Adelaide small businesses have been smashed by Covid, plead with Premier Peter Malinauskas over rents

Adelaide small businesses being hammered by the pandemic again are pleading with the Premier for rent relief.

Hammered by a third Covid-19 wave, Massimo Sassi, who has owned a small business in the CBD for 48 years, is leading fellow traders with a plea to the Premier. The traders are seeking escape clauses from rents that are rising to pre-pandemic levels.

In an open letter to Premier Peter Malinauskas on behalf of “small mum-and-dad businesses”, Mr Sassi warns his Grenfell St shoe repair business is being sent to the wall by latest work-from-home recommendations. Mr Sassi had clocked up just $6.95 of trade by 11am on Tuesday.

The threadbare revenue and rising costs have caused Massimo’s son, Stefano, to ditch his plan to take over the family business, creating further uncertainty about the future. The Grenfell St store has housed a shoe repair business for a century.

Fellow Rundle Mall precinct traders spoken to by The Advertiser said they were being crushed by workers abandoning the city during the latest Covid-19 wave, just after turnover had started to recover from successive pandemic hits.

Responding, Mr Malinauskas appealed to people to return to the CBD: “My message to South Australians is if you can safely work in the city, then please do. Our city needs you.”

Classic Shoe Repairs owner Massimo Sassi, one of many Adelaide CBD traders struggling with rents, at his Grenfell St store. Picture: Tom Huntley

In his open letter to Mr Malinauskas, Mr Sassi urges a rollback of rents that are presently returning to pre-2020 levels. Tenants are facing threats of eviction and legal action for failing to pay.

Mr Sassi, 63, signed a five-year lease in late 2019 and late last year was handed a notice demanding he pay rental arrears within 14 days or face eviction. He has now negotiated some relief on his $4000-per-month charge.

“Never have I seen anything like this in my 48 years working in this same CBD location … Now with the latest surge of the virus, people are being sent home to work again. Small businesses are under enormous financial/mental duress never seen before,” he says.

“I know for a fact that many are in a state of shock and are about to throw their arms up in despair watching their hopes fall over the cliff. These are mum and dads who were on their way to retirement once their leases were completed …

“You can see more and more vacant shops as the weeks go by and there will be more after the latest Covid-19 surge.”

Mr Sassi urges Mr Malinauskas and the state parliament to examine lease arrangements, saying small businesses earning less than $750,000 annually “should have a less draconian lease agreement with an escape clause that we can engage if in trouble – once only”.

“We as tenants no longer want to pay pre-Covid-19 rents for a two-to-three-day working week … What needs to be done is any tenant who signed a lease prior to Covid-19 happening should be able to renegotiate a new lease or exit with no penalties, no questions asked,” he says.

City Cross arcade Watch Doctor owner Robert Kulenicz, who has worked as a watchmaker in Adelaide since 1986, urged negotiated and mediated settlements so tenants could not simply be thrown out.

“If you’re going to go bankrupt and you simply can’t pay, there should be an escape clause in the lease. If it’s no fault of your own, then the landlord should not have the power to ruin you,” he said.

The Watch Doctor owner, Robert Kulenicz, at his City Cross shop. Picture: Tom Huntley

James Place Bean Bar cafe owner Frank Scorsonelli has been paying full rent since February, with 5 per cent CPI increases since he inked the lease just a month before the pandemic shutdown of March, 2020. He and his wife Teresa last year took home just $25,000 apiece from the cafe.

“Our staff take home more than we get. I feel like I’m a prisoner in my own business,” he said.

Turnover has plunged 40 per cent in the past week, even when compared with a typically quiet school holiday fortnight that ended last weekend.

Bean Bar James Place owner Frank Scorsonelli. Picture: Tom Huntley

Sean Farrell has owned the Myer Centre Newsagency with his wife Karen for the past 16 years and their lease expires in October.

“If things stay as they are now I’ll be giving the keys back and walking away,” he said.

Property Council SA executive director Daniel Gannon said landlords urged change in work-from-home approaches. He said Adelaide had a nation-leading 71 per cent occupancy rate and cautioned governments to regulate “only when regulation is needed”.

“This pandemic has left an invidious footprint on many business owners and investors, but we must proceed with caution when it comes to appropriate government response,” he said.

Sean and Karen Farrell, owners of the Myer Centre Newsagency. Picture: Tom Huntley

Mr Malinauskas said he appreciated just how hard Mr Sassi and hundreds of other city business owners had worked through the pandemic to keep their businesses afloat, making “many sacrifices for the greater good”.

“While we are still grappling with health challenges of the pandemic, my government is firmly focused on the post-Covid economic recovery,” he said. Again emphasising his determination to “lead a government which proudly backs small business”, the Premier listed action to revitalise the CBD, including returning the Adelaide 500 and backing smaller venues with live music funding.

He also highlighted measures to support small and family business, including a dedicated ministerial portfolio, commissioner, advertising campaign and telephone information line.

Originally published as Adelaide small businesses have been smashed by Covid, plead with Premier Peter Malinauskas over rents