Big rent hike at Pavilion By Omar Anderson,
Staff Reporter
RENTAL FEES at Pavilion Mall in Half-Way Tree Kingston have been increased by almost 300 per cent effective July 1, and businesses there are facing closure while some proprietors are contemplating cutting staff. Checks yesterday revealed that business owners at the mall will start paying from a low of $35,000 to a high of $200,000, compared to the former rentals of $12,000 and $100,000 respectively. This is because there has been a 100 per cent increase in the price of the square foot measurement on which the rental is calculated. Proprietorsat the plaza will now pay $800 per square foot compared to $400 they usually pay. Steadman Fuller, managing director of Kingston Bookshop, said yesterday he's paying $84,000 for rental per month but that figure will double when his next rent is due. "It's a big blow. It's going to be tough for all of us and I think there's going to be some fall-out," he said, adding that some proprietors are going to find it hard remaining in business. Asked whether he'll cut staff, Mr. Fuller said: "We have to re-examine everything we do because it's a 100 per cent increase, and that's not something you can absorb without making some adjustment." Meanwhile, Ricardo White, owner of Country Kitchen restaurant, said he's paying $12,000 for rental but that has been increased to $35,000 monthly. He manages a staff of five persons. "I definitely can't manage," he told The Gleaner. "The only option I have right now is to close down." Another owner of a food outlet who is paying more than $18,000 in rental, said she's unable to pay the more than $40,000 in new rental fees. According to the shop owner, business from her patrons will not offset the new increase, and she added that many will be turned away if she increases the prices of her meals. "I plan I will stay here for three months and after that I'll have to go if I can't manage," she said. For his part, Curtis Khouri, managing director of cloth store American Dream, said yesterday he had not received any notice of the increase although he had heard of it. He said he's facing close to $200,000 in new monthly rental fees, and he'll have to examine whether he can now survive. He added he doesn't rule out closing down if he can't. "We will all be in a pickle if these increases are what will take place. It doesn't look well," he said. Pavilion Mall had been owned by Mutual Life Assurance Company Limited, but was taken over by the Financial Sector Adjustment Company (FINSAC) after it (Mutual Life) folded several years ago. At the beginning of this month, real estate company Rosh Development Company Limited, bought the plaza for approximately $150 million, director Ravi Rochlani told The Gleaner yesterday. He said the rental increase was inevitable because he will have to pay $3.4 million in security and insurance costs - minus the bank loan and interest. He also defended his action saying that for four years most of the tenants at Pavilion have not paid any increased rent. "It is a private investment and at the end of the day if I can't pay the interest, the bank is going to take away my property," he said. Mr. Rochlani said the rental fees Pavilion proprietors usually pay were lower than the market rate. "The property should service the loan. I can't do it myself," he said. He also criticised several complaining owners for not showing up for meetings they had planned with him to negotiate a suitable rental fee in light of the increased rent. "Right now I have people willing to pay more than what they are paying," he said.
|
