An inspection in the fall of 2010 for the bank that held the mortgage on the mall had turned up numerous deficiencies with the building, increasing pressure on the owner, Bob Nazarian, to take action.
"The rusting steel support columns are a structural concern," the report stated.
"It is obvious the repair work to the deck has not worked."
However, Nazarian's son, Levon Nazarian, testified Tuesday that he was unaware of the report, saying his only involvement was as a real estate broker in the attempted sale of the property.
The Royal Bank, alarmed by the water-penetration problems it estimated would require $3 million to repair, had been threatening to pull the mortgage.
"I'm not trying to get the sympathy of this commission, but the stress of managing this mall put my father on insulin," Nazarian told the inquiry on his second day on the stand.
"When a son hears that about his father, I just want to get rid of it."
Nazarian, 29, admitted to portraying the condition of the building in overly positive terms in a sales brochure and in other presentations, but said it was youthful naivete rather than a deliberate attempt to mislead.
His father, he said, had spent a lot of money trying to fix the mall's leaking roof, although much of the work involved inadequate patching.
Nevertheless, a series of offers fell through — sometimes in acrimony — because would-be buyers had difficulty obtaining financing, backed out after looking more closely at the property, or wouldn't pay what the Nazarians wanted.
At one point in 2011, Nazarian signed two different sales deals at the same time, which Nazarian admitted was "unethical" but chalked it up to desperation.
Commission lawyer Peter Doody suggested the deal with the lower purchase price was designed only to get the mall's property taxes lowered and was in fact "bogus."
"No, sir," Nazarian said.
The inquiry is probing the collapse of part of the mall in June 2012 that killed two women and injured several others. Evidence to date is that decades of water and salt penetration rusted steel beams holding up the roof-top garage.
Nazarian testified he had no idea there were any structural problems with the facility.
But with the bank and mall tenants breathing down their necks, the Nazarians engaged consultants, architects and engineers.
They booted around plans for fixing the leaking roof, including putting solar panels on the parking deck and buying town land for parking so cars could be moved off the roof.
However, they balked at buying the adjacent land from the town for $55,000 — they offered $10,000 — and all the plans, which included major redesigns, went nowhere due to the cost and the Nazarians' inability to raise cash.
One consultant even slapped a lien on the mall for $23,825 for non-payment of his bill. Nazarian said the man had done "too much work."
Bob Nazarian, now 67, had bought the property from its second owner — Elliot Lake Retirement Living — in 2005 for $6.2 million, taking out a mortgage for $4.65 million.
At the end of 2010, as the Nazarians tried to come up with ways to renovate the mall, the previous owner said it would consider buying it back for $3 million but nothing came of the idea.
Nazarian continues on the stand for a third day Wednesday. His father will testify afterward, likely next week.