A total of more than 61 acres of the Eastland Center site, seen here in September, has been sold to New York-based Kohan Retail Investment Group.

A total of more than 61 acres of the Eastland Center site, seen here in September, has been sold to New York-based Kohan Retail Investment Group.

File photo by Deb Jacques

New owner hopes to improve Eastland Center

By: Brendan Losinski | Advertiser Times | Published December 3, 2018


HARPER WOODS — The city of Harper Woods has revealed the identity of the buyer of Eastland Center, which was put up for auction Oct. 9-11.

The new owner was identified as the New York-based Kohan Retail Investment Group. It paid a $3.125 million bid for a 640,000-square-foot chunk of the mall, which includes the majority of the retail space, although not separately owned properties such as the sites of Lowe’s and Home Depot, and the former sites of Macy’s department store and Target.

“We are happy to be a part of the community; we are a shopping mall and retail holder, and we have malls all over the country,” said Kohan Retail Investment Group Principal Mike Kohan. “We purchase malls that have suffered in recent years, and we are trying to bring momentum back to the (Eastland) mall. It’s impossible to bring it back to where it was before, because the retail landscape has changed, but it’s possible to have some success in replacing the vacant spaces and revitalizing the site.”

The mall has been in decline for several years with many of its anchor stores closing their doors and leaving the mall, including Sears, Burlington Coat Factory, Macy’s and Target. Many in Harper Woods have hoped for new investment in the property to improve its future prospects and bring new tax revenue into the city.

The sale was for 61.1 acres of land, which encompasses approximately 641,375 square feet of floor space. City officials expressed their relief at seeing new owners of the property and are hoping for a fruitful relationship.

“Right now, we have just established a conversation with them,” said Harper Woods City Manager Joe Rheker. “I spoke with Mr. Kohan to start breaking the ice and start getting to know each other. We have got to get more familiar with each other, build a relationship and talk about what the market can bear.”

Kohan said his firm wanted to invest in the property because it saw potential for growth.

“It was less about it specifically seeming attractive, and was more about what was offered to us,” Kohan explained. “We took a look at it and saw it as an opportunity. There was room for growth. We have to spend money on infrastructure and improvement, but we could have the mall thrive. An improvement of 20 or 30 percent of occupancy, that would be considered a success.”

Both Rheker and Kohan said it is too early to discuss specific potential plans for the mall property. Kohan said attracting more retailers is going to be their first priority, but they are looking at alternative plans for the property as well.

The city of Harper Woods has floated the idea of transforming the mall into a public-private partnership for a mixed-use development that could include relocating Harper Woods’ City Hall, the 32nd District Court and Harper Woods’ Department of Public Safety offices to the Eastland Center site. This also could involve further retail or other business development alongside such moves.

“(Kohan) is aware of the (public-private) plan we had previously developed and had kicked around entertaining something like that. We have not gone into it in any depth yet,” Rheker said. “He said he is very interested in working with the community and speaking with the mayor directly. Our discussions have been positive thus far.”

The firm owns 27 malls across the United States, including two in Michigan — Midland Mall in Midland and The Orchards Mall in Benton Harbor. However, Kohan Retail Investment has been criticized for significant amounts of unpaid taxes and utility bills at other malls they have purchased, and for not delivering on promises of revitalization.

Kohan responded by saying that some investments just don’t pan out as well as can be hoped.

“When you walk into a disaster area, you can’t expect everything to go right,” Kohan said. “With Benton Harbor, for instance, it just did not have the room or opportunity for growth. No success is guaranteed. It doesn’t mean we didn’t try, but problems that we inherited from the previous owners were there. Sometimes all you can do is work hard, hope for the best and see what you can achieve.”

Rheker said the city wants to give Kohan a fair shake and is urging cautious optimism in regard to the mall.

“I haven’t sought out reports about their other investments,” he said. “They have said there is investment potential (here). We have heard from developers who have reached out to us during the auction process who were interested in developing on the site. We’re optimistic. … Harper Woods is a community that is interested in what is happening to that site. We want people to be open-minded and cautiously optimistic. Let’s give Mr. Kohan a fair shake and not immediately judge him based on past business dealings.”

Both the city and the Kohan Retail Investment Group have said they are looking forward to the partnership and have high hopes for the property’s future.

“I think the relationship with the city will be great because we both have ideas to get the mall to a place where it needs to be,” said Kohan. “I want to ask the merchants in the community to get in touch with us and discuss the possibility of coming into the mall. We want local businesses to know we want to sit down with them and talk. … It’s my pleasure to be part of the community, and we will do all we can to make the mall a destination for the community, and we will do everything we can to make this journey a successful one.”