Valle Vista pays $434,843 in back taxes

A loan company now holds a lien on Valley Vista Mall after its owner had to borrow money to pay off back taxes. The former Sears section of the mall is now for sale to repay the loan. (Maricela Rodriguez/Valley Morning Star)

HARLINGEN — The struggling Valle Vista Mall turned to a loan company to pay its delinquent property taxes.

Home Tax Solutions has paid $434,843 in taxes the mall owed for the 2019 tax year, records show.

As part of an agreement, the loan company is holding a lien on the mall property, loan officer Mary Helen Moore said from offices in Dallas.

Mall owner Mike Kohan, who said the back taxes have been paid, declined further comment.

Now, the mall owner is selling the property’s former Sears section to repay the loan, City Commissioner Frank Puente said.

“The owners of the mall are selling a portion of the property for a restaurant interested in coming to Harlingen,” Puente said.

Puente said the mall’s owner plans to use the money to pay off Home Tax Solutions to release the lien.

In April, City Manager Dan Serna said the Linebarger, Goggan, Blair & Sampson law firm was trying to collect the back taxes — of which more than $131,000 was owed to the city.

The remainder was owed to Cameron County, the Harlingen school district, the Port of Harlingen and South Texas school district.

On a total of 60.6 acres, the mall’s gross value stands at $20.8 million while its land value is set at $4.28 million, according to the Harlingen Tax Office.

Meanwhile, records show improvements are valued at $16.5 million.

Owner’s purchase

In 2018, Kohan, of Kohan Retail Investment Group in Great Neck, N.Y., purchased the 651,000-square-foot mall for $12.5 million following its placement on a real estate auction block after ProEquity Asset Management Corp. managed the property.

In 2017, Washington Prime Group turned over the property back lenders, citing profits had not met expectations.

Soon after his purchase, Kohan said he owned 22 malls, some “distressed.”

At the time, he said he planned to stage entertainment and events to help draw traffic to the mall.

A loan company now holds a lien on Valley Vista Mall after its owner had to borrow money to pay off back taxes. The former Sears section of the mall is now for sale to repay the loan. (Maricela Rodriguez/Valley Morning Star)

Changing times

For years, the mall had been losing big-name tenants.

In 2017, Payless ShoeSource, rue21 and RadioShack closed.

At about the same time, Forever 21, which opened in 2009, replacing Mervyns, shut its doors.

By then, about 25 percent of the mall’s retail area stood vacant.

Later in 2018, Dillard’s, the mall’s flagship store, announced plans to serve as a clearance center.

Soon after, Sears, which had filed for bankruptcy, announced it was closing its store, which had stood as one of the mall’s original anchors.

Background

In 1983, Valle Vista Mall opened as the area’s premier shopping mecca, drawing residents from across much of the Rio Grande Valley.

By 2002, the construction of the Expressway 77-83 interchange blocked traffic to the mall, driving many shoppers to north Brownsville’s growing retail district.

For years, the mall has struggled amid changing consumer buying patterns and online shopping trends.

In 2008, the city offered the mall more than $1.2 million in incentives to help Simon Property Group, the management company which brought the mall to town, upgrade the property.

fdelvalle@valleystar.com