Towne West has not paid property taxes in two years and has bounced employee paychecks

The owners of Towne West Square haven’t paid the mall’s property taxes the last two years and have bounced checks to employees twice.

The 2021 and 2022 taxes and late penalty interest total more than $363,424 as of Tuesday, according to the Sedgwick County Treasurer’s Office.

New-York based Kohan Retail Investment Group and Florida-based 4th Dimension Properties bought the struggling mall in July 2019. The companies share ownership of some other malls, including two that recently paid off past-due property taxes and late fees of more than $1.3 million.

Felix Reznick, principal at 4th Dimension, said in an email that he has “no control over” the Towne West bouncing checks and unpaid taxes. He said to direct questions to people at Kohan Retail Investment Group, including managing member Mike Kohan, who did not respond to multiple requests to comment.

Mall manager Charley Cooper didn’t think the bounced checks, which also affected her, were cause for concern. She did not respond to additional questions about the taxes.

Checks bouncing

Cooper said about 11 checks bounced, affecting three employees earlier this year and eight people, including her, in late May.

The mall has about 16 employees, she said.

It was likely the owners not transferring enough money or possibly an expected rent check not coming in time to cover the outgoing checks, Cooper said, adding that the owners switched over to paper checks, instead of direct deposit, in December. She was not sure why.

Checks were reissued within 24 hours, she said, and any fees were covered in cash.

Cooper said she has been asking to go back to direct deposit, since she thinks it will help reduce the likelihood of bouncing checks in the future. Additionally, she said, it would help reduce fees for employees who don’t have a bank account and have to pay a check cashing service.

One former employee, who spoke on the condition of anonymity to protect from retaliation, said their check bounced. It took a week for them to get a replacement check mailed out, they said, not 24 hours.

“(The employees) shouldn’t be going through this,” the person said. “They need to be paid for what they are doing. It’s just not right.”

Cooper said she has been sick about what happened.

She said she allowed employees to leave work to take care of bouncing checks and tried to get them reimbursed quickly. Cooper questioned why the checks bouncing was a story, since everyone has been paid.

“There is no story,” she said. “If there was a story of unpaid wages, we would take it to the (Kansas Department of Labor), because I wouldn’t stand for it either.”

Cooper said the negativity adds to an unfair perception of Towne West, which, she said, has moved in the right direction since she started three years ago.

She said the mall has added over 30 leases in that time and is in the running for a historic racing facility.

“As much as everybody likes to just rip on (Towne West), there are so many good things happening there,” she said. “Whatever corporate is doing, however, they’re managing their funds, is not a direct reflection of what is happening on our property because they have so much going on. They have too much going on.”

Unpaid property taxes

Sedgwick County records show the owners owe about $195,604 in 2021 property taxes and about $167,821 for 2022 property taxes.

Property taxes can be paid in one or two payments. The 2021 taxes became late on Jan. 20, 2022.

Each month, a 1% penalty is added to the bill.

The 2021 property taxes, which are around 18 months late, have a penalty of $33,224.26 as of Tuesday, according to the Sedgwick County Treasurer’s Office.

The 2022 property taxes, which are coming up on being six months late, have a late penalty of $7,094.56.

Property taxes can go unpaid for about 3.5 to 4 years before the properties are foreclosed on, the treasurer’s office said.

Kohan’s website shows it owns 60 malls. 4th Dimension’s website shows it owns more than 23 malls.

In March, Kohan owed more than $355,434, and an additional $30,157 in penalties and interest for the Central Mall in Port Arthur, Texas, according to the Beaumont Enterprise. The article doesn’t mention 4th Dimension, but the company lists itself as an owner of that mall on its website.

The mall paid nearly $372,000 in late April and was up to date on its taxes, the Jefferson County Tax Office said Tuesday.

Kohan also owed roughly $1,077,000 in property taxes and penalties for the Midland Mall in Michigan, the Midland Daily News reported in March. The article doesn’t mention 4th Dimension, but, again, the company lists itself as an owner on its website.

In March, the companies were in the midst of selling the mall, but the property taxes and late penalties had to be paid before the mall could be sold, the article said.

The Midland County Treasurer’s Office said Tuesday that the bill had been paid Monday.

In 2017, Kohan Retail Investment Group had a $56,000 check bounce on its utility bill at the Indian River Mall in Vero Beach, Florida, according to Treasure Coast Newspapers. The mall was one day away from having its power turned off before paying the $410,000-plus for three months of utility bills, late fees and a bounced check fee. The article doesn’t mention 4th Dimension, but the company lists itself as an owner on its website.