Gateway Fashion Mall’s Owner Faces Fraud Allegations

– September 20, 2009Posted in: Uncategorized

Renovations completed at Gateway Fashion Mall are at the heart of a fraud lawsuit filed against its owner.When Raymond Arjmand purchased the plagued Gateway Mall in 2006, it seemed like the 30 year-old center would finally get the push it needed to survive. Almost immediately after its purchase, Arjmand announced bold new initiatives to reinvent the failing center, including a multi-million dollar renovation project – the first major remodel since the center’s opening in 1979.

Last July, the owner of Joy’s Hallmark filed a lawsuit against Arjmand stating he charged tenants for common area maintenance and improvements above what was actually completed. Now, two months later, Arjmand is facing similar lawsuits at two other malls he owns in California. According to the allegations made against him, Arjmand and two business partners would inflate estimates for the cost of repair and renovation projects and then pocket the additional money.

Arjmand indeed did complete the promised renovations of the dated Bismarck mall, and in turn renamed the center “Gateway Fashion Mall”, believing the new name and look would draw higher profile stores to the center. Major cosmetic upgrades were made inside and out, and Arjmand also announced intentions to expand the mall with another anchor tenant, rumored to be Macy’s.

Interior of Gateway Fashional Mall showing some of the completed renovations.On the surface, it appears Arjmand has had good intentions to revitalize the center, but these common area improvements seem to be at the heart of the lawsuit filed against him. Is it possible he’s only making these improvements as a part of these alleged business dealings, profiting off of the improvements?

This is not the first time Arjmand has come under fire in the Bismarck region. In September 2007, it was reported that Arjmand was demanding $20,000 from the CAT busing system and a $2 million insurance policy, or else he wanted the buses to stop using Gateway Mall’s parking lot as a stop. This was definitely a clear sign of greed on Arjmand’s part, but also a sign of poor business practices as the busing system drew potential shoppers to Gateway Fashion Mall, many of whom cannot drive to the center on their own.

Beyond that, many consider Arjmand plans for the mall to be unrealistic for Bismarck-Mandan. For example, the likelihood that Macys would open a store at Gateway when its parent chose not to convert the Kirkwood Mall Marshall Fields into a Macys, instead closing the store. It also seems unlikely that other higher-end retail stores, like Nordstroms or Bloomingdales, would open in Bismarck when they primarily focus on big metropolitan areas. Even Minneapolis-Saint Paul has only a small handful of these types of stores.

Did Arjmand just purchase Gateway Mall to be another victim in his scheme of corruption? Perhaps. Or, maybe he does have a genuine interest in seeing its success. It’ll be interesting to see how this all unfolds.

Read Bismarck Tribune’s article on this topic here:
http://bismarcktribune.com/business/local/article_daaae9dc-a3c1-11de-9e06-001cc4c002e0.html

Learn more about Gateway Fashion Mall here:
http://www.bismarckpride.com/blogs/?page_id=158 

Read my blog on Conlin’s & Hallmark’s departure here:
http://www.bismarckpride.com/blogs/?p=253

Related Articles:

Tags: , , ,