T-R PHOTO BY ROBERT MAHARRY — Makeshift signs at the Marshalltown Mall indicate that the main entrance and walking area are temporarily closed after power was shut off Friday due to nonpayment of electric bills by the mall’s ownrers.

The news of the Marshalltown Mall losing power due to continuous nonpayment of electric bills by the owners is just the latest in a long line of controversies involving the New York-based Kohan Retail Investment Group, which operates the mall through its holding company Marshalltown Development Group LLC.

A cursory Google search reveals a long list of similar situations at malls the company, led by founder Mehran Kohansieh, who goes by the name Mike Kohan, owns across the country — in Iowa, their additional holdings include the Lindale Mall in Cedar Rapids, which was purchased for $28.5 million earlier this year, the Southern Hills Mall in Sioux City and the Westland Mall in West Burlington. The group formerly owned the Story City Outlet Mall and Southbridge Mall in Mason City.

Most of the disputes revolve around nonpayment of utility bills, property taxes and mortgage payments, and in Iowa, the Mason City Globe Gazette reported that the Cerro Gordo County Treasurer sued Kohan for owing hundreds of thousands of dollars in delinquent property taxes in 2018. That mall was eventually sold to another developer in 2022.

As recently as September, another Kohan owned mall, the Tulsa Promenade in Tulsa, Okla., closed permanently due to ongoing fire code violations, according to KTUL Channel 8.

The T-R reached out to Marshalltown City Attorney Steve Leidinger, City Administrator Joe Gaa and Marshall County Attorney Jordan Gaffney to inquire about, what, if any, legal action could be taken by local governmental bodies.

Gaffney indicated that he didn’t feel the county had many options for a short-term resolution.

“What’s happened at the mall over the past few days has been tough to hear. It’s discouraging for the businesses there and frustrating to the people in this community who want to shop locally,” he said. “Any legal recourse available at the county level of government would be limited in its scope. Legal solutions also tend to require lengthy periods of time before reaching resolution. The businesses impacted need solutions and help right now. Fortunately, the Chamber has identified that need and is stepping up in its continued support of our local businesses. Right now, that kind of effort will yield the best outcomes for businesses, entrepreneurs, and customers.”

Gaa said that so far, he and Leidinger have not had the opportunity to look at any legal action on behalf of the city. An attempt to reach Mike Kohan for comment was also unsuccessful.

For now, the most immediate concern is with the three businesses that have been shut down at the order of the fire marshal because they do not have external entrances, coupled with the possibility that the entire mall could be shut down if the bill is not paid soon due to the sprinkler system needing electricity to function. Marshalltown Fire Chief David Rierson explained that the fire code issues when the power is shut off include no lighting in exit pathways, no illuminated exit signs, no emergency lighting, no fire alarm system and no power meaning no heat, which could cause the sprinkler system to freeze.

Oliver Beene Designs, one of the businesses without an external entrance, issued a statement on its Facebook page Friday night.

“Hey all, we are incredibly sad to announce we are shut down temporarily. Unfortunately the owners of the mall have chosen to not pay their electric bill causing the mall power to be shut off. With no electricity this forces the fire marshal for safety to shut all businesses down without outside access,” the post reads. “This is not their fault, this is for safety. We are trying to work through this, we love our valued customers so please keep supporting us through this. Thank you to those that have reached out, we are hoping to reopen soon, keep us in your thoughts and prayers and keep supporting us. We are not done and have much left for Marshall County!”

The Headliner also indicated on Saturday that it will be “closed until further notice” due to the situation. In a lengthy post, Game Haven Owner Scott Turner weighed in on his options if the entire mall is forced to close, which he described as “not great,” and hinted at the possibility of a lawsuit against the ownership group.

“Just know this. If this does go down, and we have to close, we are not closing permanently. We are not taking this lying down. Yes, we are planning to seek legal action. That’s all I can really say,” he wrote.

Mayor Joel Greer indicated that the city had little control over the matter but hoped patrons would continue to support the affected businesses.

“There are times when I wish cities like ours had the power to direct property owners and landlords to do the right things, like pay their utilities, pay for the demolition of their dangerous/dilapidated buildings, develop buildings and land that they buy, and improve their facades,” Greer said. “But this is a free enterprise system. The council and I hope customers support the businesses affected. It makes you appreciate the investors in our new hospital, medical clinics, the Lennox plant, the Kibbey Building with its park, the Willard’s/Hopkins building and Nied’s Pharmacy.”

Under Chapter 657A of the Iowa Code, the city could declare the mall an “abandoned or unsafe property” and attempt to rehabilitate it in the future, but Greer, a lawyer by trade, predicted it would take at least six months before that could happen.

“Our city attorney and I can’t think of a single way to pressure (Kohan),” Greer said.

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Contact Robert Maharry at 641-753-6611 ext. 255 or rmaharry@timesrepublican.com.