Avalon Mall local tenants eyeing rising rents

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

Daniel MacEachern dmaceachern@thetelegram.com
Published on February 17, 2014
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

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.

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,.