Oak Room to close amid dispute with Plaza

May 06, 2011 09:07AM

The owners of The Plaza Hotel’s Oak Room have decided to close the legendary restaurant amid a bitter dispute with their landlord.

According to the New York Times, Oak Room owner Eli Gindi gave The Plaza a 90-day notice of departure three weeks ago, after landlord Elad Group said the Oak Room would have to either cancel its lucrative “Day and Night” Saturday afternoon parties or pay more than twice its current rent. That brought lease negotiations to a halt, prompting Elad to sue Gindi for $33.3 million over “numerous violations of the lease, unacceptable activities and significant financial arrears.”

Specifically, Elad took issue with the raucous nature of the “Day and Night” parties, which irritated full-time residents of the hotel, as well as with their subpar Zagat ratings and failed heath and safety inspections that tarnished The Plaza brand. Elad also said the Oak Room owes upwards of $900,000 in back rent to the hotel. The Oak Room’s goings-on have detracted from Elad’s “costly efforts to Restore The Landmark Plaza Hotel to its former glory, in a city where the amenities and manners of cosmopolitan society have increasingly given way to the rude and the ordinary,” the lawsuit says.

But Gindi contends that the “Day and Night” parties have been a saving grace for the restaurant as it struggled to compete with Todd English’s new Plaza Food Hall amid the recession, and that he could not afford to keep the restaurant open without them. His lawyers have also been quick to make unsubtle references to Charlie Sheen’s infamous trashing of a Plaza Hotel room in October as evidence that “Day and Night” parties have been the least of Elad’s problems.

The Oak Room’s closing date has been set for July 31, and The Plaza said it is searching for new operators. [NYT]