By Pepper Parr
November 27th, 2020
BURLINGTON, ON
The pandemic is hurting a lot of small business people.
Some of the claims being made by landlords border on the egregious.
The Elliott Sports Medicine Clinic is going through a very difficult period – they have managed to pivot and get back on their feet – the problem now is the lawsuit for very close to a million dollars.
$947,701.20 to be exact.
This from a landlord they have been with for 19 years.
Their rent each month was $12,800. The negotiations that stared at the end of March to renew the lease which was coming to an end in October had not gone well.
Erin MacLean
In March, with everything locked down Erin Maclean and her partner reached out to their landlord to discuss the problem they faced.
Everyone in the services or hospitality sector was scrambling – things were very tough.
One of the most successful hospitality venues, Emma’s Back Porch, chose to declare corporate bankruptcy and walk away from what the owner saw as a dire financial future.
Elliott Sports Medicine found themselves in much the same situation. Suddenly they could no longer conduct their business – they laid off the ten staff and began to wonder what they could do – what were their options ?
They immediately met with their landlord and laid all their cards on the table.
The landlord at first appeared amenable. The lease was due for renewal in eight months. MacLean was taken aback by the rent increase that was being asked for – $17,000.
“We reached out to our landlord in the middle of March being open, honest and upfront about our position due to Covid. We had been with this same landlord for 19 years – we expected to be able to work with him”, said MacLean.
“By that time we had laid off all of our employees and were effectively closed as a business and had no idea what the future held.
“We were never late or delayed in paying our very high rent anytime over the past 20 years.
“Rent relief was not something our landlord was interested in – unless the lease we had was renewed.
“The landlord wanted a rent increase to $17,000 a month and personal guarantees.
“After many, many long negotiations we decided not to renew the lease but to look for a new location.
They gave their notice – didn’t realize that the lease had been renewed.
“We gave notice on June 4, 2020.
“We learned then that our landlord had taken the position that because we had not given six months’ notice the landlord decided to take the position that our lease was automatically renewed until 2025.”
In the middle of May (during negotiations) MacLean received a letter from the landlord demanding all the rent due be brought up to date; they were forced to pay, using borrowed money, for the almost three months they were closed.
“On June 4th we gave our landlord written notice of our final decision to stay in the premises until our lease expired on October 4th 2020.
“We moved on October 2nd having fulfilled and paid our lease in full.
“After some time, we were served with a claim that was filed with the Superior Court of Ontario in Toronto for $947,701.20 plus 18% interest per annum. The landlord as Plaintiff could have chosen the Superior Court in either Milton or Hamilton (anywhere in the province actually) – the Toronto choice would appear to have been strategic.
The corporation suing the clinic is 1100 Walkers Line Inc., which appears to be owned by Kamisa Investment Inc.; both are owned by a “prominent” businessman.
The 1100 Walkers line property a six story office building just off Walkers Line, has an interesting history of its own.
The land on which the office tower, completed in 2015, had been purchased by the City of Burlington for $5.4 million.
The owner of this property had plans to develop it beyond the single storey structure. His plans did not fit with the developing IKEA Plans. That red line is where Tuck Creek flows.
This is where IKEA wanted to relocate their Aldershot operation. They were going to build a bigger store and add quite a few head office jobs as well. The city went along with Official Plan and zoning changes. The Conservation Authority would not go along with the parking plans close to Tuck Creek. The green line is Tuck Creek.
The sale was a complex transaction. The owner of the property back in 2014 wanted to tear down a two story building and put up a larger building. An application was submitted to the planning department.
City needed the piece outlined in red if the IKEA development was going to work.
Property owner got to keep the balance and put up a six storey building.
For reason which are not clear to this day the city moved to purchase the property because at the time IKEA was working through an application to move their operation from Aldershot to a property on the North Service Road west of Walkers Line.
Tuck Creek ran between the 1100 Wellington property and the land IKEA wanted to build on.
Also – at the time the Ministry of Transportation had concerns with the ramps that led off Walkers Line which was reaching a capacity point.
For Erin MacLean they are now in a new location running the business as well as we can with the Covid limitations.
The only difference is someone wants a million dollars from us – which we don’t have.
Related news story:
Property has a colourful history – and an astounding price
lol
Hi Pepper – I think you may want to fix a typo here….
“By that time we had laid all of our employees and were effectively closed as a business and had no idea what the future held”.
Editor’s response: Indeed – not sure how a required word was missed. That is not the way they do business. Thank you for spotting where the word was missed.