LOS ANGELES -- The Equitable Life Assurance Society foreclosed on the beleaguered CaliforniaMart and has taken over full ownership of the business.
The dramatic move caps months of rumor and speculation that have been swirling around the Mart since last October, when the giant fashion center first defaulted on its Equitable loans.
Ownership was officially transferred on Tuesday from the Morse family, which had been involved in the ownership and the operation of the Mart since its inception nearly 40 years ago.
Phone calls to former managing partner Sidney Morse's office were unreturned Wednesday, and it was unclear whether he has been keeping an office in the Mart.
Reached Wednesday, a spokesman for the Mart said Morse family members were "not specifically here anymore and haven't been for awhile."
In a letter to tenants dated Aug. 31, Mart president and chief executive officer Maurice "Corky" Newman wrote that the foreclosure and change in ownership is "positive news" and that Equitable "wishes every tenant to know that it is its desire to continue your occupancy at CaliforniaMart."
Newman wrote, "As a result of the action taken, we can better maintain the stability of CaliforniaMart operations and solidify confidence in its future and in the fashion industry here on the West Coast."
The letter assures tenants that Equitable plans to continue the business as an ongoing concern: "Given Equitable's significant interest in the property, it looks forward to making the necessary commitment to help ensure a bright and successful future for CaliforniaMart."
Newman also notes that upgrades to the property have been approved by new ownership and will begin over the next 60 days. These include improvements in elevators, lobby displays, carpeting and other measures.
He adds that plans for various upcoming October Spring markets -- including the Big Blu Jeanswear Show, ISAM, the Los Angeles Junior/Contemporary Market, and the Los Angeles International Textile Show -- "are well under way and remain in place." The Mart's 1,400 tenants account for an estimated $6 billion to $8 billion in wholesale apparel sales each year. About 80 percent of the Mart's permanent leasing space is currently occupied.
In the past, Mart officials have tried to distinguish the CaliforniaMart from other regional centers by saying that, in addition to its wholesale business, it is at the center of a vast design and manufacturing base in Los Angeles County. The apparel industry, with about 90,000 workers, recently edged out aerospace as the county's top employer.At the Mart Wednesday it was business as usual, with showroom owners more concerned about how the building is run, rather than who owns it.
According to Peter Jacobson, owner of Creative Concepts showroom, which represents over seven lines, tenants heard of the possibility of foreclosure months ago.
"At least now we know where we stand and we can do what needs to be done, and with a little luck it might just be better," said Jacobson. "The Mart is not just a piece of real estate, and I believe that if Equitable doesn't get behind the Mart as a concept then there is no need for us to here," he added.
"From what I understand, Equitable has made a commitment to leave the Mart as a Mart -- a service-oriented organization that generates press activity, and acts as our business partner," he said, adding,"'But as a tenant I am concerned as to my legal standing, which as of today has not been communicated to us."
Newman, in his letter, indicated to tenants that "any security deposit posted with the previous ownership has been held in separate bank account, and will be honored according to the terms of your lease."
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