McGrath’s Fish House served its last meal in Bend on Friday, and Bend River Promenade plans to seek a new tenant for the restaurant space.

The closing follows a three-month dispute over late rent payments in which McGrath’s finally agreed to vacate the restaurant, which opened nearly 30 years ago on NE Third Street. McGrath’s, which is based in Salem, has 10 other locations in Oregon, Washington, Idaho and Utah, but Bend is significant because this was its first location outside of Salem.

“It had become our slowest restaurant in our company,” owner John McGrath said. “We used to have all the traffic go by. Now it’s different traffic and not very many tourists because they’re all on the expressway,” he said in reference to the Bend Parkway, which was built in the late 1990s.

McGrath said he faced a lot of competition in Bend. “There’s a lot of restaurants. It’s hard to operate in Bend. It’s hard to find staff.”

The restaurant employed about 40 people, McGrath said.

McGrath said he decided to shutter the restaurant after closing time on Friday to avoid a forced eviction. A judgment granting the landlord control of the premises was signed by Deschutes County Circuit Court Judge Alta Brady on Thursday. The order had been agreed upon by both sides in the case, filed on Nov. 9 after two months of informal talks about rent payment.

“He kept making these offers that were unacceptable,” said Richard Costanzo, a partner in the shopping center, which is owned and managed by RP Realty Partners in Los Angeles. “He’s been behind since September.”

McGrath said he’d hoped to stay open. “I was hoping till the last day, maybe they’d have a change of heart,” McGrath said.

McGrath’s owed $21,689.38 on Oct. 1, according to the complaint that RP Realty’s local entity, RPP Bend I LLC, filed in Deschutes County Circuit Court. McGrath’s made a partial payment of $9,049.96 on Nov. 3, but by that time the landlord had lost confidence in McGrath’s ability to catch up, according to RPP Bend’s pretrial memo.

McGrath’s had argued the shopping center owner was obligated to accept late payment because it had done so in the past, and RPP had failed to provide a detailed accounting in its demand for payment.

The 6,200-square-foot restaurant was built specifically for McGrath’s and opened in January 1987, McGrath said. McGrath’s went on to open locations around the Pacific Northwest and in Arizona but was forced to close some locations as it reorganized under bankruptcy protection in 2010.

The restaurant chain owns some remaining locations and leases others, McGrath said. In Bend, McGrath’s was responsible for property-tax payments and leased the ground from the mall owner. McGrath said there were three years, plus an option for extension, left on the lease.

Costanzo said he hopes to have a new restaurant tenant in place in 2017, but it could take several months because a new tenant would have to make improvements. “It’s a prime location,” he said. “Restaurant spaces are a little more complicated.”

— Reporter: 541-617-7860, kmclaughlin@bendbulletin.com