Mall, tenants attempt to navigate mass shutdowns of retail sector

Retailers face 'crushing' blow

Shopkeepers at Kelowna’s Orchard Park Shopping Centre say they remain on the hook for rent, despite foot traffic dropping to near zero as stores close due to the coronavirus pandemic. 

Castanet News has heard from tenants at the mall who say they face “crushing” rent payments while their shops are closed, but the mall stays open for a very small handful of businesses that are pushing on.

Store owners say the mall has declined requests for rent deferrals or abatements, while Orchard Park’s parent company, Primaris, says they are working on a case-by-case basis. 

It’s a challenge playing out across the country as commercial landlords, in the span of two weeks, attempt to grapple with the mass shutdown of the retail sector.

“Our economy is in crisis and we deeply appreciate the hardship confronted by many of our retail partners,” said Patrick Sullivan, Primaris Management chief operating officer in a statement to Castanet.

“We do not take our commitment to them and our communities lightly and are working to support both during this unprecedented and dynamic situation.”

Earlier this week the provincial government promised $2.2 billion in economic aid directed at businesses to deal with the pandemic's economic fallout. Provincial school tax tax rates for commercial properties were cut in half for 2020, something Finance Minister Carole James said she expects will be passed onto tenants by commercial landlords. 

Primaris, however, says more help is needed for the industry. 

“We had hoped to have more feedback from government prior to the end of March, but that has yet to materialize,” Sullivan said, adding he anticipates more aid is on the way to support the one-in-seven Canadian jobs in retail.

Sullivan pointed to the City of Toronto’s 60-day deferral of business property taxes as an example of something that “allows us to better support our tenants in this time of need.”

Last week on Facebook, Orchard Park encouraged the public to write to their government representatives on their concerns about non-essential retailers not being ordered to close in B.C.

Orchard Park retailers tell Castanet many stores have been turned down for rent deferrals, but a few have received them. The rejected tenants say mall management provided little explanation as to why their requests were refused with multiple stores receiving similar letters.

Sullivan says they are working with retailers on a case-by-case basis.

“We believe a general rent assistance program for qualified tenants cannot replace the effectiveness of direct dialogue and action,” Sullivan said, adding they remain “empathetic” to their tenants’ needs. 

“These discussions are ongoing and will continue over the coming weeks and months as this crisis unfolds.”

Orchard Park Shopping Centre remains open Monday through Sunday 12 p.m. to 5 p.m., but says “most stores are closed” and shoppers should call ahead to any stores they may want to visit.

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