'We literally ran out of money': Calgary Legion forced to close pub, sell building

The story behind the profitable 1918 pub’s closure The story behind a popular pub's demise is one including vacant office space, rising taxes and declining Legion membership.

It was supposed to be a model for Legions across Canada but, six years after it opened, the Royal Canadian Legion No. 264, known locally as the Kensington Legion, has closed its public restaurant and bar and sold its building, becoming a tenant in the property it once owned.

“It's sad from a couple of points of view,” said Alan Pentney, treasurer of the branch. “We could not generate the revenues we had expected. We wanted to put them back into the community. We had projected possibly a $250,000 in profits if everything had gone well, which would have gone back into the community.

“It’s also sad because we has such an excellent space that we were able to provide service to people.”

Legion No. 264 moved into its digs at 1918 Kensington Road as part of a land swap with Truman Development Corporation in 2017. The deal saw Truman build a four-storey office complex, with a street level pub, and exchange it for the Legion’s large property next door.

Under the new model, the Legion expected three revenue streams: memberships, office space leases and the 1918 Tap and Table Pub.

“The 1918 Tap and Table was very successful. For the first two years, you needed reservations to get in here,” said Pentney, “and then of course, COVID came along, but it still remained very popular.”

While the Tap and Table was profitable, it did not make enough to offset losses in the other revenue streams.

The Kensington Legion was hit hard by Calgary’s rising office vacancies.

“The leasing situation in all of downtown Calgary suffered drastically,” said Pentney. “So it was virtually impossible for us to lease space, especially since we didn't have the revenues to create the improvements to attract people into the space.”

Membership sales also fell. The Kensington Legion once claimed to be Canada’s largest, with over 4.500 members. In 2017, when it moved buildings, that was down to 1,400. Currently there are only 400 members on its roll.

“We have lost roughly 1,000 members over the past three years. combination of COVID and the fact our lounge was shut down and other legions were open,” said Pentney, “so people moved their memberships either didn't take up memberships or moved.”

Pentney said city property taxes were the Legion’s largest expense and the one that eventually forced the sale.

“We literally ran out of money. And so we had to offer the building up for sale,” said Pentney.

The Legion asked council for a break on its property taxes but was turned down. The area councillor told CTV News that council tried to work with the Legion, but eventually had to make a decision that was fair for everyone.

“The critical question for us, of course, is, whatever we do, how does that preserve equity across all other businesses that went through difficult times during COVID?” said Ward 7 Coun. Terry Wong.

“In other words, a tax relief of some sort, that would have introduced inequity, and the potential for others coming forward (to ask for the same break).”

Last week, the Legion completed the sale of its building to Ronmor Holdings Limited for $7.5 million. As a part of the deal, the Legion will lease the second floor of the building for the next 50 years.

Legion members are meeting Monday night to discuss what to do with the money from the sale. They are also looking for ways to bring back some of those members who left and attract new ones to the Legion.

Despite the financial difficulties the Kensington Legion faced, Pentney still believes the model is a good one for Legions in the future.

“At the end of the day, we're coming out ahead anyway, in that we have space – we have a lease for 50 years at a very reasonable terms and a home,” said Pentney.

“So, I still think it's valuable option for Legions to look at – getting rid of old buildings that are getting run down and moving into newer spaces and, perhaps down the road, Legions will need to amalgamate and join each other.”

Pentney says a new pub is expected to open in the spring inside the space previously home to the 1918 Tap and Table. In the meantime, the Legion’s members-only space will be open to the public until the new restaurant and bar is running.