NEW ULM - The shutdown of the Marktplatz Mall due the City of New Ulm turning off its utilities was averted Monday when the outstanding utility bills were paid, according to Assistant City Attorney Tom Borgen.
The City had planned to turn off power and water to the mall due to $4,000 owed against New Ulm Retail and Development LLC. (NURD), which owns the northern portion of the mall. City officials claim the money owed is part of a larger utilities debt going as far back as late 2011.
If the utilities had been shut off, the businesses operating in the mall would have been closed in compliance with City and state regulations. The closures would have included Little Rascals day care, which hosts 102 children for 63 families, and possibly even the Herberger's store.
Randy Danielson, who owns the southern portion of the mall through SEK Financial, LLC., confirmed he paid the $4,000. City officials are not allowed to disclose the information due to privacy regulations, but other sources confirmed Danielson made the payment.
"I did it because we have to keep the mall running," said Danielson, "But, it's about time the mall comes under one ownership, one way or another."
Mike Strand, one of the individuals running NURD, said he was glad Danielson paid the bill to prevent a shutoff. However, he reiterated his point that he believes Danielson and the City were in the wrong from the start.
Strand claims that NURD had a payment agreement with the City of New Ulm for outstanding utility bills in October and that the City changed the amount owed months later. He claims that because of this, NURD should never have been held liable for the $4,000 and the City should have never threatened a shutdown.
The City claims the amount has been the same the entire time and no agreement was finalized with NURD.
Strand said last week he would be willing to see the mall closed over the dispute with the City. Because the utilities were paid, he said that NURD hasn't made any final decisions on whether it will continue its dispute with the City.
"Either way, we're glad the shutoff didn't occur," said Strand.
Strand also claims Danielson should have been paying the utilities the entire time because he collects the rental payments on the NURD side. At the same time, he claims Danielson doesn't have the legal rights to the rentals and hasn't provided documentation of how rental fees have been used.
Danielson owns the first mortgage on NURD's portion of the mall, which he purchased when it went into default. He gained the rights to the mall rentals through the purchase and resulting forbearance agreement.
When negotiations between NURD and Danielson went sour last year, NURD filed bankruptcy in response to Danielson's threats of foreclosing on the mortgage. NURD gained temporary control of the November and December rental payments during the bankruptcy proceedings. Eventually, the court appointed an interim court official to oversee the rental payments until it cancelled the bankruptcy, which lasted January to April.
Danielson claims he regained the rental payments just last month and that NURD used up all the few payments it received.
Strand denies the claims and maintains that Danielson should have been responsible for the payments.
"This situation should have never happened," said Strand.
(Josh Moniz can be e-mailed at email@example.com)