A LINE IN A 2020 LEASE MADE SARABETH’S LANDLORD A PARTNER IN EVERY PANCAKE

On July 27, 2026, the owner of 423 Amsterdam Avenue filed a complaint in Manhattan Supreme Court against BSWR Inc., the corporation that runs the Sarabeth’s at the corner of West 80th Street. The filing asks for a judgment of ejectment, an order directing the sheriff to remove the tenant, and at least $17,810.72 a month for every month the restaurant stays. The complaint calls that figure the last amount of rent, additional rent and percentage rent due under the lease. The whole case turns on the percentage.

Sarabeth Levine started with a jam kitchen in 1981 and a first restaurant in 1983. The Amsterdam Avenue room came later: the complaint attaches a standard store lease dated March 1, 1998, modified in 2004, in 2014, and on May 10, 2020, two months into the first lockdown. The 2020 modification is the one that matters. It set rent at the greater of $10,000 a month or 8 percent of monthly gross sales, with an additional 1 percent of sales until a rent abatement granted that spring was paid back. The landlord is 423 Amco, a general partnership; Crain’s named the building’s owner as Lawrence Arnsten. RBM Restaurant Group, which also runs Docks Oyster Bar, now manages the Sarabeth’s restaurants in the city.

The arithmetic of that lease is simple. The breakpoint, the sales level where percentage rent overtakes the base, is $125,000 a month. Above it, every dollar at the register sends eight cents to the building, and nine until the abatement is repaid.

Percentage rent is common in retail and restaurant leases. A commercial real estate consulting firm’s explainer describes it plainly: the tenant pays the landlord a share of the sales generated at the space. The landlord shares in a good year. It does not share in the payroll, the purveyor, the gas bill or the Saturday when the line goes around the corner and the kitchen runs out of hollandaise. It is a silent partner with the right to see the books, and the lease usually requires monthly sales statements so it can check its cut.

The Sarabeth’s summer breakfast menu lists the lemon ricotta and buttermilk pancakes at $24, the classic ham benedict at $25, the smoked salmon benedict at $26. By our arithmetic on the lease terms, the 8 percent alone on the pancakes is $1.92, before the eggs, the staff or the utilities see a cent. The landlord’s monthly figure does not say what Sarabeth’s actually sold, and the complaint does not show the math behind it.

The complaint says Sarabeth’s failed to report its gross sales within 30 days of the end of each month, despite the landlord’s repeated demands. It says a default notice went out June 11 with a cure deadline of June 22, a cancellation notice July 1, and a lease termination effective July 13. It claims $43,432.16 in arrears: $7,810.72 for May and $17,810.72 for each of June and July. It asks for ejectment, use and occupancy of no less than $17,810.72 a month, an injunction forcing Sarabeth’s to turn over its sales figures, damages through February 28, 2030, the lease’s stated end, and attorneys’ fees of at least $50,000. These are allegations. None has been tested, and Sarabeth’s had not answered publicly as of this writing.

On August 5 the landlord moved for interim relief, and Justice Lyle E. Frank signed a temporary order: $17,810.72 a month in use and occupancy from August, no destruction of sales records, and gross sales figures back to March. A hearing was set for September 8. The outcome of that hearing was not in any public report we could find before publishing.

On August 16, after Sunday brunch, the Sarabeth’s on Park Avenue South and the one on West Houston Street served their last meals. The company’s statement said the economics of running the two locations were no longer sustainable; a representative told reporters the group could not reach an arrangement with a new landlord at one of them and does not disclose lease terms. That leaves Central Park South and Amsterdam Avenue.

The trajectory is not new. The Tribeca Sarabeth’s closed on July 1, 2024 after 13 years, in the owners’ words, due to the loss of its lease. The West Houston room that closed in August had opened only in November 2024, the group’s first new city location in 13 years, and lasted 21 months. Two weeks later, five blocks north on Columbus Avenue, Good Enough to Eat served its last brunch after 45 years, when its owner and landlord could not agree on what the space was worth. The Upper West Side is losing its breakfast rooms one lease at a time, and the one still standing is the one in court.

The Amsterdam Avenue room is open seven days, taking reservations through SevenRooms and booking Thanksgiving dinner for November 26. Whatever the sales reports show when a judge reads them, the structure is the thing to understand. A percentage lease ties a landlord’s income to a restaurant’s register and gives the landlord the right to see it. When the room is full, both sides win. When the reports don’t come, for whatever reason, the lease hands the landlord a tool the tenant does not have: the sheriff. A room that has fed a corner for 28 years can be put out by a line item, and the line item was written in the spring of 2020, when nobody on either side of the table knew what the next month’s sales would be.