Financially Ailing Flatiron Cafe Closes Suddenly

By Heather Holland on April 4, 2014 9:01am 

FLATIRON — A cafe plagued by financial issues and Health Department violations shut down abruptly last month — leaving some customers fuming over gift cards they purchased.

Cafe CNN, at 315 Park Ave. S. near 24th Street — which offered a hot bar, sandwiches, salads and sushi — shuttered in mid-March, after being hit with a lawsuit for nearly $350,000 in back rent and then filing for bankruptcy last summer, according to records.

The unexpected closure left some regular customers in a lurch, including Kyle Baumgartner, who said he spent $160 on a gift card at the cafe only a month before it shut down.

“I went out of town and when I came back, it was all boarded up,” said Baumgartner, who works across the street and used to get coffee there every day. “I’m not trying to recoup my money necessarily, but I can’t sit around and let this guy get away with it scot-free.”

Baumgartner said the store began advertising discounted gift cards — which offered deals for customers who planned to return regularly — just a few months before closing.

“The signs [advertising the gift cards] were posted all over the store,” said Baumgartner. “It’s so crooked.”

The cafe’s owner, Lee Heeyang Pak, and his lawyer did not immediately respond to requests for comment.

Gift card customers who want to get their money back can file a complaint in bankruptcy court or with the state attorney general, according to a spokesman for the New York State Division of Consumer Protection.

Cafe CNN's troubles began when its former landlord, 315 Park Ave. S. LLC, sued in New York Supreme Court last May for months of back rent totaling $345,271.51, according to court records.

The lawsuit was settled last August, just after the cafe filed for bankruptcy in July.

“They were in debt and had extreme overhead with a large staff and large perishable inventory,” said Craig Nassi of BCN Development, who represents 315 Park Ave. S. LLC. “They spent several million dollars on their tenant improvements [that] they paid cash out-of-pocket for.”

The building has since been sold to 315 Holdings LLC, but Nassi said he would continue to try to get the money the former landlord is owed.

“The owner [of Cafe CNN] has been out of contact," Nassi said. "We have recently sold the building but we will not forgive the owed amounts and will continue to pursue them."

Amid the financial struggles, the cafe was also forced to shut down last summer for health code violations, including live roaches, evidence of rats and contaminated food, according to Health Department records.

The cafe was hit with 61 violation points in June 2013 and was ordered to shut down, and then was forced to remain closed for a couple days longer after failing the reinspection, records show.

Some regular customers said they had almost expected the cafe's final closure.

“It’s not really surprising because the quality of the food wasn’t too good,” said 34-year-old Rex Roman, who works at the Credit Suisse office across the street from the cafe. “I stopped going there, except for maybe breakfast.”

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