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The events of the past few days have shaken not only the retail world, but also that of some Burnaby workers.
On Saturday, the nearby Coquitlam Center served an eviction notice to Hudson’s Bay Co. for default on its rent, closing the shop for five days until a tentative order to re-enter the site was granted. This follows more lawsuits across Canada as shopping malls say they didn’t receive rent during the COVID-19 pandemic.
This is extraordinary news for a company that has been operating in Canada for 350 years.
The Bay operates two locations in Burnaby, one in Lougheed Town Center and one in Metropolis in Metrotown.
The NOW spoke to workers at both Burnaby locations after the Coquitlam store closed, but before it reopened on Wednesday. They were granted anonymity because staff fear for their work.
“We’ve all just had our world rocked,” said a Burnaby worker. “We’ve heard all this bad news, but when a store closes so close to us, it really hits us. I wonder how long I will have a job. “
The NOW asked the Bay to comment on whether it paid the rent at the two Burnaby locations during the pandemic, but received no response within the deadline.
“This is a good place to work,” said another worker. “I like our clients and my colleagues. These have been difficult months. Let’s just hope things get better soon. All we can do is our best. “
“I try not to think about it,” said another worker. “Smile and keep moving, but when you feel the rent is not being paid, you worry.”
The Coquitlam HBC office could only reopen following a ruling issued by the BC Supreme Court.
In his ruling, Judge Shelley Fitzpatrick ordered the iconic retailer to pay 50% of the rent owed to the owner and 50% of the rent in the future. The other half of the unpaid and future rent will have to be placed in a trust fund held by HBC’s lawyers until the matter is resolved in the new year. “Hudson Bay is grateful that the British Columbia Supreme Court has recognized the extraordinary challenges of the pandemic world and how the burden can be shared fairly and legally,” HBC President and CEO Ian Putnam said in a statement. written. “Most major Canadian landowners share this view and have reached mutually acceptable agreements with us.”
Morguard Investment Inc., which operates the mall and its subsidiary Pensionfund Investment Ltd., was not immediately available for comment.
HBC has been in the Coquitlam Center since 1979 and for the past 41 years it claims to have never failed to pay rent. But that all changed when the pandemic hit in March.
On March 17, HBC closed its 120 stores across Canada. Court documents show the store’s sales bottomed in April at less than 1% of 2019 levels. And while this has improved slightly as the summer progressed, October sales remained at around 42. % lower than last year’s monthly total.
The retailer just celebrated its 350th anniversary, but despite its resilience, the pandemic has put a strain on the company’s profitability and this isn’t the first time HBC has refused to pay the rent.
Court records show the company has leases worth $ 20 million per month and paid no rent to eight owners in Ontario, Quebec, British Columbia and Florida.
The legal controversy highlights the challenges facing both business owners and retailers as foot traffic in brick-and-mortar stores continues to slow after widespread closures last spring.
It is not yet clear how the lease in Coquitlam will turn out.
In arguments echoing a similar case against another Toronto area mall, HBC says the Coquitlam Center failed to maintain a “first class” mall as stated in the lease.
This includes not upgrading the HVAC system to reduce COVID-19 transmission, improving pedestrian control, upgrading bathrooms, and increasing the number of people responsible for health and safety in the mall, says HBC.
HBC added that the owner has not provided “an environment that attracts a substantial number of customers and encourages them to stay in the center for an extended period of time” nor has he taken steps “to properly market the mall to respond to COVID-19. . “
According to court documents, HBC says that by terminating the lease and taking control of the Coquitlam Center retail outlet, the owner did not give notice, putting 106 employees “at risk”.
“COVID-19 is a once-in-a-century kind of event,” read court documents filed this week. “It was as unexpected as it was economically disruptive.”
HBC says it should not pay the rent until the owner has resolved the alleged violations, or that it should be compensated for its lost sales due to those violations.
Eventually, Judge Fitzpatrick’s Interim Order ruled that both parties should bear a portion of the financial fallout until the case can be heard in full.
The provisional order will expire on January 22, 2021, unless HBC obtains a renewal of the order that allows for further relief or a more permanent solution is found.
As the litigation progresses, Putnam said the company “will continue to demand a fair share of the burden of the pandemic with respect to this contract and each of the other leases across the country.”
- With files by Stefan Labbe, Tri-City News
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