T-R file photo The city of Marshalltown has dropped the code violation case against Marshalltown Development group, the current owners of the Marshalltown Mall. The case was dismissed to help avoid delays in the sale of the property to Reserve Development of Dallas.

Keeping the potential future sale of the Marshalltown Mall in mind, the city of Marshalltown has dropped the code violation case against the current owner, Marshalltown Development Group. On Tuesday, the case was dismissed without prejudice and court costs were assessed to the city.

Mayor Joel Greer said the city took the action to facilitate the potential sale of the property to Reserve Development, an investment company based in Dallas.

“In the big picture, the case would have caused delays,” he said. “The closing sale was [already] supposed to happen, but it could not because of the pending lawsuit. The seller can’t give the title if there’s a pending lawsuit.”

Now that the code violation case has been dismissed, Greer hopes the sale of the mall to Reserve is impending.

“With any luck, the sale will be closing soon, and the new owner will have it,” he said.

The case has followed a long and winding road. The city filed in March, charging Marshalltown Development Group, a holding company of Kohan Retail Investment Group in New York and owned by Mike Kohan, with violating numerous city codes after power was shut off in the mall.

Marshalltown Development Group stopped paying the Alliant bill, which caused the electricity to be shut off in November 2023, leaving the hallways, bathrooms and parking lots unlit. The power has not been turned back on since. The city’s fire marshal, Josh Warnell, determined that Kohan was in violation of seven separate city codes, such as fire extinguishing systems and water mains not being properly maintained.

In July, the court found the mall owner guilty of the violations and ordered a fine of $6,500 with an order to fix the problems within 30 days. However, neither Marshalltown Development Group nor representing attorney Jeff Hazen were present. Due to illness, Hazen submitted a continuation request shortly before the start of the trial, but Magistrate Judge Tom Hillers denied the last-minute motion.

The denial caused Hazen to bring the matter before Judge Paul Crawford in appellate court in October. Crawford determined a new trial was in order and set aside the previous guilty ruling. Crawford wrote the denial of Hazen’s continuation request in July was “unreasonable and a clear abuse of discretion.”

A new trial was scheduled for December but was continued due to a family emergency for Hazen. Before the dismissal, the trial was supposed to be held in the courtroom on Tuesday.

Kohan has a track record of similar behaviors with other properties. He owns malls in Florida, Louisiana, Maine, Michigan, New York, Ohio, Oklahoma, Pennsylvania and Texas. Many have been permanently or temporarily closed because of issues such as unpaid electricity bills or property taxes.

Greer said some people might not be satisfied with dismissing the case and Kohan not facing penalties, but the city is limited to small claims, which is why the original fine was only $6,500. A new fine would have to be collected, and he suspected it would take an extended period of time.

“If someone else buys it, it is easier to bring the mall up to code, which makes it safer, faster and better for future tenants,” he said.

However, Greer added that if Marshalltown Development Group does not sell the property, the city will pursue Kohan again.

“He will have to pay his attorney, the judgement, the appeal and that will take time,” he said. “In the meantime, there is an interested buyer. With no pending lawsuit, the title can be clear.and we could see a new owner who wants to bring in new stores and help existing tenants.”

Existing tenants include Hobby Lobby, Shoe Sensation, Planet Fitness, Mama DiGrado’s, Fridley Plaza 9 Theatre and the Iowa Department of Transportation Driver’s License Station.

After the electricity was shut off, tenants without external entrances had to be relocated. They included Black Iron Barbell, Remix Dance Academy and Oliver Beene.

“At this point, if [Kohan] does not go through with the closing sale, we will sue his ass again,” Greer said. “We know the interested buyer has good titles.”

——

Contact Lana Bradstream at 641-753-6611 ext. 210 or

lbradstream@timesrepublican.com.