Penticton shopping centre and the Bay embroiled in pandemic-related rent dispute

The Bay is in a rent dispute with Cherry Lane Shopping Centre in Penticton. Courtesy: Google Maps

Penticton’s Cherry Lane Shopping Centre is trying to evict the Bay for allegedly owing more than half a million dollars in rent.

Meanwhile, the Hudson’s Bay Company (HBC) is claiming that its landlord has refused to adopt proper pandemic safety measures.

According to court documents, the store on Penticton’s Main Street pays $78,036 a month in rent.

However, in a court petition, Cherry Lane Shopping Centre alleges that the store hasn’t paid rent since April.

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The shopping centre claims it has delivered several notices of default to the Bay.

According to the court petition, the store now owes $546,255 in rent. The shopping centre also claims that the Bay owes thousands of dollars more in annual real estate taxes.

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The shopping centre says the Bay has now been served a notice of termination and demand for possession.

“Since November 10, 2020, the tenant has been in wrongful possession of the premises and refused to vacate the premises,” Cherry Lane Shopping Centre says in its court petition.

However, in a civil suit filed against its landlord, the Bay claims that the shopping centre is expected to provide a high-class environment that attracts a substantial number of customers and encourages them to stay for an extended period of time.

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The store alleges that when the pandemic hit, its landlord failed to make any meaningful upgrades to reduce the risk of COVID-19 transmission in the shopping centre.

The Bay claims Cherry Lane should have upgraded ventilation and air filtration, improved pedestrian controls and brought in safety features such as touchless doors and bathroom fixtures.

It also failed to conduct the necessary marketing to address customers’ concerns and encourage them to return to the shopping centre, according to the Bay’s civil claim.

The shopping centre claims in court documents that it has adopted the requisite health and safety standards and exceeded the requirements in many areas.

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It also says it has undertaken significant marketing initiatives over the last several months to get people to return to the shopping centre.

The Bay notes in its lawsuit that its store initially closed around March 17, although the shopping centre was still technically open.

“The landlords insisted on the payment of full rent when the value of the spaces they were providing had drastically declined,” the Bay says in its civil claim.

“The landlords were thus requiring their tenants to disproportionately and unfairly bear the entire risk and burden of the pandemic.”

Read more: Landlords sue Hudson’s Bay for unpaid rent at multiple Quebec locations

The store claims that the court should intervene under the Law and Equity Act and is asking for a declaration that its landlord is in breach of the lease agreement.

It’s also asking for a rent abatement.

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According to court documents, sales at the Bay in Penticton dropped more 99 per cent from more than $1 million in April 2019 to $4,634 in April this year.

The store currently employs 66 people and is in the process of hiring another 22 workers for the holiday season.

“All of these people will lose their jobs if the store is terminated,” the Bay says in its lawsuit.

In response to a Global News inquiry at Orchard Park Shopping Centre regarding the store’s status in Kelowna, marketing manager Vikki Webster said the Bay is a long-standing and valued tenant.

“They are in good standing with respect to their lease obligations,” she said.

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