New owner of Berkshire Mall hopes to build on local businesses, community interests
LANESBOROUGH >> The Berkshire Mall's new owner says he has several ideas to turn the struggling shopping complex around, and he considers filling its increasing number of empty retail spaces to be a priority.
"My main idea is to bring in more tenants," said Mehran Kohanseih, the principal partner of Kohan Retail Investment Group, of Great Neck, N.Y. "National, local, any tenants."
Kohanseih, who goes by the name Mike Kohan, said he officially closed on the $3.5 million sale of Berkshire County's largest retail shopping complex on Friday. KRIG currently owns 16 shopping malls between Florida and Washington state, the majority located in the Midwest.
The sellers, a Texas-based real estate company associated with Strategic Asset Services LLC, of Dallas, had taken ownership of the Berkshire Mall in 2014, when the complex's original owner, Pyramid Companies, of Syracuse, N.Y., failed to keep up with payments on the 28-year-old, 720,000-square-foot mall's $36.9 million mortgage.
The mall had been losing tenants before Strategic Asset Services took over two years ago, and it continued to lose them under their ownership. Two of the mall's five anchor stores, Best Buy and Macy's, have departed during the past 12 months.
"National tenants are very challenging," Kohan said in a telephone interview Friday. "Malls across the country are losing them. But with that said, there are always opportunities if you come up with good ideas."
Kohan is interested in holding events at the mall that will bring more traffic to the complex. A statement on KRIG's website spells out his company's philosophy:
"Malls are evolving, and as time goes on they are no longer just a tent to house box stores and chains, but more local small and medium-sized business of all stripes.
"Large spaces offer opportunity for fundraising events, festivals, farmers markets, miniature golf, dancing, concerts, banquets, theater and virtually any social gathering all under one roof with protection from the elements."
"My intention is to create events so that it will be a destination for families, for the community, for everybody," Kohan said. "Entertainment, concerts once in awhile, car shows, animal shows, various different events. We'll have to see which ones match the community. Obviously, the community has to like it."
Some of the other malls that KRIG owns across the country have brought in businesses that Kohan has an ownership stake in. One mall that he owns in Pennsylvania even has a Goodwill store as a tenant.
"That's a good possibility," Kohan said, when asked if he would bring his own businesses to the Berkshire Mall. "I was in the garment center for more than 10 years in New York, so I know inside and out any apparel. I ran theaters all over the country in my malls for three years. So, now I'm involved in those businesses. They certainly could open in the mall."
It has long been rumored that tenants have had trouble succeeding in the Berkshire Mall because the leases offered by management have been too expensive to operate under, allegations that some business owners there have denied.
Pyramid managed the mall itself when it owned the facility, but Strategic Asset Services hired a third-party contractor, Tennessee-based veteran mall operator CBL & Associates Properties, to perform those duties. KRIG will handle the management of the mall under Kohan's leadership.
"We're going to work on that," said Kohan, regarding the mall's current lease structure. "I cannot make any promises. We have to work to the circumstances, but every situation is different. We're going look into that and see if it's a true statement."
Kohan doesn't want people in the Berkshires to get the impression that KRIG is only here to "line people up against the wall and sign contracts."
"We're here to work with the community," Kohan said. "We're here to work with the town."
Lanesborough Town Manager Paul Sieloff said Friday he hadn't met Kohan, and had yet to speak with the Board of Selectman regarding the transaction. Although he said Kohan has spoken with town counsel.
"Clearly, we are taking a wait-and-see attitude," Sieloff said. "I'd like to be cautiously optimistic that he'll put some resources into the mall and allow that unused space to be utilized. Twenty to 25 percent of the mall, I believe, is vacant at this point. It would be nice to see a new owner put time and effort into filling those spaces."
KRIG is known for buying distressed malls and trying to revitalize them. Kohan has had both hits and misses with that strategy. Under his ownership, Kohan said the Tulsa Promenade Mall in Oklahoma went from 75 to 92 percent capacity. But according to the Schenectady Gazette, in the past several Kohan properties have faced municipal action and even demolition due to poor upkeep.
"I just want to say that when you're buying (challenged) malls you're getting yourself into a very challenging atmosphere," Kohan said. "Trying to turn the ship around is a very difficult thing to do. Sometimes no matter how much money and effort you put in, that ship is sinking and you can't right the ship.
"I guess some of those articles are blaming me," he said. "But when you walk into a disaster, how can you turn it around when you put the right stuff and money in and it doesn't work? You're not walking into a perfect world. You're walking into a disaster and you have to turn it around."
Does Kohan consider the Berkshire Mall to be a disaster?
"No, the Berkshire Mall is nowhere near a disaster," Kohan said. "It's one of the better properties I've walked into ... I can tell you stories you're not going to believe about what kinds of disasters I've walked into."
Sieloff also has hope for the Berkshire Mall's future.
"I've always been bullish on the Berkshire Mall," he said. "People have always been concerned about it, but I don't think it will ever fail. It's struggled because the economy six or seven years ago was hammered, and it just takes time."
Contact Tony Dobrowolski at 413 496-6224.