Carmine’s in Times Square sues landlord to stave off eviction

Restaurant received notice of default for $2.9M in unpaid rent

New York /
Jan.January 07, 2021 04:00 PM
Carmine’s battles landlord over unpaid rent. (Getty, Carmine's)

Carmine’s battles landlord over unpaid rent. (Getty, Carmine’s)

It’s been rough going for almost all restaurants, but especially those in Times Square. With tourism all but dead and offices nearly empty, the pandemic has ravaged their customer base.

The landlord of one Times Square staple, Carmine’s, filed a notice of default for unpaid rent against the once-popular Italian restaurant, according to a suit Carmine’s just filed in state court.

Carmine’s brought the case to stave off eviction. It’s quite a fall for the family-style Italian restaurant, which has been in Times Square for about 30 years and was the country’s second-highest-grossing independently owned restaurant in 2017, bringing in $33 million from 1.4 million guests, according to Crain’s.

Carmine’s asserts that it cannot be in default to landlord Paramount Leasehold because the pandemic has made it impossible to do business.

It is also seeking a “Yellowstone injunction,” which temporarily suspends the period in which a tenant has to cure a default.

Moreover, Carmine’s alleges that the default filing constitutes commercial tenant harassment by the landlord. Last year the City Council passed a bill to stop landlords from harassing small businesses affected by Covid.

Carmine’s has been closed since Gov. Andrew Cuomo first shut in-person dining in March. While businesses could still fill take-out orders, Carmine’s said it would have lost even more money doing that.

In June, Cuomo allowed restaurants to serve tables outside. However, Carmine’s said a Con Ed worksite in front of the restaurant makes outdoor dining “physically impossible.”

Last month, Gov. Cuomo again shut down indoor dining in New York City and the restaurant has remained closed.

In the same month, the landlord sent Carmine’s notice alleging that it owes $2.9 million in rent and faces penalties for failing to continuously operate its business, according to the lawsuit. The notice gave Carmine’s until Jan. 11 to pay.

The restaurant said in a statement that “the government continues to fail the hospitality industry with crippling restrictions and no targeted relief for restaurants.” The restaurant is asking Congress to pass The Restaurant Act, which would provide financial assistance to restaurants.

The Cuomo administration is offering grants up to $5,000 for restaurants hurt by Covid. That’s less than two-tenths of 1 percent of Carmine’s unpaid rent — and the restaurant doesn’t qualify anyway because its revenue was higher than $3 million in 2019.

New York restaurants are faring worse than their counterparts in other states, according to a recent survey. Fifty-four percent of New York restaurants said they would likely not survive the next six months without federal relief, according to the most recent survey by the New York State Restaurant Association and the National Restaurant Association. That’s compared to 37 percent of restaurants nationwide.

Paramount Leasehold L.P. is controlled by Levin Management and Rosemark Management.

Neither of the companies responded to a request to comment.


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