NYC art gallery sues landlord for $1M and lease termination — for banning indoor cigar smoking

Talk about a smokeout.

A high-end Soho gallery and event space thought its landlord was fine with cigar smoking — until a sudden notice forced the art space to extinguish its operations after a $1 million renovation and millions paid in rent.

FineArt Fund, operating as Gallery 484, is suing its landlord, Lieberman Holdings, in New York Supreme Court. It claims Lieberman knew and accepted its business model — which featured three rooms of gallery and hospitality space, plus a “cigar-related guest experience” — when it signed a 10-year lease in 2023 at 484-490 Broome St. The building also houses an eight-unit co-op.

There’s a battle going on between landlord and tenant at 484-490 Broome St.

But on May 6, Lieberman Holdings abruptly demanded the gallery immediately cease all cigar-related activity following alleged smoke complaints, according to court filings.

Gallery 484 claims the demand came without testing, photos or official violation notices attached. The gallery halted operations and stopped paying rent, claiming the ban rendered the space unusable.

The feud quickly escalated.

Lieberman issued an $81,000 rent demand in May, followed by a civil court nonpayment proceeding in June seeking possession and $162,570 in back rent and fees.

Gallery 484 filed its Supreme Court suit, arguing the landlord breached the lease by taking away the venue’s core business model, ignoring HVAC repair obligations and thwarting the tenant’s ability to obtain a liquor license.

The issue, according to the tenant, is that the landlord knew cigar smoking was an integral part of the business model and was okay with it until one day it wasn’t. exclusive-design – stock.adobe.com

Gallery 484 originally locked in a lease at the building, at the corner of Broome and Wooster streets, with a monthly rent starting at $65,000 — set to scale to roughly $72,000 in the fourth year — and put down a $390,000 security deposit before doing a $1 million buildout.

It isn’t clear if the complaints stemmed from the residents who live above the space. Units inside rarely sell; the most recent deal came in March for a $3.16 million loft with two bedrooms and two bathrooms, according to StreetEasy.

Now, the venue is asking a judge to formally terminate the lease backdated to May 6, force Lieberman to return its $390,000 deposit, and award over $1 million in damages to cover the unamortized cost of its high-end renovations and building repairs.

Attorneys on both sides didn’t respond to a request for comment.