Unpaid Bills Are Starting to Pile Up For Berkshire Mall
LANESBOROUGH, Mass. — The Berkshire Mall bills are piling up.
The mall owner, Kohan Retail Investment Group, under Berkshire Mail Realty Holdings, owes close to a half million in taxes to the town and to the Baker Hill Road District — $230,000 for the road district and $209,000 to the town.
"The Baker Hill Road District is moving aggressively to communicate with the mall about the failure to pay taxes," Town Manager Paul Sieloff recently told the Finance Committee. "They have not paid the road district in many months."
Also in recent months, the court awarded another quarter-million dollars to companies that filed lawsuits against Kohan Retail Investment after not being paid for service.
In March, Petricca Construction filed a lawsuit in Superior Court to collect close to $240,000 in unpaid snow removal bills.
"On or around October 26, 2016, Berkshire Realty and PCC entered into an agreement concerning the provision of services at the Berkshire Mall. According to the agreement, Petricca Construction Company agreed to provide snow removal services as well as services incidental to snow removal, including salting, at a property operated by Berkshire Realty known as the Berkshire Mall," reads the docket filed in Berkshire Superior Court.
The court ruled that Kohan failed to pay $237,491.37 for snow removal and awarded judgment in May. That still hasn't been paid. A month later, the court ordered an execution of judgment to retrieve the $244,629.36, which is the total plus interest, owed.
On Thursday, Maintenance Man Inc. was awarded judgment in district small claims court worth another $3,399.18. In that case, the award was made after no one from ownership appeared in court. It will be back in court in August for a payment review.
Lawsuits against malls owned by Kohan are nothing new. There have been numerous complaints of Kohan falling behind on upkeep and paying bills. The most notable would be the nearby Rotterdam Square Mall in upstate New York where, in 2015, the electric company cut power to the facility because of unpaid bills.
In 2011, a court ruled that the Woodville Mall in Northwood, Ohio, then owned by Kohan, was to be demolished because the mall had fallen into disrepair and posed a public safety hazard.
This year, the Lincoln Mall in Illinois faced the wrecking ball. That stemmed from the village of Matteson suing Kohan for failing to resolve dangerous conditions.
Earlier this year, Kohan paid back taxes from 2014 on the Orchards Mall in Michigan, but still owed 2015 and 2016. That mall was on the brink of foreclosure and Kohan's payment was just enough to push the process back a year. In May, a mall he owns in North Carolina, the Mayberry Mall, had a store been deemed "unsafe" because of water damage after the roof failed. That mall, too, has seen a loss of stores.
Despite the pile up of bills, Kohan Retail Investment continues to buy malls.
Over the past year, the company bought the Indian River Mall in Florida; the Great Northern Mall in New York; the Virginia Center Commons; the Richmond Town Square Mall in Ohio; the Southbridge Mall in Iowa; and Washington Crown Center in Pennsylvania.
According to the company website, Kohan Retail Investment owns 22 malls, including the Berkshire Mall. Kohan's specialty is buying distressed malls and he bought the Berkshire Mall for $3.5 million in September.
The unpaid bills at the Berkshire Mall have caused alarm town officials. The Baker Hill Road District, which manages the Connector Road, is awaiting state authorization to be able purchase property with the intent of acquiring the mall, which could be done through tax taking. The group wants to turn the mall around because, as of now, town officials don't see Kohan doing much to keep it afloat.
"They are very aware and alert to the idea that they have a fiscal situation that cannot continue as it is. They are moving forward with demanding payment of taxes, they are moving forward with the legislation with the state, and they are moving forward with the concept of other revenues such as borrowing," Sieloff has said.
"At this point [the road district] they have kept their bills paid to the town so it is not an issue. But it is on our radar, too."
The mall has been losing tenants, including Macy's, Best Buy, and J.C. Penney. With that, the mall's tax assessment has dropped significantly, from being as high as $60.4 million a few years ago to just $19.5 million. Sieloff expects that to decrease even more.
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