By Charlie Senack
As inflation continues to send prices skyrocketing, Wellington West businesses are feeling the pinch of tough economic times.
Devon Armstrong, interim executive director of the Wellington West BIA, said the community saw a high turnover in leases through 2023.
“There are businesses that are closing but there are also new ones opening every week. The turnover is high which keeps vacancy low,” he told KT. “A lot of businesses saw pain over the last couple of years and with loans coming due, there are some tough decisions that some people are having to make.”
In January, Canada Emergency Business Account [CEBA] loans had to be paid back, almost four years after they were introduced to help offset losses small businesses felt during the first waves of the COVID-19 pandemic. Nearly 900,000 Canadian businesses applied, totalling $49-billion in emergency relief.
While eligible businesses could keep up to $20,000 of the max $60,000 loan, the government will charge five per cent interest to any businesses who didn’t comply by the mid January deadline. They would then have three years to pay.
As of March 2023, only 10 percent of businesses paid back their loans.
“The lockdowns and government employees not being in their offices buying stuff has been difficult. It’s hard for a lot of smaller businesses to transition to having a digital store. If you are brick and mortar, you need foot traffic,” Armstrong said. “I know some businesses, even if they were doing ok, they are making less money now and might decide to make a life change. I know we had a few businesses who just wanted to do something different after a couple of tough years treading water.”
The Yard closing
In late December, The Yard, Ottawa’s only indoor skate and bike park located near City Centre, announced they would be forced to close this spring.
In an emailed message to customers, owner Anthony Bereznai said the tough decision was made due to rising costs and financial pressures.
“Our current lease ends at the end of March and I have been trying to negotiate a new lease with our landlord. Unfortunately, we have not been able to agree on terms that the business can afford,” Bereznai wrote. “We have also been searching for other potential locations for the past year, but no suitable options have been found.”
The Yard opened in an old warehouse at 265 City Centre Ave. about five years ago.
Bereznai said financial pressures caused by the COVID-19 pandemic did not make it easy to survive. The business was forced to temporarily close during various rounds of lockdowns when sporting activities were deemed non-essential.
“Between COVID closures, inflation and high interest rates, it has been a very difficult five years to be running a new business, leaving The Yard in the vulnerable position it is in,” he said. “Based on recent sales levels, we cannot afford our current costs, let alone an increase in rent for the next five years. To be viable, the business needs both healthy park attendance and shop sales.”
Bereznai said that while park business has remained stable, shop sales have dropped as people spend less on leisure activities.
The Yard currently pays about $40,000 a month in rent, taxes and interest payments. The indoor park is expected to close in March 2024.
Won Ton House closes
Also in Wellington West, Won Ton House, located at the corner of Wellington Street W. and Warren Avenue, announced they were permanently closing. Owner Thomas Tang said slower foot traffic and difficulty recruiting staff were to blame.
The popular Chinese eatery first opened on Richmond Road in the 1970s and serves breakfast in the morning and Chinese food in the evening. When that building burned down a few years later, the restaurant moved to its Wellington location.
“Over the intervening half-century, it has been a pleasure and honor to offer fine Chinese dining to our long-time and more recent patrons,” a sign on the door read. “We hope you have enjoyed your experiences at the Won Ton House as much as we have gratefully enjoyed serving you. But to everything there is a season, and it is with very mixed feelings that we inform you that our last day of operation will be December 16, 2023.”
While the Wellington Street West business landscape is changing, Armstrong from the local BIA said new tenants are continuing to bring a freshened flavor to the street. In just the last six months, over 20 new places have opened including: Kaleidoscope Sky Tattoo and Art House, Catharsis Psychology, Marble Slab Creamery, and Capital Cold Press.
“We are seeing a little bit more in terms of those lifestyle, spa, beauty treatment, hair salon type businesses opening up. But our trend hasn’t totally changed here like it has in Westboro,” said Armstrong. “You still do see a lot of that restaurant and retail main strip. One way we work together well with Westboro is that a lot of people like to explore a larger area and will go to a gym in Westboro and then a restaurant in Wellington West.”
Stella Luna closes Wellington West location
Local gelato shop Stella Luna has laid off all its staff and closed its Wellington St. West location amid public backlash.
Employees were told they would be losing their jobs by email on Dec. 12. Staff who had been at the company for less than a year were given one week’s notice; longer-serving employees were given two weeks.
Stella Luna’s owners did not respond to KT’s requests for comment. In a statement posted to Facebook, they said economic conditions have affected their ability to run the business.
“In an effort to survive the economic downturn this winter, and after four years of nationwide financial uncertainty, we have had to lay off almost all of our staff,” the statement read. “Our family members will continue to operate the business throughout the winter in the hopes that spring will present new opportunities and a stronger economy, allowing us to welcome our team back.”
Stella Luna’s location in Carleton Place closed permanently a few weeks ago, with no reason given for the closure.
Just before the Christmas break, the gelato shop abruptly announced their Wellington St. W. location would permanently close on Dec. 23. They now have two remaining locations: one in Merrickville and the other on Bank Street near Sunnyside in Old Ottawa South.
Around 50 people worked for the family-run business as of earlier this year.
