Covid-19: Elliott Stables restaurant liquidates after notice to pay rent arrears

Thursday, 15 October 2020

Finance Minister Grant Robertson has no plans for a UK-style hospitality stimulation subsidy package.

A struggling restaurant at central Auckland’s Elliott Stables has liquidated, unable to pay rent and operating expenses in arrears of tens of thousands of dollars.

In September, half of the owners in the dining village received notices ordering them to pay the arrears or face losing their lease.

With personal guarantees on their leases, the businesses were worried landlord The Icon Group would take their homes to recoup its losses.

Luis Cabrera, who owns Latin American eatery Besos Latinos, said he had now permanently closed its doors after negotiations for a “halfway solution” failed.

The owner of Besos Latinos has made the decision to liquidate.

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Elliott Stables has largely been a ghost town due to the coronavirus pandemic.

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Cabrera was in arrears of about $50,000 and said the eatery was quiet, even at alert level 1.

Besos Latinos can seat 90 people. Cabrera said despite the support of loyal customers, he has been lucky to seat six.

“My wife and I are very sad after 10 years the dream has fallen apart in such a sad way.”

Five Elliott Stables eateries were served Property Law Act (PLA) notices in early September.

Cabrera said his focus would now be on his Ceviche Bar in Wynyard Quarter.

Other Elliott Stables eateries said they were looking at “other possibilities”. Cancelling their lease and liquidating were among the options.

Finance Minister Grant Robertson says a $40m fund is available for businesses and landlords in this situation.

A Givealittle page has been set up to help the tenants.

Lawyer Kate Sheehan, who is acting for the tenants, said there were four courses of action available to them and none were an “easy solution”.

The tenants could pay the arrears to avoid being locked out, go to court for relief, apply for a stay of enforcement or terminate their leases.

“I’m trying to find a potential resolution without them all going to liquidation.

“If they could get time on deferred payment they would have been able to trade out of the situation.”

Sheehan felt the Government had put its head in the sand and hung businesses out to dry in terms of rent relief.

But Labour Finance Minister Grant Robertson said mediation services were available for situations like this, referring to a $40 million fund to assist business and landlords with the cost of tenancy disputes as a result of Covid-19 hardship announced by the party in July.

Denise Kyne, general manager for The Icon Group, said it worked in good faith with all of its tenants during the pandemic and had reached agreement with more than 90 per cent.

She said a total of $675,000 in rent relief had been given to its Elliott Stables tenants.

“Unfortunately there is a small number of Elliott Stables tenants who are now in arrears despite our best efforts to agree a way forward and so we have issued Property Law Act notices for the rent and operating expenses they owe,” she said.

“We are left with little option but to reluctantly take this action, given the lack of contact from these tenants and their lawyers.

We are still ready and willing to discuss the legal issues with the tenants and their lawyers.”

Viv Beck, chief executive of Heart of City, said it was “really sad news” Besos Latinos had been liquidated.

Elliott Stables was at the “apex of a perfect storm” of Covid-19 and construction, she said.