Chamber President/CEO updates council on mall power situation
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It's been a chaotic week and a half at the Marshalltown Mall since the power was shut off due to an extended period of nonpayment by the Kohan Retail Investment Group, the New York-based owners of the facility. During Monday night's meeting, Marshalltown Area Chamber of Commerce President/CEO John Hall brought the city council up to speed on the latest developments and his outlook for the future of the mall.
As has been said and written many times by now, the shutoff only affects the common area and the exterior lights as each individual business has its own meters, and by all indications, they have been paying their bills on time. All of the businesses with exterior entrances (12 of the 16) have been able to stay open, and TLC Associates paid to have the sprinkler system rewired and moved onto their meter to avoid any further fire code issues. Still, one looming question that came from Councilor Greg Nichols is what will happen if/when a pipe freezes sometime over the winter.
Near the end of the discussion, Marshalltown Fire Chief David Rierson addressed that concern, noting that while Hobby Lobby and Planet Fitness have their own sprinkler systems, the remaining businesses do not. The Fridley Movie Theater is currently working to figure out a way to separate their building from the mall's system.
"Mother Nature has given the business owners a reprieve of a week, but eventually, unless the heat gets restored, I'm probably gonna have to shut down many more of the businesses even though they have an outside entrance," Rierson said.
The chief added that he has reached out to the owners twice so far and received no response. According to Hall, the Chamber has made contact with 14 of the 16 business owners within the mall so far.
"Of the 16 total businesses out there, I wanna be clear that at this point, none have deemed themselves permanently closed, and so all are working on trying to find other answers," Hall said. "There are four closed inside the mall, four internal businesses, and then 12 open. All the external facing businesses have remained open. There are six that are actively looking or moving."
Hobby Lobby has invested in its own exterior lights at a cost of about $5,000 per week, and Hall indicated that the mall owners have also put up the remaining temporary lights. He told the council he has spoken with ownership, and they believe a resolution of the electrical issue by this Saturday, Nov. 18. During a meeting with the business owners at Mama DiGrado's last week, Mall Manager Scott Wacha, at that time, said they planned to pay the bill by today, Nov. 15.
"This has been going on for about 10 months of unpaid electric bills, so I'll believe it when I see it. But I know that a lot of businesses out there are holding onto hope that is going to be the case, and I am right there with them. If it gets back turned on, that bill gets paid Nov. 18, I promise you I will be cheerleading the ownership for getting that taken care of, but we do have broken trust in the community. The ownership has proved that they can't be trusted to handle the rent dollars and appropriately pay their bills, and that has (a) real impact on our business community."
Because of that broken trust, Hall has been engaged in conversations with a potential local ownership group to buy the mall from Kohan, and he said the current owners are aware that a sale "is a possibility."
"We're actively kind of pursuing that avenue of things knowing that, for the long term sustainability of that asset, it's likely going to require, at very least, different ownership hands, but likely local ownership hands to really get back to where we need it," Hall said. "So I provide that all to you tonight with only the simple final caveat of continuing to support those businesses, especially helping to find unique solutions for them, but then additionally, any levers that the city may be able to pull at present time or into the near future to apply pressure is going to be absolutely paramount to acquiring this asset in a relatively short period of time in order to at least provide for at least some businesses to be able to remain out there if the situation is to deteriorate or get worse."
Mayor Joel Greer reported that he had eaten at Mama DiGrado's in the last week, and the hair salon where he gets his cuts had found temporary space elsewhere. He also noted the struggles of malls across the country but was hopeful about the possibility of local ownership.
Councilor Gary Thompson said the ownership group had also missed its September property tax payment and that Hall may have sounded overly optimistic about ever receiving the money owed. Hall recounted his own experience in Story City, where Kohan owned a mall and ran into similar issues before the situation ended in "true tragedy" with a death on the site.
"While I am hopeful for our businesses out there and for our business community, I am also eyes wide open and realistic that we need to be (prepared for the worst)," he said. "For instance, the movie theater. They can't go anywhere else. That's not a tomorrow decision, but we need to build that communication, that depth of relationship so that if and when they're forced into a situation, we can at least have been working through all this."
Thompson pointed to the former Diamond Vogel retail store downtown as a potential new home for some of the mall businesses, and he felt that with their followings and word of mouth marketing, they could succeed in spaces that aren't necessarily next to other commercial spaces.
One of the businesses, Oliver Beene Designs, has already announced its intention to move to Main Street, and others are considering similar action, including Game Haven Owner Scott Turner, who launched a Gofundme page dubbed "Game Haven's get the f out of the mall fund" on Monday at this link https://www.gofundme.com/f/game-havens-get-the-f-out-of-the-mall-fund. IowaWORKS has also posted on social media informing affected business owners of some of its programs that could benefit them.
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Contact Robert Maharry
at 641-753-6611 ext. 255 or
maharry@timesrepublican.com.