MASON CITY | Several checks written by Southbridge Mall Realty Holding, LLC to pay taxes to the county have bounced, officials said.
Three of four checks on Oct. 3 were returned due to non-sufficient funds, Cerro Gordo County Treasurer Pat Wright said in a news release Monday afternoon.
The payment would have satisfied delinquent real estate taxes and interest for Southbridge Mall. The amount totaled $177,324 in October.
Kohan also owes an additional $77,772 for taxes due in September 2018, Wright told the Globe Gazette Monday afternoon.
Kohan told the Globe Gazette via phone Monday afternoon the payments are currently being processed and the balance “should be rectified by the end of the month.”
“We want to rectify this,” he said. “It’s going to be paid.”
He noted that losing Younkers and other tenants in the mall this year has slashed the mall’s income in half, leading to the account delinquency and bounced checks.
When asked if the county and Mason City residents should be concerned about outstanding taxes and bounced checks, Kohan said, “I don’t think they should be worried.”
“We are trying to get together financing,” he said.
The mall's property taxes are important because they are involved in the $39 million River City Renaissance Project, which includes an ice arena/multipurpose venue at the mall and a downtown hotel.
Two options to fill the gap could impact citizens. The city could choose to raise property taxes or implement a local option sales tax for goods and services citywide.
Kohan said his tax payments were processed later than anticipated.
He also said that the treasurer's office had given a grand total of payments they were working towards and seemed unaware that taxes were due in September.
The treasurer's office sued the LLC and Kohan for the delinquent taxes in September.
Prior to the lawsuit being filed in September, Wright said her office worked diligently to collect the real estate taxes on the mall.
The lawsuit was dropped in October after the taxes were supposedly paid.
The civil suit was dismissed without prejudice, meaning it can be brought back to court. As of Monday afternoon, no new litigation had been filed in Cerro Gordo County District Court.
Wright noted in a statement the lawsuit was dismissed in that manner "in anticipation of this possibility" of Kohan's checks bouncing. Wright said she could not comment further on the lawsuit.
Kohan bought Southbridge Mall for $1.5 million in September 2016.
The Mason City Council on Tuesday is scheduled to vote on approving an architectural contract for the multipurpose arena at the mall.
The Mason City Youth Hockey Association told city officials arena construction needs to begin soon or they will "face difficult decisions on investment" because of the age of their ice system at the North Iowa Events Center, according to a memo from city administrator Aaron Burnett to the mayor and council members.
At the Southbridge Mall multipurpose arena, the association has committed to pay for everything related to ice operations, plus $500,000 in cash, not to exceed $2 million. It would lease the arena and manage it during the hockey season.
Burnett said in his memo the two projects -- the hotel and ice arena -- need to run concurrently.