Rents in arrears | Things are heating up between Guzzo and his landlords

It’s not just at Marché Central that Cinémas Guzzo has strained relations with its landlord. The owners of the buildings that house the Méga-Plex Saint-Jean and Méga-Plex Taschereau have taken the Quebec chain to court to get paid and ask for the right to evict it.

Unpaid rent, an inability to meet repayment plan deadlines and cheques that were “not honoured due to lack of funds”: this is what the cinema operator is being accused of in two motions recently filed in the Superior Court of Quebec.

These disputes involve the St-Luc St-Jean Shopping Centre and a company owned by businessman Howard Szalavetz. The plaintiffs are respectively the owners of the buildings that house the cinemas located in Saint-Jean-sur-Richelieu and Longueuil.

The first is claiming $11.4 million – an amount that goes beyond outstanding payments – from Cinemas Guzzo, while the second is seeking to recover approximately $322,000, plus interest. Their allegations have not yet been proven in court.

” The one [le cinéma] Taschereau’s case was settled out of court and we are in discussions with the one in Saint-Jean as well, so we will avoid all comments to try to settle this,” said the president and CEO of the family business, Vincent Guzzo, in a telephone interview with The Press.

It was not possible to confirm whether an amicable agreement had been reached in the case involving Mr Szalavetz’s company. The next hearing in the case has been set for 8 August.

Large sums

The St-Luc St-Jean shopping centre is claiming the most money from the Quebec chain. The real estate operator alleges that the Mega-Plex Saint-Jean – which opened its doors in December 2021, during the COVID-19 pandemic – owed it more than $1.5 million in unpaid rent as of July 10.

The complainant alleges that the situation worsened at the end of 2022. An initial plan for repaying the arrears was proposed by the cinema operator in 2023, but the latter did not comply with it, according to the application.

“In September 2023, Guzzo sent the center checks to pay part of the rent arrears of Mega-Plex, which were not honored due to lack of funds, it adds. Despite all the discussions in progress between the parties […] However, rent arrears have worsened.”

In addition to the outstanding amounts, the St-Luc St-Jean shopping centre is claiming nearly $715,000 in “liquidity damages”.

He is also seeking reimbursement of $9.1 million paid to the cinema chain for the development of the complex located in Saint-Jean-sur-Richelieu. The lessor alleges that his tenant was unable to complete the finishing work on the Mega-Plex Saint-Jean “before the end of 2022,” as stipulated in his 20-year lease signed in 2016.

As for the Taschereau Mega-Plex, the arrears go back about two years, according to Mr. Szalavetz’s company. His request also mentions the inability to cash cheques because they were bad and the Quebec chain’s failure to respect repayment plans.

On June 28, the complainant informed the Quebec chain that it was refusing him the right to extend the lease because of his late payments and was asking the court to give him the right to evict him from the premises as of July 31.

This scenario is not expected to materialize, for the moment, given that the case must return to the Superior Court in a week.

Not the first time

The Press had reported last March on the strained relations between Cinémas Guzzo and its owner at Marché Central — the real estate arm of the British Columbia Investment Management Corporation (bcIMC). This pension plan manager accused the Quebec company of similar failings.

The bcIMC claimed 1.8 million from Cinémas Guzzo and requested the termination of the company’s lease at the Marché Central.

In an interview last March, Mr. Guzzo said he had good relations with all his landlords, except for Marché Central. The businessman explained that his three establishments located on the island of Montreal were less profitable than his other cinemas.

Despite a deteriorating business relationship with its lessor, the cinema chain remains present at the Marché Central. The dispute with bcIMC is still before the courts.

With Louis-Samuel Perron, The Press