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HomeMy WebLinkAboutThe Lucknow Sentinel, 2016-09-07, Page 14Wednesday, September 7, 2016 • Lucknow Sentinel 5 Lucknow's Knechtel Food Market closes after business dispute Kincardine's SuperWalk for Parkinson's becomes `Walk -It', moves to Port Elgin Darryl Coote Reporter Lucknow's lone grocery store closed Sept. 1 after a breakdown in negotiations with its landlord over unpaid rent. Brian and Kathy Knechtel, owners of Knechtel Food Mar- ket, made the announcement via the store's Facebook page Aug. 26, stating the decision follows years of being "unable to negotiate fair market rent" with the landlord company, 686687 Ontario Ltd. However, president of 686687 Ontario, Bob Krupp, told The Kincardine News and The Lucknow Sentinel in an email the issue is not about establishing fair rent but unpaid rent on the property since October 2014. "The short version is that the tenant decided to stop paying rent as of October 2014 and claimed that it had been paying rent above market rate for many years," Krupp wrote in the email. Knechtel said Krupp's explanation is "essentially cor- rect," but it didn't explain the tenants' reasons for foregoing rent or a legal process that led to the situation. The original 1987 lease was made between the landlord company -- which is owned by Krupp, Ken Zurbrigg and Knechtel -- and expired in 2002, he said. After the lease expired the parties entered a verbal month-to-month agreement on rent, which was lowered at that time. The parties also verbally agreed to sign a lease in the future if one was deemed nec- essary, Knechtel said. "But we never stated that we would sign a new lease at that same rent that had been set back at that point," he said from his store two days before it was set to close. A small-town grocery store cannot be charged rent of 14 years ago and operate, Knech- tel said. "It's just not economically viable for a business like ours to be paying the rent that was in place back in 1987 or even 2002. It's just not viable any- more," said Knechtel. In October 2014, Knechtel said, Krupp insisted that either the Knechtels sign the lease at the same rent set in 2002 or acquire the shares of the other two partners. Kne- chtel said he then withheld rent in order to negotiate a fair rate. Krupp said he met with Knechtel several times throughout the spring and summer of 2015 to resolve the issue, but "the tenant remained steadfast in not pay- ing even an amount of rent that it viewed as `market rate:" In a follow up telephone interview Krupp said if Kne- chtel had paid what he deemed to be fair then at least the parties could have negoti- ated over the difference. "If [Knechtel] didn't like the rent amount, why didn't he pay us less rent? You can't go to zero ... Pay the lesser amount and fight over the dif- ference," Krupp said. Knechtel rebutted that Krupp was not open to nego- tiation on the issue so there was no point in mentioning a figure. In November 2015, Knech- tel said Krupp asked him to enter into a dispute resolution process overseen by Kincar- dine's Jacques Law with the purpose of the Knechtels tak- ing over all shares of the land- lord company. Krupp stated that the dis- pute resolution process resulted in a purchase and sale agreement that was exe- cuted by all parties on April 19, 2016. But, "the sale of shares did not close," Krupp wrote with- out explanation. The issue, Knechtel said, is that prior to being a grocery store the property was home to an automotive business that had gas pumps and stored used oil. If the land is contaminated it could affect the property's value and its owner's ability mortgage it, Knechtel said. The cost of the environ- mental assessment, Knechtel said, would be between $16,000 and $18,000, "but the real problem becomes if it reveals there is some kind of problem with [the property], which would require remediation to make it clean, and that could get very costly." Knechtel then offered the other two parties an agree- ment for their shares that included splitting the costs of the environmental assess- ment and any other costs that might be incurred in that process. Krupp turned it down, Kne- chtel said. This issue over the environ- mental assessment is a "red herring," said Krupp over the phone. While Knechtel said the landlord company agreed to split the environmental assessment costs among its three shareholders, Krupp said it never did. "The company never agreed to do an environmen- tal assessment. If he wanted to do an environmental assess- ment, he wants to do it at his own costs," Krupp said.':..He was the sole proprietor on the property the whole 30 years. He was there when the build- ing was constructed. Our friend and shareholder [Zur- brigg] did the contracting. He dug the whole. There is no issue there.' The Knechtels were then presented with an offer that stipulated they would have to pay all fees in connection with the environmental assess- ment and any others required to clean the property. Knechtel said that risk was too much for him to take. "It's a risk. Absolutely it's a risk. It's a huge risk," he said. "It's a risk if you acquire the property from him without having it done ... We didn't feel comfortable that we should take on the complete risk particularly under the situation:' Knechtel said the proposal stated he would have to cover all costs of the dispute resolu- tion process. "This agreement basically changed that so that we'd be paying the full costs of this entire process, which is over several months with Jacques Law," said Knechtel. Again, Krupp said this argu- ment is another red herring. "The company covers the legal fees. He buys the com- pany, then yes, it would be his Darryl Coote/Reporter Knechtel Food Market was open for 30 years in Lucknow. responsibility," Krupp said. Following the dissolution of this deal, the landlord company issued a 15 -day notice to resolve the arrears by July 27, 2016, or the tenant would be evicted from the property. The closure was momen- tarily staved off by concemed citizens, Krupp said, who stepped up and offered to help resolve the problem. Knechtel explained mem- bers of the Lucknow commu- nity approached Krupp to help the Knechtels purchase the shares, "but when they went to talk to them, they jacked the price from what their last offer was." Krupp said the price was higher than what was offered following the dispute negotia- tion process, but the increase was to cover the additional legal fees. "This caused us more grief, more sleepless nights and more lawyers' fees. It wasn't a high price," Krupp said. Using the angel investors, Krupp continued, would also prevent the need for having an environmental assessment done as only a lending institu- tion would ask for a study of the property before lending money. Either way, the Knechtels said they are done fighting, and not sure what they will do next. "We put far too much sweat and equity, time and effort over the past many years try- ing to keep this operation going and keep a grocery store for Lucknow. It just is not eco- nomically viable, and I'm sure he knows that," Knechtel said. And while Krupp said he'd like to put another grocery store in the location, it is too early to speculate. Knechtel Food Land has been operating in Lucknow for 30 years and has a staff of roughly 20 employees. BlackHorse scores are in for Aug. 23 With the much needed rain, we had our first rain out of the year on Aug. 16. Number 16 went as planned on Aug. 23, with some low scores and great conditions. Bob Parks and Dave Cooper tied in "A" flight with 21 points and they also took the skin money. Mike Kittel had a good round and won "B" with 23 points. Glen Chaput was second with 20. Mike took the only two skins in B. Ray Guay won "C" with 23 points followed closely by Ron Stanley with 22. Dave Plourde and Ron won the skins in C. Closest to the pin winners were Mike Kittel, Roger Amelotte, Glen Chaput, Mike Whitcroft, John Cooper and Dave Maus. On Sunday, Sept. 11, 2016 walkers from Port Elgin, Kincardine and the sur- rounding area will come together in North Shore Park to raise funds to sup- port those living with Par- kinson's in Southwestern Ontario. This year, Parkinson Society Southwestern Ontario (PSSO) will be presenting the first ever WALK -IT for Parkinson's, which will be replacing the Parkinson's SuperWalk. All funds raised at the event will remain in the region. At 2 P.M., pledged walk- ers will put on their pedom- eters and begin their 1-5km trek to join the 1,000,000 Step Challenge across the region. Shelley Rivard, CEO of Parkinson Society Southwestern Ontario, is excited to see what the first-ever WALKwill bring. "We wanted to add some- thing new and exciting to our walk, something that can be incorporated into the lives of our participants year round," said Rivard. "With WALK -IT for Parkin- son's focusing on exercise and movement, we can achieve just that" Primary symptoms associ- ated with the disease include tremor, rigidity, slow move- ment, postural instability, loss of balance control, soft speech, and sleep distur- bances. Other symptoms include depression, anxiety, dementia, memory prob- lems and difficulty with communication. To register or find out more information visit www. walk-it.ca SUDOKU This WEEK'S PUZZLE SPONSORED SY w . Mitchell Twolan, LRR Broker of Record Lake Range Realty Ltd. 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