The owners of a cafe in the food court of Westfield’s Pitt Street Mall will be allowed to keep paying half its regular rent payments while a Tribunal decides on its claim for compensation for loss of sales caused by renovations at the centre.
John and Maria Sophios, who have run Christo’s Cafe in the Pitt Street Mall food court for eight years, are seeking damages of about $300,000 from Westfield over the renovations which started in October 2008 and are due to run until the end of the year.
The Sophioses say the work has caused major disruptions for traders that have resulted in their turnover falling 20-30%.
Ange Kondos of Melbourne-based tenant advisory firm LeaseWise Group, is advising the Sophioses and says his firm will not focus on “fine tuning” its evidence to support the damages claim, which will eventually be in the order of $300,000.
He says the renovation work is on-going and “intense” but the Sophioses are prepared to fight on despite aggressive tactics from Westfield.
“It’s pretty stressful. Owners are there to run the business and get on with, not fighting a Goliath like Westfield,” Kondos told SmartCompany.
“It takes time, it takes money and it’s a distraction when you’re running what is a marginal business right now.”
The saga has now been running since late 2009, when the Sophioses first made a claim for compensation from Westfield.
In May, the pair began to struggle to pay the rent and with rent owed running at $28,000, Westfield issued a “lock out” notice against its tenant.
On June 3, the New South Wales Administrative Decisions Tribunal granted an injunction against Westfield stopping the lockout attempt.
Two weeks later, the ADT said that Christo’s could pay 50% rent until the Tribunal could assess the full impact of the renovations.
Westfield challenged that ruling last week, but the ADT decided half-rent order will stand.
The matter is scheduled to return to the Tribunal on September 23, where both sides will be required to finalise their evidence.
A date for a full hearing will then be decided.
A spokesman for Westfield says the company has been wanting for work with the owners of Christos to resolve the situation.
“However their demands are not consistent with what we believe any impact of the redevelopment may have caused. In fact, it would be fair to say that demand has increased for SCP food court retailers following the decreased competition due to the closure of the Centrepoint, Imperial Arcade, Skygarden and Mid-City Centre food courts.
“The outcome of Thursday’s proceedings is that the retailer was ordered to rectify their ongoing breach by providing a bank guarantee in accordance with the terms of their lease, by September this year.”
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
