Struggling Esplanade mall in Kenner could owe more than $1M in back taxes, officials say | Business News

The New York-based owner of the Esplanade shopping mall failed to pay more than $300,000 in 2019 property taxes, resulting in Jefferson Parish taking title to two parcels of land at the Kenner shopping center — including the former Macy’s — last summer.

Kohan Retail Investment Group purchased the mall in 2018. But for the year 2019, the firm didn’t pay a $243,000 parish tax bill for one mall parcel and $57,000 for another, according to a tax sale records. When interest and penalties are factored in, Kohan owes approximately $320,000 for 2019 taxes.

But when the Jefferson Parish Sheriff’s Office investigated the 2019 default of one of the parcels — essentially the former Macy’s anchor spot at the north end — they found unpaid taxes and interest from 1992 that total another $480,000, the records show. Kohan didn’t own the mall in 1992, but is on the hook for the unpaid taxes, according to the Sheriff’s Office, which collects the taxes.

Because of the unpaid taxes, the two mall parcels came up for tax sale in August and September. There were no bidders, so the tax sale title transferred to Jefferson Parish government. Kohan has three years from the Sept. 2 date of the transfer to pay the tax bill and penalties to redeem the property. If the company takes no action, the parish could auction the property to recoup its tax loss.  

The developments are another blow to The Esplanade, which, like malls all around the country, had struggled even before the pandemic. Opened in the early 1980s, the mall became a hub of activity in north Kenner and was a sales tax juggernaut. The mall featured restaurants, a food court, a host of popular stores and, over the years, crowd-drawing anchors such as Dillard’s, Mervyn’s and Macy’s. 

But in recent years, malls across the U.S. (Metairie’s Lakeside Shopping Center being a notable exception) have falled on hard times, suffering from a wave of store closures. The Esplanade was no different. Kenner officials sought to bolster its sagging fortunes, at one point even discussing whether to house some City Hall offices in the vacant Macy’s store.

Several malls across the region have been the focus of redevelopment efforts. In Metairie, for instance, the Clearview Mall is set for a makeover that includes a 270-unit apartment complex, Ochsner Health center, outdoor event space and new retail outlets. And in Slidell, city officials have pushed the owner of the once-bustling North Shore Square mall to redevelop the moribound space.  

The Esplanade still has a Target, a Dillard’s, Bath & Body Works and other longtime mall staples like Footaction and Spencer’s, according to its online directory.

When Kohan bought the mall in 2018 for $9.25 million the Macy’s anchor was gone and many other spots were empty. Nevertheless, Mike Kohan and his company’s reputation for revitalizing distressed malls inspired some confidence. 

“It needs attention, and we’ve got to get our hands around it sooner rather than later,” Kohan said at the time. “I believe that we are going to be able to turn this mall around, hopefully in a short period of time.”

Kohan did not return a message Wednesday for comment.

Kenner Mayor Ben Zahn said Kohan is in arrears with the city, as well.

The firm owes $14,707 in Kenner property taxes for the Macy’s parcel and $62,416 on other parcels at the mall, a city spokesperson said. There is another $43,788 in city property taxes and interest of $129,305 from 1992. The city is researching whether that could be collected, the spokesperson said. 

Zahn said the pandemic put the already struggling mall deeper into trouble.

“When I came in I think it was hanging by its fingernails, but now with COVID I think it’s on life support,” he said. The tax problems are not a surprise, he said.

“It’s challenging to work with the mall owners,” he said “It doesn’t seem like it’s important to them.”