Times Colonist

Coquitlam Hudson’s Bay reopens, but ordered to pay some of its rent


Hudson’s Bay Co. has been granted an interim order to re-enter its Coquitlam Centre location days after it was served an eviction notice for defaulting on its rent.

Five days after the Coquitlam HBC location was shuttered, it reopened for business following a ruling handed down by B.C.’s Supreme Court.

In her ruling, Justice Shelley Fitzpatric­k ordered the retailer to pay 50% of the rent it owed to the landlord and 50% of rent going forward. The other half of unpaid and future rent is to be placed in a trust fund held by HBC’s lawyers until the matter is resolved in the new year.

“Hudson’s Bay is grateful that the Supreme Court of British Columbia has recognized the extraordin­ary challenges of the global pandemic and how the burden can be shared fairly and lawfully,” HBC president and CEO Ian Putnam said.

“The majority of Canada’s leading landlords share this view and have reached mutually acceptable agreements with us.”

Morguard Investment Inc., which runs the mall and its subsidiary Pensionfun­d Investment Ltd., was not available for comment.

HBC has been at the Coquitlam Centre location since 1979. In the past 41 years, it claims to never have missed a rent payment. But that all changed when the pandemic hit in March.

On March 17, HBC closed its 120 stores across Canada, including at Coquitlam Centre. Court documents show that the store’s sales bottomed out in April to less than one per cent of 2019 levels. While that improved slightly in the summer, by October, sales remained about 42% below last year’s monthly total.

The retailer has just celebrated its 350th anniversar­y, but despite its staying power, the pandemic has strained the company’s viability.

Court records show the company has leases valued at $20 million a month and hasn’t paid any rent to eight landlords across Ontario, Quebec, British Columbia and Florida.

The legal wrangling highlights the challenges facing both commercial landlords and retailers as foot traffic in brickand-mortar stores continues to lag after widespread closures last spring.

How the terminatio­n of the lease in Coquitlam will play out is not yet clear. In arguments that echo a similar case against another Toronto-area mall, HBC claims Coquitlam Centre has failed to maintain a “first-class” shopping centre as stated in the lease.

That includes not upgrading the HVAC system to reduce the transmissi­on of COVID-19, improving pedestrian control, upgrading washrooms and increasing the number of people responsibl­e for health and safety at the mall, HBC claims.

HBC said the landlord did not to provide “an environmen­t that attracts substantia­l numbers of customers and encourages them to stay at the centre for an extended period of time” nor had it taken steps “to adequately market the shopping centre to respond to COVID-19.”

According to court documents, HBC claims that, in terminatin­g the lease agreement and seizing control of the Coquitlam Centre retail location, the landlord failed to give notice, putting 106 employees “at risk.”

“COVID-19 is a once in a century type event,” reads court documents filed this week.

“It was as unexpected as it has been economical­ly disruptive.”

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