An eerie moment in subprime collapse

An eerie corporate ghost town opened for a brief, final display this past week in Mountlake Terrace: A gleaming four-story building packed with 320 personal computers, 550 chairs, numerous suites of executive furniture, a massive wooden boardroom table and lots of mediocre office art.

The employees were long gone — all had been summarily dismissed in April when mortgage broker MILA shut down, becoming this region's biggest business casualty in the subprime-mortgage industry's tailspin.

Now every abandoned cubicle, every oversized office plant and every cleaned-out file cabinet was tagged for auction. Two dozen bargain seekers wandered through the building Thursday morning to size up the loot. Even stacks of company sweat shirts and the contents of the lunchroom shelves were destined for the highest bidder in the next day's sale.

The extent of the wreckage was a bit out of the ordinary even for auctioneers who routinely sell the remains of failed businesses.

"We ended up doing 60 or 70 dot-coms in the course of their collapse, and a couple of those were large companies like MILA is," said Terry Moore, spokesman for James G. Murphy Co., which ran the auction. "On this scale, no, it does not happen very often.

"It's been awhile since we've had a whole building filled with office furniture."

The neutron bomb of fiscal collapse did not destroy the slogans on MILA's walls. "It's Opportunity Day," said one. Another wall was painted with a graph labeled "MILA's First $1 Billion Year," showing how employment climbed to 310 from 173 as the company moved into the building in 2003.

Those walls will presumably be painted over shortly — the building is being vacated by next Sunday so the company can stop paying $137,000 in monthly rent to a separate firm also owned by MILA founder Layne Sapp.

The empty MILA Financial Center will be in good company — the next building over is a former CompUSA superstore, equally vacant.

(Borrowers who got loans through MILA should know that the bankruptcy trustee hired technicians to transfer the company's massive databank of loan details and erase the information from computers that were being sold.)

The company's demise pales in comparison to the biggest subprime disasters, like No. 2 player New Century Financial (based in Irvine, Calif.), which is also in bankruptcy, or Countrywide Financial (based in Calabasas, Calif.), which earlier this month said it would lay off as many as 12,000.

But MILA was still a significant player, using its proprietary automated software to issue about $2.8 billion in mortgage loans last year through a network of more than 12,000 independent loan agents, according to bankruptcy documents.

When it sought Chapter 11 protection in July, the company listed $7.8 million in assets and $175 million in debts, much of that in problem loan packages that it was obligated to buy back from investors.

Like others of its ilk, MILA essentially imploded after the big buyers for its bundles of mortgages began to sour on the subprime market in late 2006 as loan defaults increased and housing prices slipped in many parts of the country.

Although it had started to shift into more conventional mortgages as early as 2005, it couldn't make the turn and crashed.

Let's hope the employees who used to sit at all those desks — and the homebuyers whose finances are wrapped up in all those mortgages — have a softer landing.

At Tabor 100 gala, it's retail politics

Tabor 100, a Seattle-based organization of African-American businesspeople and entrepreneurs (named for the late Langston Tabor), held its sold out Captains of Industry Gala on Sept. 15 with some luminary speakers, including Gov. Christine Gregoire and Nordstrom President Blake Nordstrom.

Gregoire talked about the global marketplace, describing how when she flies to Beijing she takes Washington state with her: She flies on a Boeing jet. As she's driving in from the airport, she sees the Microsoft facility. Outside her hotel window, she sees Starbucks. There's even a fully stocked Costco with Washington wines, she said.

When it was Nordstrom's turn to deliver the keynote, he joked that he was pleased to see the governor was here, but "I'm a little hot. She's talking about Boeing, Costco, Starbucks and never mentioned Nordstrom!"

He also might have wondered about the Costco reference — since the company's only Asian stores are in South Korea, Taiwan and Japan.

Gregoire spokesman Lars Erickson said the governor tells that story to illustrate Washington's worldwide impact, but this time missed a crucial phrase: "She'll usually say, when I go to Korea or Taiwan, I see Costco."

Maybe next time the governor hauls out that anecdote she could also throw in the phrase, "And I'm wearing Nordstrom shoes ... "

— Carole Carmichael