Demel Bakery ditches the Plaza, sues Elad

February 22, 2010 10:05AM

The legendary Demel Bakery is planning to walk away from a 10-year lease at The Plaza hotel’s grand concourse and is suing developer Elad Properties for fraud, the Post reported. Demel is claiming that Elad lured the Viennese bakery to the below-ground mall under false pretenses in February 2008 — namely, that the location would put it in the midst of retailers like Harrods, Louis Vuitton and Gucci. Elad, which purchased the famed hotel for $675 million in 2004, has not followed through, according to the suit, filed last week in Manhattan Supreme Court. The basement’s Plaza Retail Collection, part of a $450 million hotel renovation, is now “populated with unknown… retailers or — worse — vacant, unleased space,” the suit claims. Demel, which stopped paying rent to The Plaza in February 2009, is the only restaurant in the 160,000-square foot mall and could leave within weeks, according to sources, and other retailers are threatening to follow. [Post]