On Monday, Rudd hand-delivered a letter to each tenant at Prescott Gateway Mall that stated electrical power was scheduled to be shut off on March 9 for non-payment.
“We are reaching out to every Gateway Mall business to alert you that power to the mall is scheduled for shut-off on March 9, 2020, due to non-payment,” the letter read.
Kaela Seisinger, Mall Manager, at the time said she was unable to speak about the matter. “I really have nothing to say on this right now, I’m trying to get everything figured out.”
The letter from APS on Monday to the tenants explained, “Despite setting up multiple payment arrangements to allow Gateway Mall’s property owner and property management company to catch up and pay their delinquent bills, we have received only minimal responses and payments since January.”
As of Wednesday morning at 9:30 AM, that payment had not yet been received. "What I can tell you is there has been no payment made on the account at this time, but [we] look forward to having conversations with the mall owners,” Rudd stated in an email.
Despite reports in other publications that the APS bill has been paid, that does not appear to be the case at this time.
"They are all going to be paid, I promise you. I don’t want the image of the mall to go down,” Mike Kohan, the owner of Kohan Retail Investment Group said. But, “going to be paid” is not the same as “paid”. And Kohan did not give a timeline for when the payment would be made.
When told that APS has not received payment yet, Kohan responded, “I know. But they are all going to be paid."
Rudd was unable to provide details on the amount in arrears, "I am not able to provide you any information on how many months the account is behind nor am I able to provide you a dollar amount on this account.”
Rudd offered a respite, as she continued, "What I can tell is that APS is in the process of drafting a new letter for the tenants of the mall that will extend the disconnect date to 03/16/2020. This letter will be sent out to the Property Management Company later today to share with their tenants and I will be personally walking around the mall on Wednesday the 4th to make sure all the tenants are aware of the date change.”
“We’re concerned about the tenants and their wellbeing,” Rudd said. “We want to keep them informed.”
Current Status for Prescott Gateway Mall
Since Kohan purchased the Mall, it has been populated largely with local businesses, instead of chain stores. The Mall also generously donated space to the Granite Mountain Interagency Hotshot Learning Center.
The tenants are enthusiastic and excited about the opportunity to operate out of the Prescott Gateway Mall. Space is generous and rents are low. Occupancy is at one of the highest levels the mall has ever experienced.
All property taxes on the Prescott Gateway Mall are current and up to date, according to the Yavapai County website. They paid $70,321.64 in taxes for 2019. Some of the parcels around the mall are listed for sale.
But, according to John Heiney, Community Outreach Manager for the City of Prescott, Prescott Gateway Mall is not current on their water and sewer account, either. Additionally, City leadership is concerned about the exterior maintenance of the property.
When asked about the delinquent account with the City of Prescott, Kohan simply reiterated, “They are all going to be paid."
This is not a new problem for Kohan Retail
The Kohan Retail Investment Group currently owns nearly 30 malls in total, according to their website at KohanRetail.com/locations/. According to numerous online reports, many of the other malls have experienced similar problems.
Chapel Hill Mall in Akron, Ohio, is one of those malls according to the Dispatch.com. Their story sounds quite familiar. On April 3, 2019, the Dispatch reported, "The letter sent from Ohio Edison to mall tenants, dated April 1, reads: “This notice is to inform you that you may experience an interruption of your electric service at 7:00 a.m., April 8, 2019 for an indefinite period of time as Ohio Edison has not received payment on the electric service. ... Ohio Edison regrets any inconvenience this may cause.”
Although that crisis was averted in time, in December, 2019 a similar letter was again hand-delivered to the tenants of Chapel Hill Mall. On January 2, 2020, the Beacon Journal reported that Akron public utilities workers were expected to disconnect the water, again due to non-payment. On January 6, 2020 the Cleveland.com publication reported that Summit County would begin foreclosure proceedings against Chapel Hill Mall, this time for non-payment of hundreds of thousands of dollars in property taxes.
"Jack LaMonica, chief of staff for Summit County Fiscal Officer Kristen Scalise, told cleveland.com Monday that the mall on Brittain Road has been a delinquent property since 2018, and the owner has not made a real estate tax payment since January 2019,” Robin Goist, reports in cleveland.com. "“Coupled with real estate taxes, this would make Chapel Hill Mall Realty Holdings the number-one delinquent parcel within Summit County," LaMonica said.
All in all, of the 29 properties owned by Mike Kohan, (aka: Mehan Kohansiek, Mehran Kohansieh, Mehran Kohansiek, and Mehrzad I. Kohansieh) and the 15+ malls previously operated by Kohan Retail, many have had problems that range from non-payment of utilities and taxes to poor maintenance of properties, leading to forced closures and more.
The problem was summed up in the title of an article published about a year ago in MassLive.com,
No tax payments, no lights, no stores and no plan to make it better: Berkshire Mall owner Mike Kohan has frustrated towns all over the country
In that article, Jim Kinney wrote, “...a pattern quickly emerges. Kohan’s malls shut down intermittently and without warning — as was the case with the Berkshire Mall, which shut down for nearly a week and counting after it lost power. Despite Kohan’s protestations, the power remained off and the mall remained closed Wednesday... At other properties, taxes and utility bills go unpaid. Sheriff’s sales and tax takings are scheduled…News reports of Kohan-owned malls not paying taxes, losing stores and failing to attract shoppers date to at least to 2009."
Here is a list of properties currently and previously owned by Kohan.
Current Kohan Retail Properties
- Adrian Mall
- Aroostook Centre Mall
- Central Mall Lawton
- Central Mall Port Arthur
- Central Mall Texarkana
- Chapel Hill Mall
- Colonial Park Mall
- Eastland Center
- Fort Steuben Mall
- Graceville Outlet Mall
- Great Northern Mall
- Holiday Village Mall
- Indian River Mall
- Jasper Mall
- Lycoming Mall
- Midland Mall
- Prescott Gateway Mall
- Richmond Town Square
- Savannah Mall
- Southbridge Mall
- The Esplanade (Kenner, LA)
- Towne West Square
- Tulsa Promenade
- Valle Vista Mall
- Village Square Mall
- Virginia Center Commons
- Washington Crown Center
- Westwood Mall (Marquette)
Properties previously owned by Kohan Retail Investment Group
- Lincoln Mall - Closed permanently, now demolished by court order
- Berkshire Mall (Lanesborough, Mass) - Permanently closed May 28, 2019 except for Target and Regal Cinemas.
- Washington Square Mall - Put up for auction in 2018, due to unpaid property taxes
- Mayberry Mall - Sold to WRS, Inc in February, 2019
- The Orchards Mall - Sold to Durga, LLC, in November 2018
- Lake Square Mall - Sold to VIA Properties in 2014Northland Mall -
- Rotterdam Square Mall - Sold to VIA Properties in 2015
- Staunton Mall - Sold in 2014 to Staunton Mall in 2014
- Story City Outlet Mall (VF Factory Outlet Mall)
- Southshore Mall
- Tiffin Mall
- Towne Square Mall - Sold to Towne Square Mall Holdings LLC
- Warren Mall
- Woodville Mall - Closed by the court due to structural issues. Mall mostly demolished in 2014.