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City takes Northland Mall owner to court

Conditions inside the former Kmart building are shown in this photo submitted to the Worthington City Council at a recent meeting. (Submitted Photo)1 / 2
Conditions inside the former Kmart building are shown in this photo submitted to the Worthington City Council at a recent meeting. (Submitted Photo)2 / 2

WORTHINGTON — Appearing before Judge Gordon Moore Thursday morning, the city of Worthington made its case to take action against the owner of the Northland Mall.

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Mike Kohan, the owner of the Worthington mall, did not appear in court, nor did any representation from Northland Mall Realty, LLC.

Following an inspection in mid-June as a result of a drug bust within the former Kmart building, city officials found numerous violations within the structure. The city council declared the building hazardous on Aug. 12, and Thursday’s court hearing was the next step in the process of repairing or removing the building.

Moore allowed the city, its agents and contractors access to the building beginning Nov. 14 for the purpose of identifying the next steps to renovate or demolish the former Kmart building.

Director of Community and Economic Development Brad Chapulis said that will accomplish two things.

“First, it will identify the minimum improvements necessary to bring it up to a point of occupancy, so a renovation to address the items is outlined in the order,” he said. “The second component will have a comparison as to the cost of demolition and what steps need to be taken. As (City) Attorney (Mark) Shepherd indicated, there are some intricacies within the building that you can’t just take a bulldozer and bulldoze if demolition is the cost-effective way to abate the hazardous building.”

The court granted access to the portion of the mall that abuts the former Kmart building for the purposes of investigating the best course of action.

“We want to make sure that if that’s the option that’s chosen moving forward, we have a detailed plan as to how we’re going to do that without injuring the remaining portion of the mall,” he said.

According to Shepherd, the Northland Mall Realty Management LLC had been administratively terminated by the Minnesota Secretary of State’s office. However, six days ago, the LLC (limited liability company) was reinstated under Mehran Kohansieh.

Nathan Bowie, Director of Communications for the Secretary of State, said an LLC could be terminated if they don’t file by the end of the calendar year. Northland Mall Realty Management, LLC did not file in 2011 and was terminated in 2012. The company renewed on Oct. 25.

On Oct. 22, Kohan made a telephone call to Chapulis.

“His immediate request was to postpone further action,” Chapulis said, adding that Kohan indicated he was trying to finish a transaction. “We’ve heard that before.”

Chapulis told Moore, “My response was he should present his case to the court this morning.”

In a follow-up interview, Chapulis said Kohan mentioned the possibility of selling the mall.

“A response from a phone conversation that I personally had with Mr. Kohan with last week, was his phone call was specifically to ask the city to stop proceedings so that he can sell the mall,” Chapulis said.

Shepherd outlined the steps the city has taken, including a certified letter — which Kohan had acknowledged receipt.

Within the hearing that lasted less than 30 minutes, Shepherd explained background to the court.

“There was drug dealing going on,” he said. “The Kmart building was being used for illicit purposes.”

After the Worthington Police Department was allowed access to the building, a building official inspected the premises.

“There were a number of different things that constitute a hazardous building,” Shepherd said. He later added, “There is no indication the rest of the Northland Mall is a hazardous building.”

The court also ruled the city should keep track of all expenses to create a lien on the building should it ever be sold.

“What will happen at the commencement of the 14 days is any expense we incur will be logged and when the process is completed, whatever expense that we incur will be the responsibility of the owner,” Chapulis said.

After cost estimates are presented, the final decision will rest with the council.

“Sometime in the near future, once we’ve taken the steps to get them the cost of the professional services, council is going to have to approve hiring somebody,” Chapulis said. “That would be the next step the council sees.”

The city will then ask the courts to make a ruling on their behalf.

“The assessment, when all done, will give us a real time assessment of what cost it would be to bring it up to the minimum standards of the building code and what is the cost of demolition,” Chapulis said. “The city, including the council, can make a final decision as to what we’re going to ask the courts to do to abate the issue, either remodel or demo.”