MASON CITY | The Cerro Gordo County treasurer has dismissed a civil lawsuit against the owner of Southbridge Mall for unpaid property taxes.
A payment of $177,324 was received from Southbridge Mall Realty Holding, LLC and processed on Oct. 3, Treasurer Pat Wright said in a news release, satisfying delinquent real estate taxes and interest.
Prior to the lawsuit being filed in September, Wright said her office worked diligently to collect the real estate taxes on the mall.
According to documents filed Thursday, Wright dismissed the suit through her attorneys. Wright asked the suit to be dismissed without prejudice, meaning it can be brought back to court.
However, the company still owes $75,507, plus interest, on taxes due Sept. 30. Interest accrues at 1.5 percent per month.
“In the event these current real estate taxes remain unpaid, the parcels will be listed on the annual tax sale in June 2019,” Wright said in a statement.
Southbridge Mall Realty Holding, LLC is owned by Mike Kohan, of Kohan Investments in Great Neck, New York. Kohan originally bought Southbridge Mall for $1.5 million in September 2016.
Southbridge Mall's property taxes are important because they are involved in the River City Renaissance Project. The taxes will be used by the city for tax increment financing, a type of municipal financing method which would pay off bonds on the ice arena/multipurpose venue.
Mason City Finance Director Kevin Jacobson said in July that if Kohan doesn't pay his property taxes, the city wouldn't immediately receive the money for that revenue stream of the project. Those funds would be delayed until the tax sale process is finalized, he added.
Two options to fill that gap could impact citizens. Using a debt service levy could mean an increase to Mason City residents' property taxes. A local option sales tax would not increase property taxes, but would be applied to goods and services citywide.