon, which holds $19.2 million in debt, according to documents filed in United States Bankruptcy Court. That would have been the worst outcome for everyone, she said, because it would have put outsiders in charge of the place. “A receiver won’t run the property correctly,” Powers said. “We’re not a strip mall.” To be sure, the center has been home to businesses that aren’t available anywhere else in Sacramento – and its restaurants especially shine. Hawks, which opened with the center, is one of the region’s most well-reviewed restaurants, and Pizza Antica has legions of loyal patrons. But other businesses have fallen flat. A denim shop, shoe store, baby boutique and others have failed. On a recent visit, six storefronts at the five-acre development were empty; and a “boutique hallway” with space for several others had just one tenant. Powers said the warning signs started shortly after the center opened, when the subprime mortgage crisis started to crest in the region. “The fall and winter there was just devastating,” she said. “The restaurants lost 80 percent of their Christmas parties.” Things haven’t improved that much, Powers said. And she said the center has been hurt by other factors, including inadequate signage. The upshot? Powers’ “repriced” many of her tenants’ rents in order to help them stay afloat. That hampered the center’s ability to pay its own bills, leading to a default. Still, the center impresses visitors with its mix of upscale shops, lavish décor and setting amid – what else? – a pond. On Thursday, friends Sunny Roccucci and Michelle Haakenson met at the center’s Peets Coffee. “It’s beautiful,” Haakenson, of El Dorado Hills, said of the center. “I think it’s great to have restaurants that are not chains,” Roccucci, of Rocklin, said. Still, the two admitted they likely wouldn’t be opening their pocketbooks at much beyond Peets – thanks to what they said were high prices. “Maybe when I’m 60 and having a dinner party,” Haakenson said. “But I’m always going to buy at Peets.” For now, the bankruptcy filing shouldn’t mean anything for shoppers at Quarry, Powers said. Special events and live music should continue on schedule. What it does is allow for the possibility of modifying terms with the lender, Powers said. And despite the problems, she said Quarry Ponds is a viable enterprise. She said occupancy rates are actually increasing. Capitol Cellars is moving into a space vacated by WineStyles, a wedding consultancy, Engaged, has opened, as has Sarkisian Kabob restaurant. The target to emerge from bankruptcy protection, she said, is in up to nine months. “If anything, our constituency’s stronger than ever,” she said.