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HARLINGEN — After about three months on the block, the struggling Valle Vista Mall appears to be closing in on a sale.
At Kohan Retail Investment Group offices in Great Neck, N.Y., owner Mike Kohan said he’s got information a buyer’s waiting to sign a contract.
“I heard that, too,” he said during an interview. “I don’t have all the details. I don’t know to what level.”
Back taxes
In February, the mall, sprawling across 60 acres, was up for sale.
At Coldwell Banker’s McAllen office, broker Daniel Galvan, who’s handling the sale, could not be reached for comment.
While the Kohan Group, a specialist in buying and upgrading struggling mall properties, has worked to draw new tenants, the Cameron County Tax Office’s records show Valle Vista Mall owes $335,839 in property taxes for the 2022 tax year, while incurring $43,659 in late fees.
Drawing tenants
Across the country, the Kohan group has purchased more than 20 malls, with its business plan aimed at upgrading the properties while financially stabilizing them.
When the company bought Valle Vista for $12.5 million in 2018, the mall’s vacancy rate was running at about 25 percent.
Since then, the Kohan group’s worked to cut vacancies to about 15 percent.
Today, J.C. Penney stands as Valle Vista Mall’s big retailer, the last of its original anchors.
As part of Kohan’s business plan, the mall began drawing entertainment venues such as Urban Air Trampoline Park, which opened in 2019.
That year, Ollie’s Bargain Outlet began negotiating to buy the former Forever 21 space.
Then in 2020, a Dallas-based company buying former Sears’ mall spaces bought 90,000 square feet.
By 2021, BH Properties, a major real estate developer, bought a 106,000 square-foot space which once housed the mall’s flagship Dillard’s store.
Soon, California-based Prime Healthcare, which operates Harlingen Medical Center, Knapp Medical Center in Weslaco and Mission Regional Medical Center, opened back-office operations across 20,000 square feet.
Then in late 2021, TaskUs, a business service company, opened offices there, hiring about 1,000 workers.
Changing times
Opening in 1983, Valle Vista Mall stood for decades as the area’s premier retail mecca, drawing shoppers from across much of the Rio Grande Valley.
But for years, the mall, amid changing consumer buying patterns and online shopping trends, was losing big-name tenants.
By 2002, construction of the Expressway 77-83 interchange blocked traffic to the mall, driving many shoppers to north Brownsville’s growing retail district.
Then in 2008, city officials 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.
Background
By 2017, Washington Prime Group, unable to sell the mall, dumped the property back on lenders who had financed its sale with a $40 million loan, while the Washington group continued to own $27 million.
At that point, ProEquity Asset Management Corp. took over the mall’s management before the Kohan group purchased the property.
