The landlords of Capital Pancakes in Civic say they are not the bad guys after the iconic business flipped its final pancakes last week at its iconic location.
Instead, the landlords say the saga is symbolic of an increasingly difficult commercial climate in Canberra.
Landlords Socrates Kochinos and Kamy Saeedi said the closure could have been avoided if the two parties had come to an amicable agreement.
The demise of the business is the latest in a growing list of closures since the COVID-19 shutdown came into effect.
Region Media has reported on the closure of the Transit Bar in Civic, Home Timber and Hardware at Phillip, and Capitol Theatre at Manuka, but there have been others such as the Espresso Rooms at Woden and Tuggeranong, the Treehouse Bar in Civic and Leong’s Kitchen which operated at the Campbell shops for 26 years.
Mr Kochinos, who is the lessor of several restaurants in Canberra including Belluci’s at Manuka and Woden, and Mr Saeedi, who also owns a prominent law firm, said the meeting with Capital Pancakes owners ended on good terms after a mutual agreement on rent payments and a lease renewal couldn’t be reached.
Capital Pancakes co-owner and cook Philip Barton has stated publicly that their offer of paying a proportion of their gross turnover as rent was turned down. Mr Kochinos and Mr Saeedi said the offer was “simply untenable” even though they were open to helping the business stay afloat.
Region Media has been presented figures that show the lease for Capital Pancakes was in place until 2027 and their offer based on their current figures was just over 12 per cent of their annual rent payment for the next two years.
“They are nice people and we didn’t want to see them close as we don’t want vacant buildings,” Mr Saeedi said.
“There are no bad guys here, but the reality is that financially we can’t prop up businesses with money that we don’t have during a downturn.
“There is a perception in the community that landlords are rich. We owe money to banks like most other commercial lessors. We’re hurting just as much as businesses are at the moment.”
Mr Kochinos and his business partner also own a number of commercial properties in the heritage-listed Sydney Building on Northbourne Avenue that have become vacant. He said they don’t mind going into “a bit of debt” to deal with the upkeep of their properties and have recently spent several hundreds of thousands of dollars on repairs to roof tiles and air-conditioning.
However, they also fear the worst is yet to come when the full effects of the economic downturn from the COVID-19 pandemic take hold.
“We’re waiting to see how the market looks after this is over, but the government has been too slow to react with its concessions, while we still have to deal with the banks. The real landlords here are the banks and the government.
“Some people don’t realise we are also paying extravagant rates, we wear delayed rent payments, we wear the losses on the value of our buildings, and then we’ve got tenants who are moving out as well. I don’t think there has been that much relief from the government and I don’t think the burden has been shared proportionately,” Mr Kochinos said.
“We are the meat in the sandwich,” Mr Saeedi said. “We’re the shock absorber between the bank and the tenants and we just need some certainty from the government. If we had that, we would be able to pass that on, and more, to our tenants.”
ACT Chief Minister Andrew Barr said his Government will provide an economic update to the Legislative Assembly on 18 June which will outline how the Government plans to work alongside industry and community sector partners to rebuild Canberra’s economy.
Mr Barr said commercial property owners in the city centre will benefit from a series of waivers and deferrals on their annual City Centre marketing and improvement levy for the upcoming financial year. The funds from the levy are used by the City Renewal Authority for events and activities in the CBD, as well as extra cleaning and maintenance.
“This levy reduction is in addition to the more than $350 million in economic support already announced by the ACT Government. This has included incentives for commercial property owners to reduce their rents, delayed commercial rate notices and payroll tax deferrals,” Mr Barr said.
Mr Saeedi said he understands the government’s limitations, but their support measures have been after the fact.
“We still don’t know how the federal government intends to deal with the banks,” he said. “We’re only at the beginning of this financial recession and the small operators like us are heavily tied in the with the banks. The side effects will be coming for quite some time yet.”