Many longtime tenants inside Tulsa Promenade mall are feeling something they haven’t felt in quite a while: optimism.
The past year has been marked by an exodus of national retail chains and the decline in the physical property of the midtown shopping mall.
Now that unpaid debt and taxes have led the property into receivership, the tenants — who have come to work every day as the escalators, elevators and, in several cases, the air conditioning broke down and sat in disrepair — are hopeful that those and other issues will finally be addressed.
“We all value transparency and communication, and the purpose of receivership is to have someone who can speak as the owner, which we haven’t had before,” said Stacey Dirks, store market manager at LensCrafters at Promenade. “We haven’t known why things weren’t getting fixed or why management’s hands were tied.
“To know that the intent is to get the mall back to functioning standing is kind of exciting.”
She and other tenants met with mall management and representatives from the company taking receivership of the property last week. They were told the company will begin making a list of needed improvements — fixing the escalators, elevators and air conditioning — and work to get approval from the lender to begin repairs.
“Every tenant feels passionate that 41st and Yale is still a good part of town and there isn’t a reason why this mall should close,” Dirks said. “There are a lot of unknowns, but they are still going to advertise leasing space and try to get new leases as they can.”
Since the start of the year, several national chains have exited the mall. Those include Victoria’s Secret, American Eagle Outfitters, Charlotte Russe, Lids and Kay and Zales jewelry stores.
Hollywood Theaters Palace 12, which was owned by Regal Cinemas, also closed this year.
As for the movie theater and the former Macy’s locations, the tenants were told in the meeting that no one is coming to take over those spaces.
Dirks said that the remaining tenants all have leases at least through the end of the year and that those shop owners remain committed to the mall.
“It seems like there’s a good chance of slowly getting this back to normal,” she said.
Rapid decline, unpaid bills
The mortgage holder on the mall property filed a suit against the mall’s owners last month, seeking foreclosure because of a loan default and the steep decline in the property’s value.
Court filings claim the property’s value has seen a three-year plunge in value from $25.9 million in a 2016 appraisal to $4.5 million, per a recent estimation by NAI Farbman.
The suit also alleges the mall’s owners haven’t made mortgage payments since March.
Mall ownership owes a total of $6.03 million, according to court filings.
The mall is owned by Kohan Retail Investment Group, a New York-based investment company with 27 malls in its portfolio and a history of unpaid bills and tax liens.
In addition to what the mortgage holder alleges it is owed, court records show unpaid local taxes and issues with paying vendors.
The Oklahoma Tax Commission issued a tax warrant in July based off a January assessment that found Tulsa Promenade Realty Management owed a total of $64,827 to the State of Oklahoma for ITI in addition to fees and penalties, bringing the total to $81,653.
That’s just part of the tax problems.
Tulsa Promenade Realty Management, Tulsa Realty 126 and Tulsa Mall Security Services have all been part of several liens and lawsuits regarding unpaid taxes and vendor claims dating back to 2014.
Since that time, Tulsa Promenade Realty and Tulsa Mall Security have a total of $122,278 in unpaid/unreleased taxes and paid $66,654 in claims for a total of $188,932.
The entities have also paid, and or resolved, $480,938 in vendor lawsuits and liens and have another $13,678 in unpaid vendor lawsuits and claims for a total of $494,616, according to court documents.
This isn’t an isolated incident for the owners.
Kohan Retail Investment Group, and its owner Michael Kohan, have been involved several court cases resulting in the foreclosure, and in many cases the closure, of shopping malls across the country.
The Woodville Mall in Northwood, Ohio closed by court order in 2011. The Lincoln Mall in Matteson, Illinois went into receivership and eventually closed in 2015.
In October Kohan paid $1.1 million to stave off a planned tax auction of Washington Square Mall in Indianapolis.
An article in The Republican, a Springfield, Massachusetts newspaper, chronicles those and other issues surrounded Kohan-owned malls.
That article was written after Berkshire Mall in Lanesborough, Massachusetts was unexpectedly shut down after its power was cut.
Nisa Malik, co-owner of Les Parfums, opened the store in Promenade mall 23 years ago with her husband. They, too, are encouraged by what receivership could mean to the property.
“At least we are getting some answers, and that is a really positive thing. At least they are trying very hard,” Malik said. “To me, it looks like at least they are going to try and fix those things and are listening to us.
“I’ve seen a lot of ups and downs, but it is getting better. I’m really happy that we will finally be seeing some results and that the management is coming together with plans to fix the place up.”
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