Coronavirus: Dozens of Wellington businesses granted rent suspension

Tuesday, 31 March 2020

Dozens of Wellington businesses will suspend rent payments for at least the next month as they battle the economic impacts of the coronavirus pandemic.

Wellington Hospitality Group (WHG), which represents more than 40 Wellington bars and restaurants, said most landlords had agreed to halt rent payments throughout April to help ease the economic burden caused by the outbreak.

The development comes as frustration grows among some in the business community about the lack of action taken by the city council to support struggling businesses to date.

The council is continuing discussions on a possible rates freeze for the 2020-21 financial year, but WHG manager Jamie Williams says the organisation has been too slow to act.

Wellington Hospitality Group manager Jamie Williams says dozens of businesses have agreed with their landlords to suspend rent payments because of the coronavirus pandemic. (File photo)

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Aside from cutting or freezing rates, the council could invest in programmes or infrastructure projects to help businesses, Williams said.

'They just need to follow the instructions everyone else is following at the moment, which is to be kind and be fair, and the answers will come from there.

'They've got to do something, but they seem to just be sitting there quietly. I want to see a plan on how they're going to help.'

Businesses are facing unprecedented turnover drops since the pandemic took hold in New Zealand a few weeks ago.

Paymark figures released on Tuesday show spending in Wellington in the seven days to March 29 had dropped by 29.6 per cent compared with the same period last year.

Nationwide spending was down 27.3 per cent, with overall transactions down by 48 per cent.

The council has not yet agreed on its rates plan for commercial and residential property owners for the 2020-21 financial year, and is understood to be considering an increase of 9.2 per cent, 5.6 per cent, or no increase.

Mayor Andy Foster said on Monday late fees for the final rates bills for the 2019-20 financial year would likely be waived, but nothing else had been agreed to.

Wellington Chamber of Commerce chief executive John Milford supports city council initiatives to reduce the rates burden on property owners. (File photo)

'Ninety per cent of our landlords have been great and have offered the opportunity for us not to pay rent,' Williams said.

'They've been pretty good at recognising where retail is at at the moment.'

One landlord had 'flat out refused' to suspend payments, but two - Robert Jones Holdings and a private landlord on the Kāpiti Coast - had agreed to halt payments for three months.

Most property owners would be able to draw on loss of revenue insurance to absorb the cost, Williams said.

'The only way we're going to get through this is if we all hold hands.'

But Melanie Gorham, chief executive of the Insurance Brokers Association of New Zealand, said: 'Business interruption insurance in New Zealand generally has a standard exclusion which means that any interruption or interference resulting from a notifiable Infectious disease under the Health Act 1956 is excluded.'

Williams expected business to be slow for about 18 months after things eventually returned to normal.

Retail NZ chief executive Greg Harford said he supported rent relief for businesses which could no longer access their premises.

'The recovery from this is going to take years, not months. It's not going to get better any time soon.'

Wellington Chamber of Commerce chief executive John Milford said he was supportive of the options being discussed by the city council to relieve rates burdens.

The council had to keep sufficient funds to keep operating but, at the same time, recognise the situation ratepayers were facing.

Other councils around the country had frozen rates, waived late penalties, or deferred payments, Milford said.

COUNCILLORS DIVIDED ON RATES FREEZES

Councillors Diane Calvert, Fleur Fitzsimons, Rebecca Matthews and Simon Woolf said rates should not increase.

They said the shortfall could be made up by debt funding or creating jobs.

Calvert said non-essential projects and services needed to be reviewed, but could not say specifically which services or projects could be cancelled or deferred.

Laurie Foon, Sean Rush, Sarah Free and Malcolm Sparrow said they wanted to see more information before making any decisions.

Iona Pannett said she supported a low increase or deferral of rates, but focusing on one aspect would not work.

Nicola Young said the council had some 'tough calls' to make on non-essential services.

'There are many things we can no longer afford and it would be irresponsible to think we can get away with rates increases to fund them when critical services go underfunded.'

Jill Day said she agreed with freezing rates but would be seeking information on other options to help people affected by the pandemic.