Chef Karen Martini has labelled her treatment by state government-run ACMI (formerly the Australian Centre for the Moving Image) at Federation Square “disgraceful”, saying she was given five hours to close and vacate her Hero restaurant on Monday afternoon.

“I had no time to tell my suppliers, my customers, my staff. Many of our staff found out we were closing on social media,” Martini told Good Food.

ACMI sent a note to her company at 3pm on Monday advising that Hero would close before releasing a media release an hour later.

ACMI director and CEO Seb Chan said on Wednesday that ACMI ended the agreement with HospitalityM, the operator of Hero and its associated events management business, because it was in breach of its contract.

“This followed ongoing attempts to negotiate with HospitalityM over the past few months. Since Hero opened in November 2020, ACMI has provided ongoing support for HospitalityM − including payment concessions and multiple contract renegotiations − to help Hero in the face of ongoing challenges to the hospitality sector across the city.

“Unfortunately, HospitalityM has been unable to meet its legal and financial obligations under the agreement and has accrued significant unpaid debt. It would be inappropriate for ACMI to disclose the amounts owing by a commercial operator,” Chan said.

After being issued with a letter at 3pm on Monday, Martini was told to be closed and out of the premises by 8pm that night.

“How is it that a civic institution could treat a private operator so uncivilly?”

HospitalityM mentor Michael Sapountsis said ACMI was “not compelled to that action and had the opportunity to seek further mediation and discussion”.

“Questionable legality aside, the extreme conduct was ultimately self-serving from a scheduling perspective and exposed suppliers and staff to more financial peril than other pathways,” Sapountsis said.

“I had no time to tell my suppliers, my customers, my staff. Many of our staff found out we were closing on social media.”

Karen Martini

Martini said her company had been in negotiations with ACMI, the national screen culture museum, for the past two years over the commercial terms of Hero’s lease.

“We had been having ongoing discussions with ACMI trying to renegotiate our lease due to what was happening in the museum, and they chose to escalate this on Monday,” she said.

Foot traffic was down and there were fewer visitors to ACMI than they had been told to expect, and they were looking to have this reflected in the commercial terms of the lease, Martini said.

Martini said that due to COVID and “changing patterns of traffic to the CBD, to Federation Square and to ACMI”, visitation to the site was not what was stated to be in the original tender.

She said she had wanted to loosen contractual requirements for her to operate a kiosk for ACMI during hours she argued were not commercially viable.

“We needed more operating flexibility than we had in the contract,” Martini said.

Martini said HospitalityM was seeking legal advice and that ACMI “had heard from our legal representative as of Monday at 6pm”. Hero’s lease had another seven years to run, according to Martini.

When it opened, the 150-seat all-day restaurant and events space was part of a $40 million revamp of ACMI. Its opening was delayed almost a year by the pandemic.

Martini has been cooking professionally for more than 20 years, making her name as chef at the Melbourne Wine Room and Mr Wolf in St Kilda, and at landmark Sydney restaurant Icebergs Dining Room.

In its first review in March 2021, then chief restaurant critic Gemima Cody praised the restaurant’s food and awarded it a Good Food Guide hat.

“I am bitterly disappointed. But it will not crush me, we will be like the Phoenix rising,” Martini said.

“We will find another space in the city and continue to do what we do, cook food rather well and work with beautiful produce.”

An ACMI spokesperson said: “A new food and drink offer for ACMI will be announced soon.“

An earlier version of this story said ACMI sent out a media release about ACMI’s closure at 3pm. It’s been updated to say it was sent at 4pm.