The landlord came to Brasserie Perrier on New Year's Eve bearing a bottle of Champagne - and the sudden end of an era.

The celebrated Brasserie, an 11-year fixture on Walnut Street and Georges Perrier's second restaurant, would close for good that night with little warning. The staff would not get official word until after more than 285 customers had been served their New Year's feast.

But the deal, long in the works, had been sealed late that afternoon when landlord Dan Dilella of Vesper Group Properties arrived with the paperwork to release Brasserie early from its lease so it could be replaced with a more lucrative retail tenant. The signing took place over a bottle of Veuve Clicquot.

"It was not an easy decision," said Perrier, who opened the bistro in 1997 as a more casual and contemporary sibling to his haute-cuisine jewel, Le Bec-Fin. "But he gave us an offer we could not refuse."

Chris Scarduzio, Perrier's co-owner and chef, said more than half of Brasserie's 60 employees would be asked to relocate to one of the group's other restaurants: Table 31 in the Comcast Center, Georges' in Wayne, Mia in Atlantic City, or Le Bec-Fin.

Rumors had been swirling for much of the week, and managers were forewarned of the imminent closing.

"There were a lot of hugs and a lot of tears . . . because Brasserie had a fabulous run," Scarduzio said. "But we feel good knowing that we went out on a high note with high emotions and a packed house."

Perrier said outstanding gift cards would be honored at Le Bec-Fin, Table 31 and Georges', and that 2009 bookings may be transferred to any of the three with the contracted menus and pricing.

Brasserie's revenues have been off this year from 5 percent to 10 percent, according to Scarduzio and Perrier. But the closure was more related to long-term lease issues than pressure from the financial crisis that is hurting so many local restaurants, they said.

The restaurant has been paying the 1996 rate of $19 a square foot for rent at 1619 Walnut, a fraction of what retail tenants currently bring. When Perrier and Scarduzio declined to renegotiate a higher rate for their lease, which was to expire in October, both parties agreed to an early release.

"This price would be $120 to $140 a square foot," said Larry Steinberg, a Center City retail real estate broker with the Michael Salove Co. That's "at least 10 times the rent they are paying now. That is the going rate of retail on Walnut Street."

"You cannot have a restaurant and pay this kind of money," said Perrier.

Dilella and Vesper president Gary Silvi could not be reached for comment. The firm bought the building in December 2007. It is unknown whether it has a new tenant in place.

Brasserie Perrier's demise is the latest sign that Walnut Street is being transformed from its role as the city's fine-dining Restaurant Row into more of a shopping district.

"As restaurants go out, they are replaced by retailers," said Steinberg. "It will continue to go that way as the leases expire."

Walnut Street restaurants that own their own buildings may be the exception, he said, citing Susanna Foo, Il Portico and Wok. Perrier owns the property housing Le Bec-Fin.

The shift doesn't faze Stephen Starr, who runs two Walnut Street restaurants: Butcher & Singer, a new steak house in the former Striped Bass location, and Alma de Cuba. "That's the law of the jungle," he said. "If you go to New York, you can't have the same kind of restaurants on Madison and Park Avenues that you have downtown."

Starr sees another Restaurant Row evolving on Chestnut Street between Seventh and Eighth Streets - not coincidentally, he already owns two restaurants there, Morimoto and Jones. A new Jose Garces restaurant, Chifa, and a luxury steak house, Union Trust, are slated to open soon on that block.

Brasserie Perrier will be sorely missed by such devoted regulars as Anthony Bosco, a Day & Zimmerman executive who considered it like "a neighborhood bar," albeit a gastronomic one. Scarduzio prepared foie gras for Bosco every time he visited - "well over 300 times," Bosco said - and never repeated the way it was cooked.

"This is kind of a bittersweet thing," he said.

Jim Avato, a regional vice president at Crum & Forster Insurance, said he had eaten there twice a week since it opened. "It didn't matter if you were going in for a burger at the bar or a lobster something in the back room - you always got something incredible," he said. "It had that Cheers kind of atmosphere."

Stalwarts like Avato, who dined at Brasserie on New Year's Eve, were startled at the closing. His family had left at 11:30 p.m., before the announcement was made.

"The next day we heard the news," he said. "It came as a surprise."

Bombshell announcements have become the norm of late from Perrier, who last year decided to go casual at Le Bec-Fin with a relaxed dress code and an a la carte menu. The loss of Brasserie, he said, will allow him to refocus his efforts there in the coming year.

Despite the closing, he said, 2009 began with a good omen: He learned yesterday that he had been awarded the Legion d'Honneur, a Napoleonic decoration that is the highest award the French government can bestow.

"It is," said Perrier, suddenly breaking into tears over the phone, "for everything I've done."

Contact restaurant critic Craig LaBan at 215-854-2682 or
Staff writers Linda Loyd and Michael Klein contributed to this story.