Lanesborough gives Berkshire Mall owner June 18 deadline to pay nearly $1M in back taxes
LANESBOROUGH — The owner of the Berkshire Mall has two weeks to pay nearly $1 million in back taxes or the town will seize control of the county's largest shopping complex.
Michael Kohan, principal of Berkshire Mall Realty Holdings LLC, has vowed not to lose control of the 720,000-square-foot building on the 89-acre site.
"I will have this settled by the 18th," Kohan told The Eagle in a brief telephone interview Monday.
Kohan has until 1 p.m. June 18 to pay in full the $422,000 in fiscal 2018 property taxes it owes to Lanesborough, and the $520,000 it owes to the Baker Hill Road District, according to legal notices published in Monday's Eagle. Baker Hill, funded primarily by mall tax revenue, is the entity that owns and maintains the connector road between U.S. Route 7 and state Route 8.
Leading town officials are saying little about the potential tax taking.
"It's unfortunate, but we're going through the process required by law," said Town Manager Paul Sieloff.
Select Board Chairman John Goerlach declined to comment when reached by The Eagle.
In late July, the Baker Hill Road District successfully took legal action against the mall for almost $240,000 owed in back taxes from fiscal 2017.
At the time, Kohan told The Eagle that meeting tax payment deadlines has been difficult because he's pumping in money to keep the financially struggling shopping center afloat. He bought the mall in September 2016 for $3.5 million.
The county's largest enclosed retail complex has fallen on tough times in recent years, with the occupancy rate dropping below 50 percent, and losing such retail giants as Sears, J.C. Penney, Macy's and Best Buy.
In addition, the mall had electricity service issues twice during the winter when two power failures a month apart darkened the majority of the building for reasons that remain unexplained.
In an effort to turn around the mall's fortunes, road district and town officials have been proactive in seeking options to redevelop the mall.
First, Lanesborough successfully lobbied for special state legislation giving the road district the legal right to buy the mall. Lawmakers approved the measure in March, and Gov. Charlie Baker subsequently signed it.
The district itself was created by state legislation in 1989, two years after the mall opened, to build and maintain the so-called, "mall road." That task is currently the district's sole legal obligation.
The bonds that were floated to form the district absolve the town of any legal responsibility to maintain the mall road. Under the legislation amending the road district, the district — not the town — would be financially responsible for owning the mall.
Earlier this year, the road district commissioned a $70,000 study to research ways other struggling malls across the country breathed new life into the shopping centers. Funded by a state grant and $20,000 from the road district, Berkshire Regional Planning Commission staff is currently identifying possible new uses for the mall — whether publicly or privately owned.
Last week, a marijuana cultivation company, Chilly Farms of Westborough, told the Select Board it had scouted the mall as a potential location for growing recreational marijuana.
The planning commission will also examine relevant zoning and other regulatory changes necessary for new uses, as well as evaluate existing physical and infrastructure conditions that could impact the mall's redevelopment. A final report is expected by the end of 2019.
Redeveloping the mall is a high priority for taxpayers as well as town officials. A Lanesborough economic development survey released in February found 74 percent of respondents agreed or strongly agreed the mall's future was key to boosting the local economy.
Dick Lindsay can be reach at email@example.com and 413-496-6233.
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