Jeff Strong, managing partner of Reserve Development with Sean Porter, said they are particularly excited about the Marshalltown project. They found out about the mall during a visit to the Lindale Mall in Cedar Rapids. The developer acquired the former Sears property in the Cedar Rapids mall in 2024.

“There was something about this property in this small town,” Strong said. “We talked to [city and business leaders], and they were so excited that something could happen at the mall.”

Marshalltown Area Chamber of Commerce President/CEO John Hall said Strong’s statement of excitement amongst city leaders is accurate, and added that the Chamber was involved in the initial meeting.

“This was an opportunity to talk about and sell Marshalltown as a place to invest in,” he said. “That is part of this job. There are a lot of places to invest money in, and we figure out how to place this community for those investments. We talked [to Reserve Development] about what it might look like, and told them to let us know how we could be helpful.”

Since the power shutoff 15 months ago, several businesses have left the mall, but Reserve Development Partner Jeff Strong is optimistic about the prospects of bringing big box tenants back in the months and years to come.

Getting a developer who is able to transform the property is a positive. Hall said when someone considers the trend of decreased interest in internal shopping malls during the past 30 years, Marshalltown needed an opportunity for redevelopment.

“We needed someone who knew what they were doing,” he said. “We wanted someone with knowledge of and practice with retailers.”

Hall said the revitalization of the mall will have a positive impact on Marshalltown. It will recapture money residents spend outside of town and will present excellent opportunities for future retailers. He understands there is a fear large retailers will kill downtown businesses, but he said the reality is different.

“Communities with these large retailers, they have thriving downtowns,” Hall said. “People go there for tourism, activities and to look at other businesses to supplement their trip. I am excited for what market opportunities will look like for Marshalltown as a result.”

Sale details

The sale to Reserve Development was something that has been expected for a few weeks. One of the reasons for the delay is unpaid taxes. Marshalltown Development Group was supposed to pay $28,496 in September, and Strong said they are trying to get Kohan to pay. However, Kohan has a history of not doing so on time. In September 2023, he owed $32,639, which was not paid until January 2024.

Another expense that follows the property, not the owner, is the water bill, and he said there is a water leak in the back of the property.

“It’s behind Hobby Lobby, there is water in the parking lot,” Strong said. “It’s been there for a year or more. We are going to dig it up and repair it. So, [taking care of] utilities will come first.”

Fortunately, Strong said the infamous electricity bill follows the owner, not the property.

“We talked with Alliant and it’s a very large electric bill,” he said. “But they let us know once the sale closes, there will be no issue in getting electricity restored.”

Power to Marshalltown Mall has been a big problem since November 2023, when it was shut off in the common areas of the building due to Kohan’s continuous nonpayment. It has not been turned on since. Businesses with exterior entrances, such as Hobby Lobby and Planet Fitness, had their own electricity bills and stayed open. Interior businesses, such as Black Iron Barbell and Oliver Beene, had to relocate.

Future

Strong estimated $10 million will be put into the property to make it ready for tenants, and has a goal of opening in March or April of 2026. After utilities are addressed, the exterior will be worked on, such as a new roof and facades.

He said they are talking to some familiar players regarding the future of the Marshalltown Mall. He said one change is it will become a “power center,” rather than a mall. Hobby Lobby, Planet Fitness, Fridley Plaza 9 Theatre and Shoe Sensation will all remain. Strong said they have special plans for the movie theater.

“We are going to spend money and give them a new look, new chairs,” he said.

They plan to move U.S. Cellular to the end of the building. Strong also hopes to move the Iowa Department of Transportation Driver’s License Station. Mama DiGrado’s will find a new location.

“We need a big space for big box tenants, which we are leasing to,” he said. “As of now, every single space is spoken for, not leased yet, but spoken for.”

There is a family entertainment business interested in the back part where JCPenney was located before closing.

“That will be a great addition if we can get it here,” Strong said. “The entire mall will be transformed with little space left.”

He said demolition should start soon, perhaps next week, and they are working on letters of intent to send to six major national and one regional retailers. He could not reveal which retailers Reserve Development is talking to, yet.

Hall is aware of a few of the businesses Reserve Development is talking to, and some are national retailers the Chamber previously contacted.

“They are interested in this market if they can figure out the space,” he said. “These are retailers folks in Marshalltown and Marshall County are driving to in Des Moines, Ames, Cedar Rapids.”

Redeveloping and bringing in retailers is what Reserve Development does, Strong said. One example is the Hampton Town Center in Hampton, Va. He said when they bought the property, it was 50 percent vacant. It took them three years, but it is now 95 percent full.

They also purchased the East Gateway Mall in Lincoln, Neb., which would not have been possible without tax increment financing (TIF) from the city. Strong said they were able to place three retail stores – Burlington, Sierra and Total Wine & More. He said they also placed a Tesla service center.

“It did not take long to do that, and we are the third owner of the property,” Strong said. “We were able to get it fully stabilized in 12 months, which is a rarity.”

The Marshalltown Mall is a project he looks forward to starting. He credits the residents with inspiring his excitement and thinks they will also be excited about what is to come.

“The people were so excited something could be done,” Strong said. “We don’t usually get that, and it’s very gratifying. People said this could make a difference in their community, which made us excited.”

Contact Lana Bradstream at 641-753-6611 ext. 210 or lbradstream@timesrepublican.com.