It is behind the Employee of the Month portrait in the mall office.
When you discover that the safe has been stolen from Slugger's, Gus will tell you that the blowtorch is behind the Employee of the Month picture in the mall office.
What you got it for: cut the padlock on the empty store (first floor next to Sizzle).
When you have to break into the empty store, Gus tells you there is a blowtorch in the manager's office (behind the plaque). Use it on the padlock, then follow the thief when he goes into the ceiling. You can use the blowtorch as you pursue him through the vents.
There are no coins used on Night watch island.
night watch island
You have to chase the crook through the vents and escalator machinery, cutting through the blocking grates with the blowtorch. When you catch him, you both plummet into the atrium fountain, where he is kayoed by Eddie the snake. For the full solution, see the related question below.
Back Lot Island (April 2013)
The padlock is used to lock the door of the shop under construction in the east wing of the mall, under the Slugger's Keepsakes shop. When you discover that the safe has been lowered out of Slugger's, go to the mall office and open the cabinet behind the wall portrait, where there is a blowtorch.
You need it to cut the lock on the empty store directly below the sports card store. You cannot get the blowtorch until you discover the safe is gone from the card store. You will also use the torch when you are chasing the thief through the vent system, to cut away the bars there.
The password to the scooter is "frost."
FROST
The word is "frost."