The Bay at Cherry Lane

It appeared to be business as usual Tuesday at The Bay in Cherry Lane Shopping Centre, which is suing the retailer for non-payment of its lease.

One of Penticton’s largest retailers is more than $600,000 behind on its lease payments and refusing eviction, according to a lawsuit filed by its landlord last week.

Cherry Lane Shopping Centre Holdings Ltd. alleges The Bay, which is owned by Hudson’s Bay Company ULC, hasn’t made a $78,000 monthly lease payment since April 2020, leaving it approximately $624,000 in the hole.

The lawsuit, filed Nov. 13 in B.C. Supreme Court in Penticton, claims HBC owes $85,000 more in taxes and other charges, for a total outstanding of $709,000.

Neither the mall nor HBC, which signed its first lease at Cherry Lane Shopping Centre in 1993, responded to requests for comment Tuesday.

The store was open for business as usual Tuesday with no outward indications of the legal dispute, which is now into its seventh month.

“Commencing in April 2020, the tenant ceased paying rent and other amounts due and owing to the landlord pursuant to the terms of the lease,” states the lawsuit, which goes on to detail the various notices Cherry Lane provided HBC regarding the matter over the spring and summer.

Cherry Lane finally on Nov. 9 served HBC notice that its lease had been terminated, but the retailer has so far failed to leave the premises, according to the lawsuit, which is seeking a court order compelling HBC to settle up and get out.

HBC claimed in September it was actually Cherry Lane that defaulted on the lease by “failing to maintain the Cherry Lane Shopping Centre in accordance with the standards of a ‘first-class regional shopping centre’ and by failing to take extraordinary marketing initiatives during the COVID-19 pandemic,” the lawsuit adds.

Cherry Lane disputes those assertions, noting in its claim the mall has been operating “in accordance with the standards of operation and maintenance adopted by other high-quality community shopping centres of similar size in the province,” while maintaining health and safety standards and undertaking “significant marketing initiatives during the last several months directed at increasing footfall at the shopping centre.”

HBC is relying on the same claim of substandard marketing in a separate lease dispute at a shopping centre in Victoria, according to the Cherry Lane lawsuit.