Avalon Mall local tenants eyeing rising rents

Daniel
Daniel MacEachern
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Owner of Mom’s Place closes doors after rent goes up nearly 100 per cent

Rising commercial rents have locally owned businesses at the Avalon Mall wary of increases
— and prompted the owner of a restaurant to close her doors.

Some local business tenants at the Avalon Mall in St. John’s are expressing concern at the hike in rental rates as leases come up for renewal. — Photo by Rhonda Hayward/The Telegram

Shirley Hong, owner of The Rice Bowl and Mom’s Place in the Avalon Mall food court, said she closed the latter restaurant at the end of January because she couldn’t afford to keep both places open after the mall almost doubled her rent, from $130 a square metre per month to $250.

“I couldn’t believe it,” she said.

Hong said she was told that the increase better reflected market rates.

Hong decided she would keep The Rice Bowl open because it has more customers, but regrets closing the door on more than three decades of Mom’s Place, which opened in 1980 and specialized in Newfoundland-style cooking.

“I wanted to stay for another five years, and then I would wind it down.” Hong said she’d cherish the loyalty of customers who helped keep her going as long as she did.

But even with the higher sales at The Rice Bowl, said Hong, paying the rent will be a struggle. She needs to renovate The Rice Bowl and install a new electrical system, because its power comes through the system at Mom’s Place.

Rising rents at the mall reflect rising rents across St. John’s, said mall manager Sue Freake, who said it’s up to business owners such as Hong to decide on renewal.

“The negotiation was no different than any other renewal, in that we sat with her to negotiate a renewal of lease and she made that decision to not renew in one location and keep the other open,” she said.

“I’m not able to speak specifically to any tenant or their lease or rent or all. … Market rents do not remain the same.”

Other local business owners at the mall are warily expecting to see similar price hikes, and worry that too much of an increase will force them to close, too.

Paul Thomey, who owns sporting equipment and apparel shop That Pro Look, hasn’t heard yet from mall management about his lease, which is up at the end of August. “I’ve indicated I’m interested in renewing, but it comes down to how much,” said Thomey. “I am concerned that a significant increase would force us to look at other alternatives.”

Upstairs at A Special Touch, owner Sandra Avery has just begun negotiations for a new lease. She says she’s “definitely concerned” about rent increases. “Fifty per cent sounds like what it’s going to be. I’ve been in the mall 23 years, and I’ve never had an increase that high ever.”

Guy Randell, owner of The Art and Frame Shoppe in the mall parking lot, is in the middle of his five-year lease, and said he’s heard that rents are going up substantially.

“My last lease, it went up 50 per cent,” he said. With another increase like that, he said, he wouldn’t renew his lease,.

 

 

Organizations: The Rice Bowl, The Art and Frame Shoppe

Geographic location: Newfoundland

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Recent comments

  • brett
    February 18, 2014 - 16:52

    look - the previous rent was around $11.70/sqft/month That's crazy cheap. $22/sqft/month is not outrageous. Those businesses should have been raking it in given those rents over the past few years. If they haven't - they need to look at their business model their volumes etc... I don't want anyone to lose out or have problems, but at a discounted rate of $12/sqft/month, you would think they'd be able to easily afford upgrades to their equipment and storefront.

  • f
    February 18, 2014 - 07:33

    Well "a business man" be careful who you step on on the way up because you never know who you are going to need on the way down. If business is so good why didn't you print your name and let everyone know who you are? and remember everything that goes up, one way or another, comes down.

  • Jean
    February 18, 2014 - 00:08

    david....glad to see you think it's funny that people are losing their jobs....but don't give up "your" day one, though I doubt you could hold one down...

    • david
      February 18, 2014 - 09:09

      What I think is sad (not funny) is that Newfoundlanders --- the most obese people in Canada --- have no clue they eat almost nothing but fast food. If you don't get the message, that's your (unsurprising) issue. But if you want to "save jobs", I encourage you to eat as much as you can at all the franchises you can find. After all, that's where the most Newfoundlanders work.

  • Previous Employee
    February 17, 2014 - 21:32

    This is so sad.....but plan and simply said, " money talks..." They have been wanting " franchise " stores in that food court for years. All the best to you Shirley. I hope Rice Bowl will survive ' the wrath of Sue '.

  • penny allderdice
    February 17, 2014 - 18:27

    No doubt mall manager Sue Freake needs the rent increase order to start paying living wages to her cleaners, security guards, maintenance people and meet the anticipated increase in electric bills.

  • Ashley
    February 17, 2014 - 17:57

    Very sad to see Moms Place close their doors after so many years. I have eaten there many times over the years and it's a shame Mrs Hong had no choice but to close her restaurant/take out.

  • Jean
    February 17, 2014 - 16:19

    I for one am sad to see Mom's place close down. It was the only alternative to fast food...and I totally understand Ms. Hong's decision to not renew her lease.. It's just robbery..But what I find funny, is the space is left empty....who wins there....greed will get you nowhere, and I guess that's why the "Mall" is going downhill fast.

  • Jean
    February 17, 2014 - 15:25

    I for one am sad to see Mom's place close down. It was the only alternative to fast food...and I totally understand Ms. Hong's decision to not renew her lease.. It's just robbery..But what I find funny, is the space is left empty....who wins there....greed will get you nowhere, and I guess that's why the "Mall" is going downhill fast.

    • david
      February 17, 2014 - 15:53

      Your home has no kitchen? That's a shame.

  • Jean
    February 17, 2014 - 15:24

    I for one am sad to see Mom's place close down. It was the only alternative to fast food...and I totally understand Ms. Hong's decision to not renew her lease.. It's just robbery..But what I find funny, is the space is left empty....who wins there....greed will get you nowhere, and I guess that's why the "Mall" is going downhill fast.

  • Jay
    February 17, 2014 - 13:53

    So sorry to see Mom's Place close. Ate there quite often when visiting the mall. Hopefully with the rent increases the mall will upgrade facilities. Bathrooms need upkeep. The doors in the food court area are never working.

  • a business man
    February 17, 2014 - 13:05

    This is great news. The economy is booming and landlords can charge more. I recently increased the rents for all of my residential tenants. YES, some could not afford the increase and had to leave, but they were quickly replaced with a new tenant. This is all great news because it means that the property is worth more. Good for the owner because they have more wealth, good for the government because they will tax a higher amount. Hopefully, rents keep going higher and higher.

    • Brad
      February 17, 2014 - 14:00

      The economy is booming? Really? - We just had two mines shut down - IOC's mine in Lab West is up for sale...impending cuts - Come by Chance is up for sale..and will likely be shut down - Long Harbour is cutting workers like it is going out of style. The only things on the go are Hebron and Muskrat Falls. Rents and property prices will NOT be going higher because people are maxed out. If the interest rate went up by even 1% a lot of homeowners in here would be in deep trouble

  • Scott
    February 17, 2014 - 11:46

    I can't figure out your real estate out there Were from out of province and was looking to set up a business out in Newfoundland ,But i just don't understand Your housing and commercial values. It seems to me as your housing market is flooded with homes yet the pricing is top dollar. Hard to attract Business if everything you have is at a premium already. What am I missing? Must mean 25.00 SQ FT month

  • Ji
    February 17, 2014 - 11:43

    It is sad to see a restaurant that has been in business for so long to close because of the rising rent.

  • Redgrave
    February 17, 2014 - 09:26

    This is all a part of Newfoundland thinking it's in the big league now. Reality is is a much different story. We have not won the lottery, and Newfoundland is still a place where the average person struggles to put food on the table. I've never seen so many people sitting about all winter doing absolutely nothing. If you own a business that needs to shut down for six months of the year--it's weak, and unproductive. Hundreds of years have past, yet still, barely any indoor industry that doesn't involve food, or the sport of over eating.

  • GPG
    February 17, 2014 - 08:46

    You must mean $250 per square foot per year not per month. Or $250 per square metre per month because $250 per square foot per month is off the charts.