Renee Reed didn’t expect her store within Town Center mall to be cloaked in darkness Tuesday morning.
The store manager at Stoneage Natural Rocks and Crystals received no warning the Kennesaw mall had to abruptly close. There was only a sign on the front doors that cited “unforeseen circumstances” — circumstances she later learned were her landlord’s unpaid power bills.
“It was definitely foreseen,” Reed said Wednesday after the mall’s power was restored and it reopened. “And it impacted all of us.”
The power cutoff was a visible sign all is not well with the mall’s finances. Cobb County records show the mall’s owner is also behind on its property taxes, and other malls the Kohan Retail Investment Group owns have reportedly encountered financial issues.
Kohan Retail, a New York firm that owns Town Center but not the big box stores such as Macy’s, currently owes more than $1 million in property taxes that were due Oct. 15 and now include late fees and interest, according to Cobb court records. The amount could grow if the taxes and penalties remain unpaid and the county moves to sell the tax lien at a sale scheduled in May.
Mike Kohan, the founder of Kohan Retail, said in a brief call with The Atlanta Journal-Constitution that the company’s malls are “doing fine all across the country.” Georgia Power turned back on the mall’s lights after Kohan Retail “met the necessary requirements” following several months of delinquent power bills.
Kohan said refinancing the mall’s loan last year means there “was not enough cash to pay the taxes.” He said the back taxes will be paid soon.
Kohan did not respond to multiple follow-up calls seeking additional comment on the mall’s unpaid property taxes and troubles the company has encountered elsewhere.
Greg Null, an Atlanta attorney with Carlton Fields who specializes in commercial real estate debt, said unpaid property taxes — also called a local tax lien — is a sign the mall’s distress likely runs deeper than some unlit light bulbs.
“It’s a bellwether for the health of the property,” he said. “If there’s a tax lien, there’s a problem.”
Hard ‘to feel stable’
A Texas mall owned by Kohan Retail had its water shut off eight times in 2024 because the bill had not been paid, ABC affiliate television station KXXV reported. Another Kohan Retail mall in Kansas had its power turned off five times in seven months, ABC affiliate KAKE reported. An Iowa mall owned by Kohan Retail was closed for over nine months after its power was shut off, KCRG in Cedar Rapids reported.
Several malls owned by the group have shut down, according to news reports. Others have faced auction due to unpaid taxes, which could also be in Town Center mall’s future.
For the employees who work at Town Center, Tuesday’s sudden closure and the lack of communication have them concerned about its future — especially after examining Kohan Retail’s track record with other malls it owns across the U.S.
“I don’t want it to happen again,” Reed said. “It’s hard for us to feel stable within our jobs here because the company is not stable already.”
Cobb County Tax Commissioner Carla Jackson filed a lien on the property in January after Town Center racked up $998,260 in unpaid taxes, which now surpass $1 million with penalties and interest. Jackson said Kohan Retail was also 10 months late paying its taxes in 2023, the same year the firm acquired the mall for $71 million.
Jackson said her staff has been trying unsuccessfully to reach the company for months.
“We would prefer for people to talk to us if they’re struggling — set up a payment arrangement or something,” she said. “But when we hear crickets, and it’s a big commercial property, I mean, we’re gonna move on it.”
Snowballing debt
If the bill remains unpaid, the tax lien will be sold at auction May 6.
Investors bid to purchase the value of the lien, which the property owner will still have to pay back. The investor can charge 20% in interest during the lien’s first year and 10% in subsequent years, which Null said can lead to hefty profits.
“These sell like hotcakes,” he said. “They snap them right up.”
In addition, outstanding liens can affect other loans and mortgages. After staving off foreclosure last summer by narrowly paying off the loan it used to acquire the mall, Kohan Realty used Town Center as collateral to take out $49.2 million in new debt last year. Spread across two loans, the debt matures in early 2026.
Several regional malls nationwide have shuttered amid the rise of online shopping and since the COVID-19 pandemic. Some Atlanta-area malls have been reimagined or redesigned into mixed-use developments, often with apartments, office space, entertainment attractions and other uses.
Town Center suffered another hit with its Belk store expected to close next month, according to Channel 2 Action News.
Jim Bieri, a national retail expert based with Stokas Bieri Real Estate in Detroit, said there’s a clear divide between malls that are receiving investment and refreshes from ownership and those that are merely investment tools.
“They tend not to invest in the mall, and they squeeze cash flow everywhere they can,” Bieri said of some owners.
Kohan said the company values its tenants and will work to accommodate the tenants impacted by the closure.
“We appreciate the tenants,” Kohan said. “We’re going to consider them as partners and move forward, and 2025 is going to be a great year for us in terms of acquisitions of new malls and also upkeeping the malls that we already own.”
But employees like Reed, who depend on the mall for their livelihood, fear the lights may not stay on.
“There’s so many questions that are unanswered,” she said. “Where is the money going to the point where you can’t pay the bill?”
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