June 02, 2020
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Portland businesses call for rent freeze after some landlords refuse to budge

Troy R. Bennett | BDN
Troy R. Bennett | BDN
A sign outside Johnson's Sporting Goods on outer Congress Street in Portland on Sunday displays an encouraging message amid the ongoing coronavirus pandemic.

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PORTLAND, Maine — As the city increasingly shut down heading into April, Portland officials told businesses and residential tenants to communicate with their landlords about paying rent. Linda van der Does, who owns the jewelry store Toko Indo, took their advice.

She reached out for help establishing a payment plan for the store’s Exchange Street location in the Old Port. But her landlord, Joe Soley, did not see it the same way. “He asked for April rent” on the first of the month, van der Does said, and “was not ready to have any conversation.”

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Van der Does is one of dozens of business owners who have come forward asking for formal rent relief from the city. As of Monday morning, many have signed onto a letter to the Portland City Council asking for a rent freeze as the coronavirus puts them in a difficult situation: Their businesses are closed, but they must pay rent unless they get reprieves from landlords.

In van der Does’ case, she worries that she is Exhibit A for landlords who see the pandemic as an opportunity to get more lucrative tenants into their properties. Shortly after she asked for help, her space was offered to a neighbor for expansion.

“We have been a tenant for 10 years and have been reminded on several occasions that our shop is worth more,” van der Does said.

While small businesses can apply to new federal and state programs aimed at helping them weather the virus outbreak, loans used to cover Portland’s high commercial rent may not be fully forgivable under the Paycheck Protection Program, a centerpiece of the federal response. A result may be that small shops like those dominant in the Old Port are pushed out.

“It’s going to be a particular problem for very small operations in Portland,” said Mary Alice Scott, executive director of Portland Buy Local.

Soley, one of the city’s dominant and most notorious landlords, is at the center of complaints in the Old Port. A half-dozen commercial tenants told the Bangor Daily News he has not budged on rent. A phone call to Soley’s property manager, P.J. Roberts, was not returned.

Soley has clashed with Portland officials in the past. In 2009, the city evicted two dozen residents in his buildings because of fire code violations. In 1998, he was sued by four students who had rented a condemned Exchange Street apartment. Soley reportedly seized their belongings after they refused to pay rent when problems were not fixed.

The Holy Donut, a popular local chain that operates three retail locations and an office in Portland and Scarborough, recently approached its four landlords with rent compromises. Three agreed. CEO Jeff Buckwalter said Soley, who owns the Exchange Street building where the company’s flagship is located, did not. April rent is due, he said, but he is not able to pay.

“I consider our landlords partners,” Buckwalter said. “None of us should have to [weather] this pain alone. We all share in this pain together.”

Portland issued a stay-at-home order last month due to the virus that officially closed nonessential businesses, though many had shut down before then. Last week, the city passed a proclamation asking landlords to halt lease terminations, evictions and rent increases for affected commercial and residential tenants. The obligation to pay rent was left unchanged.

Laura O’Meara, who owns Casablanca Comics in the Old Port, said those measures are not enough to prevent mass layoffs and closures. She drafted a letter asking for a full-scale rent freeze, as has been called in other U.S. cities. Twenty small-business owners have signed on.

“I hate confrontation,” O’Meara said. “I’m just trying to figure out a way where we can all work together to survive.”

Andrew Zarro, who owns Little Woodfords, a coffee shop on Forest Avenue, said he left multiple messages for his landlords heading into April, but got no response. When requests for “wiggle room” on the payment date were denied, Zarro launched a GoFundMe drive.

He had never been late on a rent payment since the coffee shop opened and did not want to risk giving his landlords a reason to evict him. Donations surged above the requested amount, enabling Zarro to write a rent check on April 1 and use rest to support furloughed employees.

The fundraiser bailed him out for April, but Zarro said his and other businesses “don’t have a whole lot of room to get creative.”

Many other small-business owners said that their landlords expected the issue to resolve when commercial tenants applied for federal loans made available last week. Small-business owners have applied for those loans, but 75 percent of forgivable loans under the Paycheck Protection Program must go to payroll, leaving only up to 25 percent for non-payroll costs, including rent.

“Commercial rent prices in Portland have become astronomical,” said Colleen Calder of Aphrodite Salon in Monument Square, another small business that signed onto the letter. “How are we going to pay these grossly inflated numbers if we don’t have jobs?”

Dirigo Management manages properties at 1 City Center in Monument Square. In a statement, Dirigo said it wants to make sure that it is “part of the solution” and is working with tenants to “hold rent or at least keep any increases to a minimum.”

“It sure would help to have something that makes it so that landlords don’t force you to pay rent in April and maybe even in May, until this is all over with,” said Doug Fuss, owner of the Old Port Irish pub Bull Feeney’s and another Soley tenant.

“It’s stressful and there’s a virus going around.”


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