A restaurateur signs a 15-year lease, then has a debilitating stroke. What happens next plays out in two very different versions, depending on who’s telling the story.
When Keith McNally suffered a major stroke in 2016, the famed restaurateur behind Pastis, Balthazar and Minetta Tavern feared his career and his body had collapsed for good. To make matters worse, the man who once ruled New York’s dining scene suddenly found himself trapped in a business deal he could no longer execute. He’d leased a Meatpacking District space to reopen his iconic restaurant Pastis, backed by a $1 million personal guarantee.
In his memoir “I Regret Almost Everything,” McNally recounts the episode as a near-tragic twist. Unable to walk or speak clearly, McNally put his daughter Sophie in charge of the business. He says she begged the landlords, Aurora Capital’s Bobby Cayre and Jared Epstein, to release him from the lease. They refused, he wrote, at the urging of a mysterious “third partner,” later identified as William Gottlieb Real Estate’s Neil Bender. Facing financial strain and depression, McNally describes feeling cornered.
“I couldn’t possibly afford to lose a million dollars, yet I was in no condition to build a restaurant,” he wrote.
Epstein tells a very different story. In his version, there was no threat to execute the guarantee, no heartless landlord tightening the screws on an ailing tenant.
“We were never going to go after his personal guarantee,” Epstein said in a phone interview. “Forget it being not a good thing to do as a business person. I believe it’s a terrible thing to do as a human being — to prey on someone after they had a terrible medical problem in their life.”
According to Epstein, Sophie reached out soon after her father’s health crisis to say she would carry the project forward. But when their investor pulled out, she needed time to find new funding. Rather than push back, Epstein said, Aurora worked with the McNallys to find potential partners. One of those introductions, to restaurateur Stephen Starr, ultimately revived the project. Starr partnered with McNally to reopen Pastis in 2019, to instant acclaim and two stars from The New York Times.
Following the restaurant’s success, McNally and Starr went on to open locations in Miami and Washington, D.C.
Epstein said he was especially miffed by McNally’s description of him in the book as “obnoxious.” He suspects the jab stems from a later clash, when he privately messaged McNally after the restaurateur posted something “very insensitive” on Instagram following Hamas’ October 7 attack on Israel, he said.
For Epstein, the book’s portrayal of events feels like misplaced resentment.
“We saved his legacy brand,” Epstein said. “Instead of vengeance, he should actually be sending us flowers thanking us.”
What we’re thinking about: Rhode Island-based MCM just sold a portfolio of four nonunion Manhattan hotels for $489.8 million to a group of institutional investors, the largest Big Apple hotel sale since the Safe Hotels Act went into effect in May. Before the bill passed, critics warned that its staffing mandates could cripple many of the city’s hotels, driving up overhead and eroding their value. In the end, was it all much ado about nothing? Send a note to elizabeth.cryan@therealdeal.com with your thoughts.
A thing we’ve learned: JPMorgan is requiring employees to provide an iris or fingerprint scan to access its new, $3 billion Manhattan headquarters, the Financial Times reported. The bank is also requiring employees to use a mobile app to access the building’s services, giving the bank an unprecedented amount of personal data on each of the 10,000 employees expected to be working at the building by the end of the year.
Elsewhere…
– New York City has halted its plan to add dedicated bus lanes along 34th Street after the Trump administration threatened to withhold federal funding and approvals for other transit projects, according to The New York Times. The Federal Highway Administration said the pause was prompted by concerns about the project’s impact on trucks and emergency vehicles. The lanes are expected to speed up service for 28,000 daily riders by up to 15 percent.
– Former financier Howard Rubin’s estranged wife, Mary Henry, urged a judge to release the accused sex trafficker on a $50 million bond, describing him as a devoted grandfather, the New York Post reported. In a court letter, she said Rubin, 70, should be free to spend time with his three young grandchildren while awaiting trial.
Closing time
Residential: The top residential deal recorded Friday was $15.9 million for a 3,251-square-foot condominium at The Greenwich Lane, 155 West 11th Street in the West Village. Noble Black, formerly with Douglass Elliman, had the listing.
Commercial: The top commercial deal recorded was $231.2 million for The New York Edition hotel at 5 Madison Avenue in Flatiron. The property has 252,109 square feet and 51 stories. The Real Deal wrote about this and another recent hotel transaction.
New to the Market: The highest price for a residential property hitting the market was $18 million for a 4,156-square-foot condo unit at 445 Lafayette Street in Noho. Zack Sosne and Craig Roth with NextStop NY have the listing.
Breaking Ground: The largest new building permit filed was for a proposed 24,785-square-foot, seven-story mixed-use project at 172-10 Jamaica Avenue. Mosharraf Hossain filed the permit on behalf of developer Gouranga Kundu.
— Matthew Elo
