Scarborough small businesses 'panicking' over paying the rent
As May began, small business owners in Scarborough’s plazas and malls thought about the rent and whether they could pay it.
A relief program, the Ontario-Canada Emergency Commercial Rent Assistance (OCECRA), could take care of 75 per cent, but it’s up to landlords to apply, and some aren’t.
In Huntingwood Square, a plaza on Birchmount Road, George Petrou was working seven days a week at his restaurant, Hunter’s Pizza and Souvlaki House.
Petrou, on April 30, said he’d asked his landlord, Mohamed Khan, to apply for the OCECRA, and so had other plaza businesses.
Federal and provincial contributions cover 50 per cent in the program, and landlords and tenants each pay 25.
Khan didn’t seem to care, said Petrou.
“He doesn’t want to lose a dime,” the restaurateur complained. “But it’s OK for us to lose our shirt.”
Though open for takeout, Petrou said businesses like his need a three-month break on rent, just to survive.
Khan confirmed he’s not interested in the OCECRA. “We don’t need that, and we’re not going to use that,” he said.
The landlord argued he wouldn’t be able to pay contractors or operate the property if he gave up 25 per cent of rents; that money doesn’t “go into the landlord’s pocket,” he said.
On Kennedy Road’s commercial strip south of Highway 401, Ammar Odeh, the business improvement area’s treasurer, said he’s seeing “a mixed bag of communication” on whether landlords are giving tenants a break.
Odeh owns a Telus dealership and his two full-time employees are at home, each bringing the business $2,000 a month through a new federal wage subsidy. With his landlord waiving the rent for three months apart from fixed costs such as taxes, maintenance and insurance, he said, he’s doing OK.
But some other landlords for the BIA’s 344 businesses “are not being that gracious” on rent, and some tenants aren’t even offering to pay.
“The ones that are 'wait and see' are typically not paying anything.”
Odeh said he doesn’t think property owners want their tenants to leave, but neither do they want to be in the red on debts on their properties.
All the same, he added, the city should be encouraging its commercial landlords to follow a set of rules.
There have been calls for the province to declare a commercial eviction moratorium.
“Businesses are panicking,” said John Beers, co-ordinator of the Crossroads of the Danforth Business Improvement Area in southwest Scarborough.
Beers said there’s no incentive for landlords to use the OCECRA, and suggested business owners should voice concerns with local MPs and MPPs, as “what they’re doing is still fluid.”
Scarborough-Agincourt Coun. Jim Karygiannis said he’s heard from a handful of businesses “gravely concerned” they might have to close altogether.
“I just hope that we do not lose a lot of businesses and then we become a ghost town,” he said on April 30.
Bridlewood Mall deferred rent to its smaller shuttered stores in April, and their May rent is basically deferred “until we figure it out,” said manager Josephine Kwan.
The mid-sized shopping centre on Finch Avenue is still open. With two supermarkets, Shoppers Drug Mart, Dollarama, three banks and restaurants doing takeout, full rents are still coming in.
Kwan noted governments aren’t providing certain details of the OCECRA — whether the rent is gross rent or net rent, for instance — until mid-May.
For landlords, paying 25 per cent isn’t a lot, but they still owe the same in taxes on properties, which is “a large loss,” said Kwan.
If the city cancelled property tax collection for three months, “we will give the tenants the break right away.”
Scarborough Town Centre, the area’s largest mall, said it’s committed to “supporting our tenants” during the pandemic.
“This process is being managed with each tenant individually and does include rent relief,” said Adrienne Simic, a spokesperson.
Agincourt Mall’s owners, the North American Development Group, announced a fund on March 26 to provide rent deferrals for its small retailers over April and May. A spokesperson on May 1 said company officials were unavailable to provide an update.
The OCECRA, announced April 24, would be retroactive to April 1 and cover April, May and June.
Jean Yip, a Liberal MP, said many small businesses are hurting, and it’s important the government act quickly to help Canadians, even if its relief programs like OCECRA be adjusted later.
That happened with the emergency wage subsidy, which the federal government tweaked after listening to businesses, she said.