Coronavirus: Queenstown business owners struggle to pay rent

Business owners want the Government to step in and help.
Business owners want the Government to step in and help. Photo credit: Getty

Belinda McCammon of RNZ

A Queenstown tourism owner says many small business owners in the town won't be sleeping well as they grapple with how to pay their commercial rent.

Matt Price, who has owned the Black Sheep Backpackers in Queenstown for the past 12 years, says the government must step in and help business owners out.

"Landlords and tenants need help, we've been waiting a long time. We're four weeks into this. Are people sleeping well at night? A lot of small business owners won't be sleeping well at night. We need that help and we need it now.''

Like many business owners, while Price owns his business, he leases the building from a landlord.

Up until lockdown "we were cranking as normal as anyone would expect in peak season'', he said.

"As soon as we rolled into March over the space of about of a week we rolled down to 75 percent and then 50 percent and all of a sudden zero percent and the doors have closed, that's it.''

Price said he'd been lucky and his landlord charged him zero rent.

"It was amazing and really appreciated.

"Now we're in good faith negotiations to see what we can come up with. I think it's just a really tricky position for landlords and tenants because we've got no guidance for what we do.

"At the moment the landlords are being told to be kind, but we need some guidance like Australia does, there's none. The tenants have got none and the landlords have got none. We just try to muck through this.''

Queenstown Chamber of Commerce chief executive Anna Mickell said a recent survey of its members found over 60 percent were satisfied with the arrangements they had with their landlords.

"So yes, there is dissatisfaction and there have been some arrangements that have not worked out well but by and large the majority of our members surveyed last week are happy with the response from the landlord.''

Mickell believed most landlords in Queenstown recognised the severity of the situation and were prepared to work with tenants to rebuild their businesses.

Asking for help

But Clutha-Southland MP Hamish Walker said he has spoken to dozens of businesses in downtown Queenstown who were having to pay thousands of dollars in rent each week with no further revenue for months to come.

He wrote to Finance Minister Grant Robertson last week asking for immediate assistance for commercial tenants in the town.

Walker, in the letter, told Robertson there was no reprieve in sight for these businesses.

"If there was some sort of support or direction given to these commercial tenants, which would enable them to pay their rents, it would mean more business survival in Queenstown, which has already been hit so hard.

"I ask whether there is any support for these commercial tenants coming as many can only survive the next few weeks, not months.''

Price was not alone.

RNZ has spoken to several commercial tenants but none would go on the record for fear of upsetting their landlords. But all agreed the situation was bad and unsustainable.

Price agreed. He also had contact with many business owners in Queenstown who were concerned about what were they going to do.

"They're asking 'Am I going to move into my accommodation business because I've got to let my house go? Can I borrow money?'."

Another added stress for Price was a rent review.

"We've been proposed a 40 percent rental increase for our property. The tricky thing for tenants and landlords is that commercial rent reviews haven't been frozen.

"So everyone who has that lease is in the same situation, they can't take COVID-19 into account, we have to look at it as how business was January 1st.

"There's no help for cashflow. We're just going backwards.''

RNZ

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