Sydney bar Shady Pines Saloon will close on Wednesday, April 23 after the venue owner reached an agreement with the landlord following an earlier dispute. The closure is another twist in what has been a turbulent year for its owner, troubled hospitality group Swillhouse.

For the past few months, Swillhouse and Trenerry Property Group (acting on behalf of the landlord) have been wrangling over the lease for the subterranean country-and-western-inspired bar, which opened in 2010. The Darlinghurst building is being redeveloped by a consortium that includes the Victor Smorgon Group, Kanat Group and developer Trenerry Property Group, which will be leased to an operator that’ll run the first Australian site of international private members’ club Soho House.

The first Soho House opened in London in 1995, with a focus on membership by people from the media, arts and fashion industries, and there are more than 40 “houses” around the world, from Greece to New York City.

Last October, The Daily Telegraph reported that Shady Pines Saloon took Trenerry to the NSW Supreme Court in efforts to halt their eviction. At the time, Trenerry accused Shady Pines of breaching its lease conditions and liquor licensing obligations, which Shady Pines disputed.

The legal action arose following allegations of sexual misconduct at parent company Swillhouse, which were published last year by The Sydney Morning Herald and Good Food. The investigation revealed claims Swillhouse pushed staff out of the company after reporting sexual assaults, encouraged staff to have sex with customers, and discriminated against women as it built up a hospitality empire. It also sparked an investigation by SafeWork NSW.

In February this year, Swillhouse denied to Good Food that Shady Pines was set to close. Swillhouse chief executive, Lisa Hobbs (who was appointed following the investigation by this masthead), said this week the agreement between the two parties to depart had not been finalised at that time. Over the weekend, Shady Pines took to Instagram to say it was closing.

Hobbs also said this week she could not comment specifically on the Soho House project, but supplied a joint statement from Swillhouse and Trenerry to say the two parties had “reached a mutual agreement to bring to an end the lease for Shady Pines as the building will shortly undergo redevelopment”.

Shady Pines was Swillhouse’s first venue, and it was at the forefront of Sydney’s small bar revolution that was sparked by major changes to NSW’s liquor licensing laws. It quickly became one of Sydney’s most popular cocktail bars and a flagship Swillhouse venue. The group also operates six Sydney venues, including Le Foote in The Rocks, Restaurant Hubert, the Baxter Inn and Caterpillar Club in the CBD.

Plans for Soho House’s Darlinghurst branch met with early hurdles, with some residents lodging concerns with the City of Sydney that venue staff would “disturb the peace” by talking too loudly on breaks, and locals and guests would knock over bins. The City of Sydney Local Planning Panel voted last year to approve the Soho House proposal.

The vacant Shady Pines bar space, which has an entrance on Foley Street, is expected to be included in the Soho House development. A Trenerry spokesperson wouldn’t elaborate on specific details of the project, but said: “The venue in question [Shady Pines] had operated from the heritage building that sits on the development site and, as was always the case within the planning permit, will be reimagined as part of the new plans.”

Another forthcoming development, Toga Group’s Oxford & Foley project, which promises to eventually inject new food operators and commercial tenants in to the area, will take over the site next door but is separate to the Soho House build.

An early review in Good Food described Shady Pines as one of the coolest small bars in town: “A country-and-western-style tavern that plays a lot of Johnny Cash and serves everything with liberal lashings of southern charm.”

Shady Pines will pour its last drinks in a fortnight, but the closure isn’t necessarily the end for the venue. Hobbs hinted at a potential rebirth in Sydney but “not necessarily in Darlinghurst”.