Chapel Hill Mall again avoided having its utilities shut off Friday, but it’s still in hot water.

Summit County plans to begin foreclosure proceedings against the struggling mall because of delinquent property taxes.

The owner of the mall owes nearly $167,000 in back taxes and will receive a bill for just over $400,000 this month. That bill will include the back taxes, additional property taxes and utility assessments.

The owner narrowly avoided having the mall’s water shut off Friday by paying part of the water and sewer fees.

Jack LaMonica, chief of staff for Summit County Fiscal Officer Kristen Scalise, said his office sent several property tax bills to the mall’s owner but has been unable to reach him.

"Kristen just felt — because we were not able to get in touch with the owner — it best served the county to work with the Land Bank to initiate foreclosure," LaMonica said.

Mike Kohan of Kohan Retail Investment Group said Friday that he was unaware of the county’s plan to begin a foreclosure. He thinks this is avoidable.

"We’ll pay it," he said. "That’s not a problem."

Kohan Retail Investment Group, though, has had similar struggles at the 27 malls it owns across the country, with some properties shut down intermittently and without warning, and others owing back taxes and utilities or facing sheriff sales and foreclosures. Redevelopment plans often emerge, with a new company stepping in, according to a recent story by MassLive Media, a digital news provider in New England.

While acknowledging these problems, Kohan said his company remains committed to keeping Chapel Hill afloat.

"It’s very hard to overcome all these things with the situation in retail with the market that’s going on," Kohan said.

Shut-off threats

Kohan Retail bought Chapel Hill Mall, located on Brittain Road, in July 2016 for $8.6 million.

The mall has struggled recently, facing threats to turn off its utilities three times in the past year. Ohio Edison scheduled and rescinded electricity shut-offs in April and December after accepting late payments.

Akron was set to turn off water to the mall Friday morning but opted against it because of a partial payment. The city, however, said the mall’s water and sewer account remains delinquent.

"The city will continue to negotiate with the property owner regarding an appropriate payment plan or additional shut off notices may be issued in the future," the city said in a statement.

Akron had warned mall tenants about the possible water turn-off, which would have meant the shutdown of the mall as well. The mall’s owner similarly provided assurances that the facility would remain open.

Ellen Lander Nischt, Akron’s spokeswoman, said the shut-off was canceled after the owner made a payment. She declined to say how much was paid, citing an exclusion in public record law pertaining to utility bills. She said the city has been negotiating with the mall owner about the delinquent utilities for a year and a "six-figure" amount is still owed.

The mall was going to be assessed $182,280 on its next property tax bill for water, sewer and street lighting and sweeping fees. After the latest payment, this amount was reduced by $52,000 to $130,280, according to county fiscal office records.

Kohan said the company will satisfy what it owes Akron.

"We’re in good terms, and we’ll make that happen," he said.

Foreclosure beginning

A foreclosure against Chapel Hill hasn’t been filed yet, but the process has begun.

The mall last paid property taxes in January 2019, with a $540,155 payment. Multiple statements sent to the mall’s owner since that date went unanswered, according to the county.

The fiscal office will send a bill in mid-January for $403,418 that will be due Feb. 14. A second property tax bill will be delivered in mid-June, with the payment due in late July.

The amount of the second payment will be based on how much the mall pays toward its debts to the county and city. The combined amount of the two property tax bills this year could be as much as $640,000, according to the fiscal office.

When the fiscal office opted to move forward with a foreclosure, it sought assistance from the Land Bank, a nonprofit established in 2012 to reclaim and rehabilitate vacant and blighted property.

Land Bank Executive Director Patrick Bravo said the agency ordered title work on the mall Dec. 4 and received the information Thursday. The agency will now send staff to examine the exterior of the mall and write a report.

This information will be forwarded to the Summit County Prosecutor’s Office for a foreclosure proceeding, which can take several months or much longer.

When Summit County tried to foreclose on Rolling Acres Mall for back taxes, the California-based owners of that Akron mall delayed the process for years by filing repeated bankruptcies.

With Chapel Hill, the owner could pay off his property taxes and avoid foreclosure or go on a payment plan, which puts off foreclosure as long as regular payments are made.

If the foreclosure goes forward, a judge would put the property up for sheriff’s sale. If there are no buyers, the mall could end up with the Land Bank, which could pass it to Akron for redevelopment.

Nischt said Akron will continue working with Kohan with an eye toward possible future plans for the 72-acre mall property, which enjoys an important foothold in the Chapel Hill neighborhood.

"We’re well prepared to support success at that location — whatever that looks like," she said.

The city said in its statement Friday that the mall site "presents great opportunity for any combination of commercial, residential, retail or light industrial use."

Mall scene

The mall sought to assure customers that it would be open as usual Friday morning.

"Chapel Hill Mall is open and operating!" the mall said in a Facebook post about 10 a.m., shortly after the mall opened. "Have a wonderful day!"

About 25 stores were open for business Friday, along with two restaurants in the food court. The carousel also was operating. Several die-hard walkers used the mall for exercise.

David Gindlesperger, 63, of Akron, said he and his son are on an exercise kick, so they’ve been walking inside the mall to escape the cold weather.

While he went there to walk, Gindlesperger said he and his family enjoy going to the mall. He said it was sad to see how empty it was on Friday, but he hopes Chapel Hill will find a way to stay open and add more businesses. The mall’s only anchor remaining anchor is J.C. Penney.

Gindlesperger, who has lived in Akron for 40 years, also watched the decline and eventual closure of Rolling Acres Mall, where he met his wife, who worked there in 1977. He was working at a nearby gas station when she came in and they had their first date at a steakhouse at the mall.

Gindlesperger said he hated to see that mall go, and to see Chapel Hill going the same way. He said the malls’ closing is indicative of changing times.

"Everything’s changing, and I don’t think for the better," he said.

Stephanie Warsmith can be reached at 330-996-3705 and swarsmith@thebeaconjournal.com. Sean McDonnell can be reached at 330-996-3186. Amanda Garrett can be reached at 330-996-3725 and agarrett@thebeaconjournal.com.