A restaurateur signs a fifteen-year lease and then suffers a debilitating stroke. What happens next plays out in two very different versions depending on who is telling the story.
When Keith McNally suffered a massive 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 stuck in a business deal he could no longer execute. He had rented a space in the Meatpacking District to reopen his iconic Pastis restaurant, backed by a $1 million personal guarantee.
In his memoir “I Regret Almost Everything,” McNally describes the episode as an almost tragic turn of events. Unable to walk or speak clearly, McNally put his daughter Sophie in charge of the company. He says she begged the landlords, Bobby Cayre and Jared Epstein of Aurora Capital, to release him from the lease. They declined, he wrote, at the insistence of a mysterious “third partner,” later identified as Neil Bender of William Gottlieb Real Estate. Facing financial strain and depression, McNally describes feeling cornered.
“I couldn’t possibly afford to lose a million dollars, yet I couldn’t build a restaurant,” he wrote.
Epstein tells a very different story. In his version, there was no threat to enforce the warranty, no heartless landlord tightening the screws on a distressed tenant.
“We would never go after his personal guarantee,” Epstein said in a telephone interview. “Remember, it’s not a good thing to do as a businessman. I believe it’s a terrible thing to do as a human being: to prey on someone after they’ve had a terrible medical problem in their life.”
According to Epstein, Sophie reached out shortly after her father’s health crisis to say she would continue the project. But when their investor pulled out, she needed time to find new financing. Instead of pushing back, Epstein said, Aurora worked with the McNallys to find potential partners. One of those introductions, to restorer Stephen Starr, ultimately revived the project. Starr teamed up with McNally to reopen Pastis in 2019, to immediate acclaim and two stars from The New York Times.
Following the restaurant’s success, McNally and Starr opened locations in Miami and Washington, DC
Epstein said he was particularly 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’ attack on Israel on Oct. 7, he said.
For Epstein, the book’s depiction of events feels like misplaced resentment.
“We saved his old brand,” Epstein said. “Instead of revenge, he should actually send us flowers to thank us.”
What we think aboutRhode Island-based MCM just sold a portfolio of four non-union hotels in Manhattan for $489.8 million to a group of institutional investors, the largest sale of Big Apple hotels since the Safe Hotels Act went into effect in May. Before the bill passed, critics warned that the staffing mandates could cripple many of the city’s hotels, go over their heads and erode their value. Was it all much ado about nothing in the end? Drop us a line at elizabeth.cryan@therealdeal.com with your thoughts.
Something we learned: JPMorgan is requiring its employees to provide an iris or fingerprint scan to gain access to its new $3 billion headquarters in Manhattan, the The Financial Times reports this. 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 work in the building by the end of the year.
Elsewhere…
– New York City has halted its plan to build 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 by as much as 15 percent for 28,000 daily passengers.
– Former financier Howard Rubin’s estranged wife, Mary Henry, urged a judge to release the accused sex trafficker on $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 highest residential deal recorded on 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 of Douglass Elliman, does the entry.
Commercial: The best recorded commercial deal was $231.2 million in front of 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 on the market: The highest price for a home that came on the market was $18 million for a 4,156-square-foot apartment at 445 Lafayette Street in Noho. Zack Sosne and Craig Roth of NextStop NY have the mention.
Groundbreaking: The largest new building permit submitted was for a proposed 24,785-square-foot, seven-story mixed-use project at 172-10 Jamaica Avenue. Mosharraf Hossain submitted the permit on behalf of developer Gouranga Kundu.
— Matthew Elo
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