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Loblaw appears to be sitting on properties that could be used by another retailer. Is that bad corporate citizenship or simply smart business sense?

Susan Flanagan susan@48degrees.ca
Published on January 22, 2013
The former Dominion grocery store site at the intersection of Newfoundland Drive and Torbay Road. — Photo by Keith Gosse/The Telegram

Sometimes when one of my columns appears in the paper, I get not only lots of emails but also phone calls. People are so incensed by what they’ve read, they dig out the phone book and look me up.

These people usually do not like to be quoted for fear of certain conflicts, but their concerns are legitimate. The most calls I have ever received was after the Loblaw column. One caller insisted that I had to write a followup in the new year.

“Loblaw is one giant Pac Man gobbling up all the money they can,” he said, urging me to call the City of St. John’s requesting info about taxing vacant properties and to call those responsible for leasing the vacant properties on Newfoundland Drive, Ropewalk Lane and Churchill Square.

So, I set to work.

Checking with the city proved as useful as banging my head against a vacant supermarket door begging to buy a loaf of bread. After four emails and one phone call to our city’s communications person, what answers did I get?

Nada.

But, for the record, here are some questions I sent to City Hall on Dec. 11, 2012, with followup on Dec. 13 and Dec. 16. I emailed again on Jan. 3, 2013.

‰    1. What laws does the city have in place regulating vacant retail space?

‰    2. Does the city offer tax breaks to commercial property owners if their properties are vacant? If so, is there a policy in place regarding square footage of a commercial property (i.e. are properties over or under a certain square footage taxed differently)?

‰    3. Is there a law in place dictating that if a supermarket vacates a property, then a non-unionized supermarket group cannot move in there for a certain amount of time?

Next I called John Reader in Halifax, N.S., who used to be in charge of leasing for Loblaw.

“Stores like Loblaws and Wal-Mart all put in restrictions that another food store can’t go in,” he said. “In the case of Churchill Square, it was not very profitable and the building also has some challenges.”

When I challenged him on the fact the Loblaw website hails the company as being a good corporate citizen, he said there are many ways of being a good corporate citizen and many ways to make a company profitable. ... “The two don’t always align.”

He went on to say that Fred Steinhauer, the local leasing agent in St. John’s, “had the right to accept or reject (tenants). We suggested several tenants; they rejected them all.”

OK, so then it was time to call Fred Steinhauer of The General Inc. who actually owns the properties on Newfoundland Drive and Ropewalk Lane and leases them to Loblaw — leases the Loblaw communications person in Halifax told me before Christmas were up for renewal in the spring of this year.

That’s not how Steinhauer sees it.

“We have no choice,” he said when I called him.

Loblaw signed 25-year leases with The General Inc. in 1990 for three properties in St. John’s. The properties on Newfoundland Drive and Ropewalk Lane remain vacant and probably will remain so until their leases are up in October 2015. A third property leased to Loblaw on Topsail Road has been sublet to Smith’s Home Hardware.

My next call was to the person who is now in charge of leasing for Loblaw. Cindy MacDonald is the sales person and director of client services at Arcturus Realty in Dartmouth, N.S., the company that handles leasing for Loblaw in Newfoundland. I asked about their vacant building in Churchill Square.

“We’re planning to lease the space at some point in time,” she said. “We have some structural issues. ... Until we complete those, the opportunities are not there (to lease).”

As for fixing any structural problems, MacDonald says they haven’t assessed the property yet and don’t have a time frame in place for when it will be done.

I suggested that Loblaw has had plenty of time since the store closed to complete an analysis of the property.

“Says who?” she asked.

“Says me,” I answered.

Soon after that, her cellphone conveniently got disconnected and when I tried to call back, I got bumped to voice mail.

Hmmm.

What MacDonald says about structural problems is undoubtedly true. One reader named Ron Butler said: “Talking to a couple of employees of Dominion two years ago, they told me that the floor is condemned. It has been rotting away for 10 years. They tried several times to reinforce it over the years. Maybe you can check with the city on that problem.”

It’s an interesting question. Should we — as citizens interested in thriving communities with useful neighbourhood retail space instead of vacant lots — expect corporations to be good corporate citizens, or expect our city councillors to take an interest?

Pumped up on caffeine, I soldiered on and contacted Mike Coleman of Coleman’s Supermarkets, who said: “We would love to have that property (in Churchill Square) for a Colemans Food Store.”

If I’m correct in assessing the wishes of residents, I would say they would love to see another supermarket in that space, too.

So, where does all this leave me?

This leaves me with three black holes in the city of St. John’s and no answers as to when anything will fill those holes or what the filler will be.

It also leaves me with one group of people who tell me the solution is very simple: we should call on all councillors to make sure that if a company is going to leave buildings vacant, the company must be taxed extra.

It leaves me with a second group who say they have to change the channel when they see the Loblaw ad that runs on local TV.

Maybe you’ve seen it. It’s a lovely commercial. It features Galen Weston, head of Loblaw, sitting outside on a downtown city street enjoying a sunny meal with the locals. Except there’s one thing not quite right. Loblaw has no supermarket in downtown St. John’s and hasn’t for a long time.

“It sickens me,” one man said. “Loblaw has no supermarket in the downtown. Loblaw has abandoned the downtown.”

Mel Champagne, who lives on a cul-de-sac backing on to Churchill Square, said, “I would like to say that it was  well shot, esthetically beautiful (commercial), but it did not represent us. It showed Newfoundland in a great light and with amazing spirit, but it brought me back to what our community was missing — especially our neighbourhood. … What irritated me was the fact that (Weston) was showing and talking about community and that our store got shut down. It was a big part of our community.”

Marylou Leeman writes, “I have been annoyed with the attitude of Loblaw since the closing of the Newfoundland Drive store. A large corporation who (is) prepared to pay the leasing cost to keep a storefront vacant rather than permitting a competitor to provide a convenient service to grocery shoppers. I am not sure that the city or provincial government need to enact yet another bylaw. There must be some way to challenge the Mark Boudreaus of the corporate world to do the right thing.”

But who is the culprit?

Is it Loblaw, a for-profit company with a right to make money as long as it breaks no laws? Or is the villain the City of St. John’s, which seems content to allow supermarkets to do whatever they please?

If a supermarket’s mandate is to build 100,000-square-foot box stores that people have to drive to, should it be their mandate to continue to supply a community with small stores that people can walk to?

This invites people to go and pick up one or two things or even skip the supermarket and head to the corner store for the same thing. Whereas if the people drive to the box store they’re probably there for one-stop shopping, which will increase the company’s profits.

In its mind, Loblaw is a good corporate citizen. It abides by the laws of the municipality. It provides jobs. It pays taxes.

Perhaps it’s time for the city to sit down and take a good look at the distribution of shopping areas to see that all its citizens have access to amenities.

Perhaps we can speed the process by sending messages to our councillors and/or to Loblaws:

 

(Insert councillor’s name here)

City of St. John’s

10 New Gower St.

P.O. Box 908

St. John’s, NL A1C 5M2

 

Mark Boudreau

Loblaw Director of Corporate Affairs, Atlantic

3711 Joseph Howe Dr.

Halifax, NS

Phone: 902-468-8866

Email: mark.boudreau@loblaw.ca

    

Susan Flanagan is a journalist who has been unable to confirm if there is any truth to the rumour that Mary Brown’s is in talks with Loblaws to take over the Churchill Square property. Susan can be reached at susan@48degrees.ca.