Red Onion operator’s lease terminated

by Catherine Lutz, Aspen Daily News Staff Writer

The operator of the Red Onion’s lease was terminated this week, reducing the likelihood of the historic restaurant and bar’s reopening anytime soon.

Restaurateur Scott DeGraff and his Junk/Red Onion LLC announced yesterday that “the owners of the Red Onion Building agreed to terminate the tenant lease for the Red Onion. Junk/Red Onion LLC will no longer be the operator of the Red Onion.”

Neither DeGraff nor the Red Onion building’s owners, Aspen attorneys Ron Garfield and Andy Hecht, returned calls for comment.

Rumors have been circulating for some time that change was in the air for the Red Onion, as work has seemingly stopped on an extensive interior renovation project and DeGraff is facing massive liens and a lawsuit filed by contractors and subcontractors for unpaid debt.

The historic restaurant and bar, which since the mining days had operated continuously for 115 years, closed its doors in spring 2007 and hasn’t been open since. A thorough renovation of its historic interior began that fall, and DeGraff, a restaurant and club promoter with interests in Chicago, Dallas and Las Vegas, was eventually tapped as the new operator.

DeGraff also owns Junk/Liquid Sky in the new Base Village in Snowmass and Fun Worldwide, which is currently hosting a part-time steakhouse in the former Cooking School of Aspen space on the Hyman Avenue Mall. Neither are open full time this summer.

People who have been watching the Red Onion drama the last couple years — and the economy lately — were not terribly surprised that the lease was broken.

“I expected this would happen because [DeGraff] has liens all over his properties; he hasn’t paid his bills,” said local commercial broker Ruth Krueger.

 Dustin Franz/Aspen Daily News
Restaurateur Scott DeGraff and his Junk/Red Onion LLC announced yesterday that building owners Ron Garfield and Andy Hecht agreed to terminate the tenant lease.

Krueger did not work on the lease transaction with DeGraff, but she said she’s had clients who were interested in the Red Onion space. The last time she brought up the subject, about a month ago, with Andy Hecht, the building co-owner wasn’t interested in talking.

“He was committed to a lease and wasn’t entertaining any other options,” said Krueger. “The landlord was committed to that tenant.”

Another local commercial broker, Bill Small, said that he too had “been kind of aware there has been some issues” when it was evident that construction had halted.

“It’s another casualty of the economy,” said Small.

The restaurant did not yet have a letter of completion but most of the historic work had been completed, said city officials. The historic bar and tile work were done and in place, said historic preservation officer Sara Adams, but she hadn’t heard from the architects or contractors in a couple of months.

Adams said she’d heard “through the grapevine” about potential changes but had received no official notice of the lease termination.

The city has also been waiting for final elements like the electrical systems and lighting for months, said Denis Murray with Aspen’s building department, who said he couldn’t remember the last time he’d heard from anyone on the project.

“I have a vague memory of an inspection, but it might have been in the winter,” he said.

As for what could happen next, if a new operator was signed up who will use the same plans, the city process could be completed without much delay.

But even “if they started tomorrow it would take a month or two to finish up” the tenant space, said Krueger, which makes a summer opening quite unlikely.

Krueger said she is confident another operator will be found, although she wonders whether it will be anytime soon.

Small has similar thoughts.

“I think there will be a lot of interest, but my assumption is there’s a lot of money that needs to be spent there, so I don’t know how long that interest will last,” he said.