Some restaurateurs get rent relief, while others stress over April bills
Grace An nearly cried after the landlord for her downtown Toronto restaurant called with a compromise: pay half the roughly $5,000 rent in April and May, and pay back the other half over time when business, hopefully, returns to normal.
“This will stretch it out for me to not file for bankruptcy in like a month or two, or not make me empty my own savings to keep the business,” she said.
Some small and large landlords are extending help for their restaurateur tenants, many of which have been forced to shut down as COVID-19 cases spread across Canada. But not all eatery owners have been so lucky and those without landlord support want more government intervention to avoid mass closures due to unpayable bills.
An, who has owned Buna’s Kitchen for more than six years, noticed business slowing at the start of February. Her eatery mostly serves business people from nearby office buildings and is only open for lunch on weekdays.
As offices shifted to work-from-home setups, walk-in traffic slowed. An switched to take-out only, but those orders dried up too. Last Tuesday, she decided to close completely.
But April edged closer and so did her the due date for thousands in rent. An emailed her landlord to let them know she could cover next month’s rent, but after that? Unclear.
“I was hoping for their understanding to whatever that’s going to happen in the future.”
About a week passed. Then, the phone rang.
The landlord offered some flexibility. They asked for half of April and May rent when those are due, and the remainder to be paid back later on by tacking an extra couple hundred to future monthly rents.
An declined to provide the name of her landlord, who she said declined a request for comment for the story when she asked.
“I just hope, maybe, this can encourage other landlords to be kind,” she said, especially to small restaurant tenants.
Some other restaurant owners received similar reprieves in the days leading up to April 1.
First Capital REIT announced a $30-million program to help its qualifying small business tenants defer some or all of their rent for the next two months. The company’s portfolio includes many restaurants.
“Small businesses play such an important role in the thriving neighbourhoods in which we invest,” said CEO Adam Paul in a statement. “Many of these businesses are also among the most impacted by the COVID-19 pandemic.”
The program aims to help them “in this very difficult time,” he said. First Capital did not immediately respond to questions.
Walmart Canada took the matter a step further and forgave the next two months of rent payments to its tenants, which include hair salons and eateries. The company has more than 400 stores in the country with about one to two tenants each.
“I think we know that we’re in extraordinary times right now,” said Robert Nicol, vice-president of corporate affairs.
But these acts are limited and not all restaurants received the same reprieve as April nears.
John Ciampini co-owns two restaurants in Toronto that he manages with his wife Nicole Tomchuk. They’re confident one landlord will work with them, but they fear the one for their established Alleycatz Restaurant Lounge will be less understanding.
Rents for the two locations add up to about $40,000 monthly and the couple is “biting the nails,” said Tomchuk, knowing they’ll have to reach out to ask for some kind of arrangement soon.
Even a rent deferral wouldn’t eliminate their problem completely, they said.
“How are we ever going to catch up?” asked Ciampini, explaining it may take a long time to build the businesses up again and people may not be quick to overcome fears about going outside to crowded spaces.
“The only relief we can really get is something in the form of a grant,” he said.
They understand landlords, too, are in a tough position and don’t want to pass on their financial struggle, but they hope the government will step in to help tenants and landlords survive.
Restaurants Canada, a national foodservice industry association, has called for provincial governments to take evictions of restaurant tenants off the table until governments and stakeholders create solutions that will work for all parties.
“I closed my doors not because I didn’t put enough work into it, not because I didn’t advertise enough,” said Ciampini but because he wanted his staff and customers to be safe, and followed provincial government directives.
“If I’m taking a hit and I’m sacrificing, then you landlords have to sacrifice too,” he said, adding they shouldn’t make profits during the pandemic.
“Why should you not have to sacrifice?”
This report by The Canadian Press was first published March 28, 2020.