A perfect storm of bad timing has CBD trader Gerard Kelly believing he won’t be compensated when the Metro Rail Project destroys his three 12-year-old businesses.
While the State Government has pledged unspecific compensation for affected businesses, the City Square hospitality operator thinks he will miss out.
This is because his lease expires late this year and non-response from his landlord has him believing he won’t be offered a renewal. Any subsequent compensation deal, he says, will be between the owner of the property and the State Government.
“In business you can’t feel entitled when things don’t go your way,” he said. “But it’s terribly frustrating to have it end this way.”
“It’s not like we’ve failed through any fault of our own. So, after building these businesses for 12 years, we lose at every turn.”
“Not only does it look like we’ll miss out on the value of our fit-out, or the good will we have built up, or any assistance to start somewhere else, but we’ll also have redundancies to pay our fantastic staff who we don’t want to lose,” he said.
“There is no opportunity to leverage off the success we’ve had here in a difficult trading environment for more than a decade.”
Mr Kelly said he was seriously considering whether closing now and paying out the rest of the rental agreement might not be a more financially-prudent avenue than trading until the end of 2016.
“Unless we can find a place to move really quickly, we stand to lose everything,” he said.
Mr Kelly said he had not yet added up the potential financial loss to himself and his business partner brother.
“It’s only now that we’re sure that there is no possible way to continue trading during the construction of the Metro Rail,” he said.
The City Square will be used as a construction site for potentially five years from 2017.
Mr Kelly is an active member of the CBD business community. He sits on the Lord Mayor’s Commendations Awards Advisory Group and is president of the City Precinct.
A Metro Rail spokesperson said: “The Melbourne Metro Rail Authority is working with property owners and business tenants in City Square on a case by case basis to assess how the project may affect them and to identify what options for assistance might be appropriate to their individual circumstances.”
“These direct discussions are ongoing as planning for this city-shaping infrastructure project in the heart of Melbourne progresses. Any decisions on the existing lease is solely determined between the lessor and lessees,” the spokesperson said.