By Lawrence Powell
The possible closure of the ValuFoods store at Cornwallis’s Basinview Centre has local residents angry at Annapolis County even before its new council is sworn in, but District 6 councillor elect Alex Morrison is hoping a Wednesday evening public meeting will shed some light on the situation.
And it’s complicated.
Valu Foods was recently faced with a 550 per cent increase in its monthly rent to the county-owned facility and has indicated it will close on December 1 if the county doesn’t budge. But it may be too late for that. Council made a decision in September saying storeowner Cathy Graves must begin to pay the amount agreed upon in the original 2009 lease agreement.
That lease agreement set out a rent schedule that had the store paying $500 a month or $1.09 a square foot for the first year beginning on June 1, 2009. In years 2 and 3, the rent was to increase to $1,750, and in years 4 and 5 to $2,750. June of this year was the beginning of the fourth year but despite the year 2 and 3 payment schedule, ValuFoods had only ever paid $500 a month.
County CAO Brenda Orchard said the issue came up in late 2011 when the director of finance flagged ValuFoods for being $24,000 in arrears in power utility charges which the county paid out of taxpayers’ money. The subject came up at council in March 2012 with Graves committing to catch up on the utility arrears if council agreed that she could adjust the monthly rent to $500 between March and September. Council agreed, but in September, on a recommendation from committee of the whole, reverted back to the original lease agreement that called for $2,750 a month or $6 a square foot.
Because council is required by the Municipal Government Act to lease property at fair market value, the county hired an accredited company to assess what was in fact fair. Orchard said the firm came back with a range between $8 and $10 a square foot -- $7 to $9 more than what ValuFoods was paying. And Valu Foods was not paying facility common charges such as snowplowing, washrooms, water, and sewer.
Orchard said the county can’t subsidize businesses, even if it’s in the interest of economic development, noting that it’s unfair to use taxpayers’ money to undercut other private businesses.
John Cameron, lawyer for Graves, said his client considers the move by the county to charge the original $2,750 year 4 rent as a dictated solution, adding that Graves believed that there would be more discussion between herself and the county before the five-times-more rent was in place.
Cameron said he hasn’t seen the assessments mentioned by Orchard. “I don’t know if they are reasonable or not,” he said. “Being an anchor tenant changes what is a reasonable rent considerably.”
He also said he isn’t certain who would now be considered the anchor – the YMCA or ValuFoods. He did say that it is his understanding that the power bills are now up to date.
The Graves were invited to open a store at Cornwallis but after the first year indicated to the county that it would be impossible to continue if the rent was increased. Cameron said the county continued invoicing at $500 a month.
Cameron said his clients have indicated that if the county continues in its position to charge the higher rent, there will be no option but to close the store. But he said they’re willing to talk if the county is willing to talk.
“There can be a solution,” said Cameron. “It requires flexibility.”
He said the store has made a significant contribution to the community.
“If they were doing it for the money they would have gotten out of it long ago,” he said.
Despite the county’s leniency over the past two and a half years, members of the public are crying foul and even signing a petition to try to keep the store from closing.
“My wife and I have today signed a petition concerning a proposed increase in rent of 550 per cent for Cornwallis Valufoods located at the YMCA Mall in Cornwallis Park,” said Clifford King of Clementsport in an email to Orchard Monday. “From the information given, it appears that this arbitrary decision takes effect November 1st, 2012.”
In his letter he questioned the county’s motives and suggested the short timeframe precludes any defense by ValuFoods.
“I have lived in this area for 24 years, and have seen some pretty strange decisions by the Municipality of the County of Annapolis, but I must say this is the most disquieting,” Kimg said. “And mainly because it virtually ensures the closure of a needed resource in an area painfully short of such amenities. And it also guarantees that we will have to travel 30-odd kilometres to buy groceries. Not to mention the loss of, I am told, a dozen much-needed jobs.”
King suggest Orchard herself might have been behind the decision, but she told The Spectator reverting to the original rent schedule was made by councillors based on advice of the solicitor.
“I have no say in this,” she said. “This is solely a council decision. It’s council that decides what’s best for the taxpayers. They represent the taxpayers.”
She also said council has a legal interpretation of the 2009 lease agreement in hand.
She did say that the issue will be on the council agenda for November 13 and said she anticipates councilors will want to discuss it.
Morrison, the new councilor, is organizing a public meeting for Wednesday at 7 p.m. at the Clementsport Legion.
“To permit the grocery store to close will, of course, have a very negative impact on the restaurant and on the hair salon, and potentially, on the YMCA, and on the area as a whole,” Morrison said in a public email.
“I am now trying to organize a public meeting on Wednesday evening to discuss the matter. If I am successful in doing that, I hope you will attend along with others that you might think appropriate to accompany you.”
He said he and others, including some returning councillors, are convinced that the grocery store business will increase as YMCA membership increases and, as hoped, other businesses come to the Basinview Centre.
“In this time of rising fuel costs and 20-kilometre round trips to Annapolis Royal and Digby, in view of the number of seniors in this area, and in view of a myriad of other factors, it is imperative that this store stay open” Morrison said.
Orchard said she will be attending the Wednesday meeting, and she hopes the facts will be presented at the beginning of the meeting.