Lease cancelled for proposed grocery store in Saskatoon's Midtown mall

The developerbehind a proposed grocery storein Saskatoon's downtown mall now says it isn't going to happen.

Arbutus Properties, the development company that owns thePitchfork Market + Kitchenbrand, said in a news release Thursday it had received "an unexpected lease termination notice" from the mall's owners on Monday.

"We were shocked and disappointed that we can't proceed," said Jeffrey Drexel, Arbutus Properties president.

Midtown administration did not reply to multiple requests for comment from CBCThursday.

Other local media reporteda statement from Midtown said that "unfortunately, after over two and a half years of working with Pitchfork, the tenant has failed to meet its lease obligations and will not be opening at Midtown."

Drexel said the company had secured a 10-year lease with an option for a 10-year extension, but it had a stipulation thatthe store had to be complete byJanuary 2024.

Arbutus was not going to be able tomeetthe deadline. The developer said Thursday it didn't expect the store to be ready until sometime in the summer or fall of 2024. The company had hinted at an earlier completion date in the project's early stages.

The release from Arbutus Thursday blamed the delays on the extra time and resources the developer put toward its affordable housing development in Saskatoon's Rosewood neighbourhood. That development experienced its own turbulenceafter the city rejected a request from Arbutus to start constructionbeforefinishing required sewer upgrades.

According to a news release earlier this week, the sewer infrastructure was later completed and the affordable housing construction is expected to be completed and occupied in early 2024.

But Drexel said that while the delay may have initially been related to the housing development, itismore dependent on properly constructing the grocery store and fine-tuning it for long-term use.

"This is a 20-year lease, right? We're not talking about two years here. We've got to get this right," he said.

Lease change proposal met with termination

Drexel said Arbutus proposed delaying construction until January 2024, along with some other changes to the lease agreement to accommodate that.

He said those changes included asking Midtown to defer rent payments from before the store's completion to after it was operating, and getting Midtownto agree not to cancel the lease midway through construction because Arbutus hadn't met the original agreement.

Instead of a counter-proposal, he said, Midtown Plaza responded with a notice to terminate the lease. Drexel would not share the notice or the proposal sent to Midtown administration, citing legal concerns.

"I can't put words in their mouths, but we kind of expected they would work with us in some capacity," he said.

When asked for comment about the termination notice and if there are plans to push for a grocery store in the mall or elsewhere downtown, the City of Saskatoon declined to comment, saying it was "a business matter between a landlord and a tenant."

According to Arbutus, this is the end of Pitchfork Market + Kitchen at Midtown.

"As I see it, we're probably going to pivot and look to either another market or another neighbourhood and re-evaluate downtown at a later date once we figure out if there's a store, if there's a location downtown," Drexel said.

Lack of grocery store in downtown a 'bit of a blow'

The cancellation means Saskatoon's downtownwill remain a grocery storedesert, saidSylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University.

"For food retailers it's not a natural place to do business," he said.

"You can find restaurants, but retail-wise there's not much going on, and that's kind of how you define what a food desert is."

A food retailer in the mall would attractmore shoppers, saidCharlebois.

"You actually can go there every day or every two days, so that's a really important tenant to lose," hesaid.

Overall, Charlebois said it's a "bit of a blow" to Saskatoon, which is working to build a vibrant downtown.

Beyond sports games and large events,"the most powerful magnet a city can have is food and drinks," he said.

It is unclear what will fill the space or if the mall plans to fill it.