Lights out? Indian River Mall owner must pay more than $410,000 to keep power on Wednesday

VERO BEACH — The lights could stay on at Indian River Mall, but it now will cost nearly a half-million dollars.

Mall owner Mike Kohan of Kohan Retail Investment Group on Tuesday promised the city of Vero Beach he would wire $210,175.02 — covering three months of overdue electric bills, late fees and a bounced-check fee — plus a $200,000 security deposit to keep the city from shutting off the mall's power. 

The city must receive the entire amount by 10 a.m. Wednesday, said City Manager Jim O'Connor. Otherwise, he said, lights will go out at 10:15 a.m.

"We're not waiving anything," O'Connor said. "We have worked with as much good faith as possible."

For his part, Kohan indicated Tuesday afternoon that he would pay the hefty tab.

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"I'm glad the issue has been resolved. Everything is going to be taken care of by tomorrow," he said.

The mall initially owed Vero Beach approximately $150,000 for about three months of unpaid bills, O'Connor said Tuesday. Then, a $56,000 check to the city bounced. That led to about $60,000 in late fees and other penalties.

The $210,175.02 does not include December's electric usage. That bill will be due in a few weeks, O'Connor said.

O'Connor credited TCPalm for helping move the situation toward resolution. City officials had been trying to contact Kohan, but it wasn't until after a reporter called him that he contacted the city, O'Connor said.

Last week, the city sent Kohan a registered letter demanding payment and notifying him the power would be turned off at 8 a.m. Wednesday if the entire overdue amount was not paid, O'Connor said. 

"We want the final payment now," O'Connor said earlier Tuesday. "There's been no good-faith effort showing they are going to keep the account current."

Kohan told TCPalm some of the problems stemmed from the required $200,000 deposit.

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"We had some issues with the billing, but I will take care of this 100 percent," he said early Tuesday afternoon.

A power shutoff would affect individual stores, common mall areas, the food court and mall offices, O'Connor said. Anchor stores such as Macy's and Dilliard's would be unaffected, since they have their own utility accounts.

Meanwhile, the meters continue to run.  

Kohan Retail owns 21 other malls across the country, some of which are small outlet malls, including Graceville Outlet Mall on the Florida-Alabama border, according to its website.

Many of the aging and languished malls had lost anchors before Kohan Retail purchased them, sometimes at rock-bottom prices, and in some cases, anchors pulled out after the purchase.

"The malls I buy are usually problematic buys, malls that have issues and have challenges,” Kohan said in a 2016 Akron Beacon Journal article. "I'm walking into sometimes a war zone."

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At some of the properties, there have been lawsuits and taxes and electric bills have gone unpaid.

In February 2015, The Daily Gazette of Schenectady, New York, reported the power was turned off at Rotterdam Square after Kohan failed to pay a large, outstanding electric bill. Kohan sold that property in June 2015.

In 2012, Kohan’s Village Square Mall in Effingham, Illinois, had its utilities disconnected because of unpaid bills, the Effingham Daily News reported.

Also in 2012, the Jamestown Mall in Missouri was at risk of being closed by county officials because the heat was turned off, The St. Louis Post-Dispatch reported. Kohan told the paper the issue stemmed from thousands of dollars in unpaid bills from the previous owner.

Staff writer Kelly Tyko contributed to this report.