The Adelaide City Council partially blames COVID-19 for the debt incurred by 13 stallholders and businesses, some of whom were kept as tenants, despite their debts, to "mitigate" the impact of vacancies.

Thirteen former Central Market Arcade traders collectively owe the council $800,074, an Adelaide City Council quarterly business update for the 2022—23 financial year says.

Of that baker’s dozen, three are in liquidation, and the debt owed by one is expected to be written off.

According to the report, the debt can be partially attributed to the economic impact of COVID-19 restrictions.

“There are various factors resulting in debts for the Central Market Arcade (CMA), including the significant impact of mandated COVID-19 health and safety restrictions which resulted in reduced foot traffic and impact on trade,” the document says.

In January this year, a handful of CMA traders told InDaily they needed more financial support from the Adelaide City Council to help navigate their forced relocation for the $400 million redevelopment.

Various hardship provisions were offered to the nine traders identified in the report (the liquidated businesses were not identified), including rent relief, abatement and payment agreements.

These traders — who collectively owe the council $558,985 — were kept as tenants despite “unsuccessful attempts to recover their debts”.

“This was to mitigate the significantly greater impacts from vacancies that would have arisen if the leases were cancelled, and tenants evicted,” the report says.

An additional three debtors — owing $207,069 — have undergone “years of legal action resulting in liquidation”. The administration advises that a return of funds from an unsecured creditor for any of these traders “will not generate a return”.

Only one debtor — owing the council $34,210 — is proposed for a “write off”, as external legal action has not been successful.

“We understand that this debtor has relocated to a regional area and liquidated all assets. As such, the ability to recover is limited and highly unlikely without significant cost and with no guarantee of return,” the report says.

Director of city services Tom McCready tells CityMag in a statement a “small number” of traders were in arrears with lease payments, and debt write offs will proceed.

“To ensure continuity of the vibrancy of the market, there was a conscious decision at the time to allow the tenants to keep trading,” he says.

“The City of Adelaide also provided ongoing support to all Market Arcade traders during the pandemic and helped identify alternate premises for those wishing to continue their business beyond lease expiry.”

More than 60 specialty traders in the original Central Market Arcade, a circa-1960s mixed-use retail and dining precinct which abutted Chinatown’s Adelaide Central Market, were formally notified in December 2019 they would be evicted to make way for the redevelopment.

Most of the traders left the Arcade in June this year to make way for construction of the revamped site, which will include hotel, retail, residential and office use, and will reach a height of 37 storeys.

The City of Adelaide’s website states the Arcade in its former form represented an “under-utilisation of the land’s potential” and was characterised by a “dated appearance”, “ageing infrastructure”, “inactive frontages” and a lack of connections through the site.

The redevelopment aims to foster a “local diverse and multicultural place” that responds to consumer needs, the website says.

CityMag asked the City of Adelaide for information on the traders and the types of fees that make up the debt. A spokesperson for the organisation referred us to a line from the report which says, “Given the personal nature of detailed debt information, this report provides a high level summary and does not provide names”.

Historical Arcade presence Archie the Elephant does not owe the council money

Clément Labaere, of French patisserie Maison Clement, now located in the Chancellor Hotel, is not one of the former traders who owe money, but he is critical of how the council handled the redevelopment.

“The council is obviously overwhelmed by this kind of redevelopment,” he says.

“The Arcade was definitely due for a redevelopment or a makeover but the council is not fit to manage the ‘heart’ of the Central Market Arcade.”

Another former trader, who asked to remain anonymous, says traders were given plenty of warning about the redevelopment.

“We all knew for years we had to move,” they say.

“Started getting told in 2008 that 2018 was the end date, so we got a few extra years.

“We all got 70 per cent discounts on our rent for the last six months, and the last month of June was totally free, subject to being fully up-to-date with your rent.”