Red Lobster is fighting to stay open in Times Square, but the bankrupt seafood chain has just weeks to finalize a deal because its landlord is trying to double the rent, according to information obtained by The Washington Post.
The restaurant’s lease at Crossroads of the World expires June 30, and the company is negotiating new terms with landlords SL Green Corp. and RXR Corp., even though it lists the location among 200 stores it plans to close, according to bankruptcy filings.
As The Post previously reported, the owner of 5 Times Square, where Red Lobster has operated for 22 years, is asking $2.2 million in annual rent for the three-story, 16,482-square-foot space.
Red Lobster is currently paying just under $1 million a year for the location on the corner of West 41st Street and Broadway, an anonymous real estate broker told The Washington Post.
The seafood chain has closed numerous restaurants across the country since the week before its May 19 bankruptcy filing.
But employees at the Times Square store were told their store was not included in the closure, several employees told The Post.
“This store is doing well and we have no intention of closing,” the manager said at lunchtime on Thursday, when only a few customers were scattered throughout the three-storey store.
The Orlando, Florida-based company did not respond to a request for comment about the Times Square spot.
The fact that Red Lobster included its Times Square location on a list of leases it would reject “may be a way to put pressure on the landlord,” bankruptcy lawyer Patrick Collins of Farrell Fritz told the Post.
“This is the company’s way of letting landlords know it is prepared to close the store unless something changes,” Collins added.
However, anecdotal evidence suggests business hasn’t always been strong: Earlier this month, The Post reported that two visits to the Times Square store during lunchtime in early May found it nearly empty.
Part of Red Lobster’s predicament is that it ran a promotion last year offering all-you-can-eat shrimp for $20, which ended up being more popular than the company expected: It raised the price to $25, but consumer interest in the promotion has not waned.
The company’s largest shareholder, seafood distributor Thai Union, said the promotion caused a fourth-quarter loss of $530 million.
Jonathan Tibbs, Red Lobster’s CEO and the company’s fifth CEO since 2021, has blamed Thai Union for the company’s recent problems, saying in a court filing that Red Lobster is investigating Thai Union’s role in pushing shrimp promotions as a way to attract more customers.
The Times Square location will be the last remaining location in Manhattan, according to the company’s website. Earlier this month, the company closed an eatery on West 125th Street in Harlem.
