The signature salad bar and famed fondue aren't going anywhere.
Despite worries this summer that higher rents would force them to relocate, the owners of Grendel's Den Restaurant have reached an agreement with their landlords that will allow the eatery to remain at 89 Winthrop Street.
Sue E. Kuelzer, who owns the restaurant with her ex-husband Herb, said Grendel's and Intercontinental Companies, which owns the building, are "close to signing" a 20-year lease.
"Hopefully I'll be [retired] in the Riviera by the time it runs out," Kuelzer said.
Peter Palandjian '87, chair and CEO of Intercontinental, said he "felt it was important to keep this institution in Harvard Square."
"On a personal level, we have developed a relationship with Herb and Sue and in the end that meant more than pure economics," Palandjian said.
Nevertheless, the agreement did not come easily. Several buildings in Winthrop Square are being redeveloped as retail and luxury condominium space, and for several months this year it was unclear if there would be room in the upscale new complex for Grendel's.
Earlier this year, Intercontinental told Grendel's owners that the restaurant's lease might not be renewed. Officials of the development firm say they issued the warning because they wanted to begin construction and allow themselves flexibility in finding tenants for the new complex.
"We didn't want to make a deal too early that would allow the tail to wag the dog for the entire project," said Palandjian.
In April, the Kuelzers became so concerned that they bought a nearby building for a possible new location: 98 Winthrop Street, which had housed the Harvard Alumni Association's Class Report Office.
Intercontinental sought other businesses to occupy the entire 30,000 square-foot space, but ultimately yielded to community concerns.
Palandjian said a highly credit-worthy superstore-- "someone like Virgin Records," he said--would not complement the Square so well as a smaller, family-run business such as Grendel's.
And the Kuelzers, Palandjian said, have shown they "can faithfully and reliably pay their rent for over 25 years."
If Intercontinental's project remains on schedule, Grendel's will close for three months in late winter. The developers plan to make the restaurant's entrance handicap-accessible and will rebuild the Grendel's porch, Kuelzer said.
Intercontinental--owner of the five properties in Winthrop Square--has already begun the demolition phase of their $20 million development project.
The Holy Cross Armenian Catholic Church was razed late last month, and its congregation relocated to Belmont six weeks ago. The church's blockage of Grendel's liquor license spurred a lawsuit, Larkin v. Grendel's Den, that went up to the Supreme Court. The Court agreed with Laurence H. Tribe '62, Ralph S. Tyler Jr. Professor of Constitutional Law, that giving the church veto power was an unconstitutional delegation of legislative power to a religious institution.
Intercontinental plans to construct a seven-story building behind Grendel's, housing a 10,000 square foot parking area, three floors of retail space and a dozen luxury condominium units.
"We have not determined the tenants for the new space," Palandjian said.
Now that Grendel's has reached an agreement with Intercontinental, the Kuelzers said they plan to use the 98 Winthrop Street property--for which they took out a $360,000 mortgage--as a satellite office and storage space.
"Our kids can stay there when they visit," Kuelzer said. "Maybe we'll develop it later, but we're not sure