Future of much-loved Hopetoun Tea Rooms in doubt after $1.5 million legal battle
For 127 years the Block Arcade has been home to Melbourne’s iconic Hopetoun Tea Rooms, however its stay in the CBD location could come to an end after a bitter dispute.
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The owners of Melbourne’s much-loved Hopetoun Tea Rooms are threatening to vacate the the Block Arcade after losing a $1.5 million legal battle with the arcade landlords over a failed expansion.
The future of the tea rooms, which has occupied the CBD arcade since 1892, remains uncertain after proprietors Kelly and Kon Koutoumanos said, in a statement, that they were “considering all options” including moving the 127-year dining landmark to another location.
“The Hopetoun Tea Rooms will therefore live on to make tea and scones but not likely at the Block Arcade,’’ the statement said.
But Block managing director Grant Cohen said the Koutoumanos family had signed a new five-year lease on the shop, starting from July 1, so he expected them to remain.
“They exercised their option for another five years back in April,’’ he said.
The lease extension was later confirmed by the Hopetoun legal team.
The legal row was over the tea rooms’ owners plan to set up a new 200-seat eatery - to be called The Wintergarden - in the arcade’s basement, while keeping the original shop.
The relationship between landlord and tenant soured amid claims of an unauthorised concrete pour and of unconscionable conduct involving a loan agreement.
The Koutoumanoses alleged the basement works in June 2016, making it unusable for trading.
VCAT Member Rohan Walker ruled that the Koutoumanos family should pay $222,612 for unpaid rent and lease breaches, $261,336 for damages and repairs of the basement and a shop, and $992,905 for the loan agreement.
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But the ruling also said that shares in the tea rooms, used as security, should be returned to the Koutoumanos family.
Mr Cohen whose family — founders of the Godfreys vacuum cleaning empire — have renovated the Collins St shopping attraction since buying it for about $80 million in 2014, yesterday said he was pleased with the outcome and expected the tea rooms to stay in its current location in the arcade.
The Koutoumanoses said they were already looking for a new site for the business.