Tenants of the Gateway Mall received a letter today from the Kohan Retail Investment Group, signed by Mike Kohan, reminding them of their obligations to pay their rent in a timely manner, despite the fact that most of the stores will have to close down for the month of April, due to COVID-19 issues.
It was just March 2, 2020, when Gateway Mall tenants were surprised with a hand-delivered letter from APS informing them that the Mall was scheduled to have the electricity shut-off on March 9, due to non-payment of the account. Becky Rudd, the APS account manager said at the time, “Our top priority is to work with the Konan Investment Group to avoid interruption of service at the Prescott Gateway Mall, and we’ve made every effort to do so. APS is willing to help in any way that we possibly can.”
The letter tenants received from APS at the time, read in part, “Despite setting up multiple payment arrangements to allow Gateway Mall’s property owner and property management company to catch up and pay their delinquent bills, we have received only minimal responses and payments since January.”
Eventually, APS offered a one week extension to the Mall to avoid the disruption in service that the tenants would have to bear. “We’re concerned about the tenants and their well being,” Rudd said at the time.
But it turned out that the Kohan Retail Investment Group was behind on the water bill with the city, too. There were also concerns about the exterior maintenance of the property. This wasn’t some isolated incident. The Kohan Retain Investment Group owns nearly 30 malls across the country, and many of the other malls had experienced threats and actual shut offs of various utilities due to non-payment.
Now, fast forward about four weeks to March 30, 2020. In response to the COVID-19 pandemic, Arizona Governor Doug Ducey issues a “Stay-at-Home” order that requires non-essential businesses to close until April 30. It’s an enormously costly situation for local businesses - they will have no income for an entire month. Employees are being laid off, there are challenges with suppliers. That’s a difficult hurdle for many small businesses to overcome.
In the middle of all this fear and uncertainty, a letter was delivered to the Mall tenants, stating, “Please note, the unexpected force majeure affecting the country and our premises does not excuse tenants’ obligations of payment of rent pursuant to the lease agreements… we request that the rental payments due under your lease agreements be timely paid. [sic]”
Kohan finished up the letter stating, “We, as mall operator and landlord, intend to honor our obligations to you and we expect that you will honor yours.”
One tenant, who wishes to remain unnamed, said wryly that he can only hope that the APS bill has been finally been taken care of.
We tried to reach Kohan for his comments, but he did not answer his phone. Read the letter below: