Businesses plead for relief from landlords
With revenue plummeting amid virus, owners worried about being able to pay rent
Ralph Morana has been in business through the 1992 recession, the 2008 financial crisis and SARS. The Toronto restaurateur has never been as worried as he is now, in the era of COVID-19.
Along with hydro bills, taxes and line of credit payments, he’s also got rent coming due on his two restaurants April 1, including Bar Volo, which opened near Yonge and Bloor six months ago after a million-dollar renovation.
Like thousands of other small business owners across the country, he’s worried about being able to pay rent when he’s got almost no revenue coming in. While some landlords have offered rent deferrals or discounts, many others are holding tenants to the terms of their lease.
Business owners are urging governments to provide subsidies and landlords to be far more understanding.
“One of my landlords said, ‘We’re working on something.’ The other, I didn’t really hear much. And they’re a corporation,” said Morana, who’s already decided to cancel his annual Cask Days beer festival for this year. The Morana family’s Keep6 Imports is offering online beer sales, but Morana’s unsure how much longer that will be happening.
He told the landlords for Bar Volo and its sister bar Birreria Volo on College Street that the postdated rent cheque they’re holding for April may as well
have been made out of rubber.
“I told them not to bother cashing it, because it’s gonna bounce,” Morana said, adding that he’d like to see landlords offer rent deferrals or breaks to businesses who are struggling because of the global COVID-19 pandemic. He’s not, he insisted, looking for a handout.
“Give me three months without lease payments, and tack it onto the end of the lease. Please. There’s got to be some kind of deferral. I’ve got zero revenue coming in from the restaurants,” Morana said. Morana says it would be short-sighted of landlords to force struggling tenants like him to pay their full rent right now; they’d also be hurting themselves.
“Good luck finding another tenant in this economy,” he said.
Corinne Pohlmann, an executive at the country’s biggest small business association, says governments need to step in, either with rent subsidies, tax breaks for landlords, or both.
“Governments need to defer property taxes, and landlords need to pass that along to their tenants. We’d encourage everybody to use some common sense. There’s no precedent for this,” said Pohlmann, senior vice-president of national affairs at the Canadian Federation of Independent Business. The CFIB’s latest survey shows that a third of Canadian small businesses might close permanently within the month without more financial assistance.
In Toronto, the city gave 60day deferrals for business and residential property taxes. But not all jurisdictions have done the same, and Pohlmann says not all landlords are passing along the savings to tenants.
For Thomas Vecsey, who runs Concord-based framing shop Picturesque Frames Co., the fear is even more acute. Business has dried up completely.
While he’s been late with rent by a few days here and there in his 30 years in business, he has always paid in full. He was stunned when he heard back from his landlord after saying that he needed a few extra weeks to pay March rent, ordinarily due the first of the month. “We were two weeks behind and they sent the bailiffs after me and threatened to seize all my equipment,” Vecsey said.
After paying off the March rent this week, he’s facing another rent day April 1. Given what happened in March, he’s not optimistic what will happen.
He’s willing, he says, to pay back whatever rent he owes, after the crisis is over.
“Tack it onto the end. I’ll make full restitution, pay whatever interest is needed. I’m not looking for a handout, I’m just looking to survive,” Vecsey said.
Some businesses are getting a different response from landlords. At Annex Cafe Grapefruit Moon, owner Rhiannon Wicks was grateful to get an email from her landlord Wednesday morning saying that April rent would be deferred.
“We sincerely hope that this reduces any stress or anxiety that you are experiencing at this time. Take care and stay healthy,” the note from Wicks’s landlord ended.
Wicks says while she’s bringing in a small amount of revenue from takeout, it’s not nearly as much as full restaurant service would normally bring.