Business & Economy
November 23, 2020

Hudson’s Bay Company Paddling Away From Landlord, Employee Obligations?

Three years ago I wrote about the turf of the  iconic Hudson’s Bay store in downtown Vancouver at Granville and Georgia Streets being for sale, and in 2018 I wrote that the store’s property had been bought by an undisclosed Asian buyer for 675 million dollars.

The Hudson’s Bay Company  had previously leased their New York City store location to WeWork, a shared workspace business, setting the stage for a suggested change in the ownership (and purpose) for the Vancouver store. This arguably is on one of the most important heritage sites in the city, a block away from the Vancouver Art Gallery, and right beside the Canada Line.

What a shift a Covid pandemic year makes, where trends that would have taken longer to come to fruition have had a chance for accelerated growth, with less angst expressed by the public.  It was expected that  Hudson’s Bay  was to sign a 20-year lease with the new owner, and have WeWork, the shared office space operator,  leasing  the top floors of the Vancouver and other Hudson’s Bay stores.  That was pre-Covid.

Department store retail  and the demand for downtown shared work facilities has shrivelled during the pandemic. Sadly even though Hudson’s Bay Company has been in Vancouver since 1887, first operating out of a storefront on Pender Street, their way of leaving has not been so glamourous.

As reported by Rachelle  Younglai and Susan Krashinsky in the Globe and Mail HBC have not paying their bills, and they are being a bit obstreperous about it.

The Hudson’s Bay store in Coquitlam  Centre was shuttered on the weekend, because the company did not pay their rent.

Hudson’s Bay Company (HBC)  who also own Saks Fifth Avenue and  Saks Off Fifth department store chains, is “facing legal actions for unpaid rent in at least 20 locations in Ontario, British Columbia and Quebec, as well as in Florida, according to court documents.”

It appears that rent has not been covered by HBC for many Hudson’s Bay stores across Canada,  with Morguard REIT  alone out $2.79-million in unpaid rent for five locations in shopping centres in Ottawa, Toronto, Brampton, Ont., and Abbotsford, B.C. And there’s more outstanding debt on leased space too.

HBC had privatized pre pandemic, and there had been accusations of the chain not running “first-class” operations, especially at Yorkdale Mall in Toronto which is the flagship store and a top producing mall.

In the “best defence is a good offence” strategy, HBC has responded legally by saying the same thing about the landlords that own the various properties that the stores are positioned on.

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I have written about the City of London England being one of the first cities to embrace the concept of slower streets during the pandemic through the adoption of “red routes”. These major roads lead to the inner city and in partnership with Transport for London (TFL) the City of London developed a unified strategy to opening streets across boroughs for walking and cycling through wider sidewalks, thinner driving lanes, and road closures.

They also initiated traffic light signal changes to allow pedestrians and cyclists longer greens when crossing, knowing that walking and cycling would prevail as a way to get around during the pandemic.

Greg Ritchie writes for Bloomberg.com that many of those initiatives embraced for physical distancing will continue in the future even when the pandemic is over. In the words of Simon Fraser University’s Duke of Data Andy Yan, the pandemic has accelerated many changes that would be happening over a much longer time period.

London’s central core the “square mile” has narrow streets that make the two metre separation for physical distancing challenging.

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The Duke of Data Andy Yan seems to be everywhere these days, bringing practical information,municipal data, and a prudent approach on how best to navigate through the Covid crisis. He brings a clear, cogent, well researched and thought out voice to the pandemic conversation, and has really raised the profile of Simon Fraser University’s City Program as an active, engaged place with a researcher who always has time for students and discussion.

Mr. Yan  in concert with the Canadian Urban Institute has worked on a data base to assist with the recovery of retail and commercial districts in Canada. That database access is absolutely free.

With a long and still expanding list of main street partners Mr. Yan is part of a nationally-coordinated research and advocacy campaign ensuring best solutions for Covid-19 recovery. The strategy includes main street business leaders as well as leaders from academia, developers, industry and professional organizations and advocacy groups.

With an aim to enrich the “value of our main streets~their connection to the health of the economy, social life, and vitality of our neighbourhoods and cities” the work strategizes actions that “can guarantee their survival”.

As Nic Rockell in BC Business writes the Main Street Primer helps to navigate a “sea of data” to enable commercial areas to bounce back from the pandemic with resiliency.  This national project was undertaken with the Canadian Urban Institute through their “Bring Back Main Street” initiative.

By carefully examining seven commercial areas in British Columbia and Ontario, the data compares business closures, foot traffic before and after the pandemic, and other factors that changed how the street was being used.

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It has been Duke of Data Andy Yan who has been reminding us forever that there is a radical disconnect between household income and the price of housing. People working in Metro Vancouver can’t afford to buy housing here.

In 2017 Mr. Yan summed it up this way:

It’s surprising to me that we have only  the 15th highest incomes in Metro Vancouver, even coming behind Toronto. What we learned today is in Vancouver you are living in paradise, but your wages are in purgatory.” 

The median household income Mr. Yan was referring to is $72,662. At that time he saw the major issue was how to reconnect local incomes to local housing, noting that needed policy enactment would be  different in each city.

Photographer and former editor of Price Tags  Ken Ohrn sends along this article by Natalie Obiko Pearson who writes that Amazon. com is expecting to triple its workforce in Vancouver. Why? Because software engineers here are “cheap, smart and plentiful”, like an overabundant agricultural crop.

A conversation with an Amazon vice president revealed that  a “weak loonie, lower wages and a steady flow of graduates make Canada an attractive place to expand for tech companies whose largest expense is labour”. 

 The salaries in Vancouver are substantially less than for similar jobs south of the border, as are office rents.

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The Canadian Urban Institute presents a free webinar on 
COVID Signpost 200 Days: How Should Our Cities Prepare for Winter?
Joining our guest host Catherine Craig-St-Louis of CUI and Rues Principales for our second series of COVID Signpost, 200 Days.

Presenters: Olivier Legault, Project Managerat Rues principales and Co-founder, Winterlab

Isla Tanaka, Wintercity Planner at the City of Edmonton;

Sheena Jardine-Olade, CoFounder of Night Lab;

 Rami Bebawi, CoFounder and Partner at KANVA.

Date: Thursday September 30, 2020

Time: 9:00 a.m. Pacific Time

You can register by clicking this link.

Images: DreamTime,CdnUrbanInstitute

 

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