Two Hudson91裸聊视频檚 Bay Co. landlords are suing the retailer for unpaid rent, alleging the iconic department store that anchors shopping malls across Canada hasn91裸聊视频檛 paid its bills at multiple locations since April.
The lawsuits, filed in Quebec Superior Court by Cominar Real Estate Investment Trust and Oxford Properties Group and its co-owners, are seeking so-called safeguard orders compelling HBC to pay rent.
The companies say in court documents that HBC owes more than $3.5 million in rent and other fees at five Quebec shopping malls, an amount that continues to climb by more than half a million dollars each month.
In an affidavit filed in response, Ian Putnam, president and chief executive officer of HBC Properties and Investment, said the company has been trying to reach a mutually acceptable solution with the landlords that recognizes COVID-1991裸聊视频檚 91裸聊视频渄ramatic impact91裸聊视频� on retail.
91裸聊视频淗BC still hopes to arrive at a reasonable resolution,91裸聊视频� he said in court documents filed Wednesday.
91裸聊视频淏ut their demand that HBC pay the entirety of the rent ignores the fundamental change in the nature of these properties,91裸聊视频� Putnam said, adding that they are no longer the 91裸聊视频渇irst class91裸聊视频� malls HBC bargained for.
The legal wrangling highlights the challenges facing both commercial landlords and retailers as foot traffic in brick-and-mortar stores continues to lag after widespread closures last spring.
With the second wave of the pandemic intensifying, the coming months could see more disputes emerge as shoppers turn to e-commerce instead of local shopping malls ahead of the busiest shopping season of the year.
Oxford Properties said the ongoing loss of rent from an anchor tenant could be crippling for its shopping centres, suggesting the retailer also has unpaid bills outside Quebec.
In court documents, the company said that while HBC continues to pay rent 91裸聊视频渦nder protest91裸聊视频� at three of its shopping centres, it91裸聊视频檚 withholding rent at eight other locations.
The company91裸聊视频檚 portfolio of malls includes the Yorkdale Shopping Centre in North York, Ont., the Square One Shopping Centre in Mississauga, Ont., and the Southcentre Mall in Calgary, Alta.
91裸聊视频淗BC91裸聊视频檚 aggregate indebtedness to the landlords of the Oxford Shopping Centres 91裸聊视频� is extremely large and growing at an alarming rate,91裸聊视频� Oxford Properties said in court documents.
Oxford Properties, which is the real estate subsidiary of OMERS, added that an inability to collect the amount owing from HBC would cause 91裸聊视频渋rreparable harm.91裸聊视频�
Meanwhile, Cominar is threatening Hudson91裸聊视频檚 Bay with eviction from its three Quebec properties in addition to seeking unpaid rent.
Cominar claims in court documents that HBC owes $603,169 in rent at the Rockland Shopping Centre, $662,490 at the Champlain Mall and $144,393 at the Centre Laval.
Oxford Properties claims the retailer owes $1.4 million in overdue rent at Les Galeries de la Capitale and $875,680 at Les Promenades Gatineau.
The landlord also alleges that HBC has made it clear it has 91裸聊视频渘o intention of paying any rent in the foreseeable future.91裸聊视频�
91裸聊视频淚t appears that HBC91裸聊视频檚 true intention is to take advantage of the current challenging times to occupy and carry on business from the leased premises rent-free as long as possible,91裸聊视频� Oxford Properties said.
91裸聊视频淗BC is attempting to use the pandemic as a pretext to unjustly enrich itself at the expense of the landlord.91裸聊视频�
Daniel O91裸聊视频橠onnell, a spokesman for Oxford Properties, said although the landlord is willing to share the financial burden of COVID-1991裸聊视频檚 impact, HBC has ignored 91裸聊视频渕ultiple requests to enter into a constructive dialogue to find a mutually agreeable arrangement.91裸聊视频�
He said HBC91裸聊视频檚 continued refusal to pay any rent 91裸聊视频� despite being open for business 91裸聊视频� pushed the company to pursue legal action.
But in his affidavit, Putnam said the allegation that HBC has simply refused to pay rent while also refusing to engage in good faith negotiations is 91裸聊视频渃ompletely false.91裸聊视频�
91裸聊视频淗BC is committed to arriving at a reasonable resolution with Oxford,91裸聊视频� he said. 91裸聊视频淚t is not HBC91裸聊视频檚 intent to continue operating its stores without paying any rent.91裸聊视频�
Part of the issue for HBC is the current state of the malls it anchors.
James Tate, a retail market analyst retained by HBC legal counsel, said in an affidavit that the landlord 91裸聊视频渋s not delivering a first-class suburban regional centre in terms of customer traffic and opportunity for HBC.91裸聊视频�
He said Oxford Properties has not consistently provided the elements required for a 91裸聊视频渇irst class suburban regional shopping centre,91裸聊视频� including a place to shop, eat and socialize that is perceived as a clean and safe.
Diane J. Brisebois, Retail Council of Canada president and CEO, said it91裸聊视频檚 disappointing the landlords decided to take the issue to court.
91裸聊视频淭he case could set a precedent that91裸聊视频檚 damaging to the retail sector,91裸聊视频� she said. 91裸聊视频淚t91裸聊视频檚 unfortunate it had to come to this. Having huge anchor stores disappear from malls is a recipe for disaster.91裸聊视频�
Citing shifting consumer behaviour, HBC said earlier this month it would permanently close its Winnipeg store in February 2021.
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Brett Bundale, The Canadian Press
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