Former council tenant upset over failed business deal
The owner of a co-working business whose lease of council office space ended without any rent being paid has hit back at claims they had been left thousands out of pocket.
In May last year it was announced the New Plymouth District Council had reached an agreement with local businessman Adnan Belushi to move Johnson Corner into the second floor of the Civic Centre, where it began operating in October.
However, the lease was terminated in January, with the council claiming they had not received a single rent payment and were one of a number of creditors seeking money from Belushi.
But on Thursday, the businessman said the council was actually still collecting money from tenants he had signed up to the office space and who had stayed on after the lease was terminated.
“To claim that NPDC will be losing money is false,” Belushi said.
“We have handed over an operation that is earning $132,000 in annual revenue, this is more rent than what we were meant to pay NPDC in year one.”
Selected emails sent to the Taranaki Daily News from Belushi outline how the council agreed to a number of compromises in a bid to help establish the business and let it continue operating on the second floor of the centre.
They included not chasing more than $42,000 in outstanding rent which had gone unpaid since October 1.
In an email from council property manager Catherine Croot, Belushi was asked to provide evidence that the business was viable long-term before it could consider wiping off the debt to help his financial position. It was also revealed Belushi made a number of attempts to cut costs in the lead up to him closing the business, including reducing cleaning of the office space, returning furniture from meeting rooms, renting out car parks and reducing rental rates to prospective tenants in order to save enough money to pay suppliers and contractors. The majority of the outstanding debt accumulated from the set-up costs for the 911sqm space.
While the council painted the office space, put down new carpet, installed new LED lights and replaced ceiling tiles as part of the lease, Belushi ran up debts of more than $150,000 doing his own improvements.
It’s part of that debt that has upset the businessman, who also operates Johnson Corner sites in Wellington and Auckland.
He continues to claim council should foot the bill for the outstanding debt to two suppliers because it was gaining financially from the remaining tenants Johnson Corner had attracted.
As well as accusing council of profiting at his expense, Belushi also claimed he lost a number of potential clients because the seismic rating of the Civic Centre was lower than he was led to believe.
In an earlier statement, council revealed that while the primary structure of the area leased was 60% of National Building Standards, the overall rating was 34% due to stairs being the lowest scoring element.
“That doesn’t mean the building is unsafe and shouldn’t be occupied,” a spokesperson said.
While Belushi admitted he had made a mistake not getting written confirmation of the building’s seismic rating or including any references in the lease for the council to improve the rating, he maintained it should have been an issue treated with more urgency. “We immediately raised this concern with NPDC and stated that it will have severe implications to our revenue and that it should be resolved immediately or our deal structure to be reviewed to reflect the poor condition of the building,” he said.
“They failed to commit to a time line and said it will be fixed in 18 to 24 months.”