Blue Bay in negotiations to stay on Johnson Ave.

The owners of Blue Bay Restaurant and their landlord, Friedland Properties, are negotiating a new 10-year lease, The Press has learned.   

“It looks good ... we feel very confident that it will go ahead,” Robert Rubinstein, an attorney representing Blue Bay, said. 

Residents have worried that one of the oldest and most beloved eateries in the neighborhood was on its way out. But Mr. Rubinstein said the new lease has been prepared and just needs to be signed by the two parties, which he hoped would happen by the end of the week. 

“The community was tremendously behind us ... They said, ‘Look you’ve been there 35 years, we need you, this is our place,’” Blue Bay co-owner Chris Katechis said, noting that  employees who have worked there for decades feel similarly.

According to Mr. Katechis, he and the other owners had asked landlord Friedland Properties — which owns more than 30 storefronts in the Johnson Avenue area — for a reduction in rent because they could no longer afford the 5 percent hike that went into effect in July. Mr. Katechis said he and one of the Friedlands made a verbal agreement in November, with the understanding that Blue Bay would pay a reduced rate from December to February and pick up the increase again in March. 

After Mr. Katechis said he paid the rent they agreed upon for December, he was served with papers that said he had to pay the full rent written in the lease or vacate the store. When Mr. Katechis signed a stipulation to vacate by March 31, community members spoke out against the closure. Residents demanded to know what could be done about the beloved diner closing. 

Blue Bay began negotiating with another Riverdale Avenue landlord to take over the space on Riverdale Avenue once occupied by D.J. Drugs, a contingency that will no longer be necessary if the deal with Friedland goes through.

Mr. Rubinstein said the new lease  includes a locked-in yearly rent increase. He also said it has a tax escalation clause, which resets the base tax year to this year — a change that amounts to an “appreciable difference” from the previous lease — which the owners were unable to afford, Mr. Rubinstein said. 

Friedland Properties has earned a reputation for being a tough negotiator with tenants and has been blamed for multiple shuttered storefronts on Johnson Avenue between West 235th and West 236th streets. 

Many feared that Blue Bay would be added to the list of empty storefronts but that seems increasingly unlikely.