Nello, Beloved by Rich New Yorkers, Is Dinged Over Illicit Indoor Dining

Nello, an Italian restaurant and celebrity hot spot on the Upper East Side of Manhattan, has long been a showroom for wealthy New Yorkers undeterred by its lofty prices.

When the coronavirus pandemic forced the venue to shut its dining room, its flamboyant spirit was on full display.

To promote public health, the restaurant placed large, ruby-hued teddy bears wearing face masks at its sidewalk tables. When outdoor dining resumed, the plush animals remained, huddled around a bottle of hand sanitizer and signs encouraging patrons to stay six feet apart.

But this week, state officials said that Nello violated the same state guidance it had urged customers to follow, when it served at least eight people indoors despite a citywide ban on doing so.

As a result, the State Liquor Authority suspended Nello’s liquor license, adding the high-profile restaurant to a list of dozens of establishments that have been penalized as the state agency mounts a crackdown on social-distancing violations.

Nello’s management did not immediately respond to a request for comment.

For weeks, Gov. Andrew M. Cuomo has denounced crowds gathering outside New York City restaurants and bars, in what he has deemed flagrant violations of the state’s social-distancing guidelines.

“What they’re doing is stupid and reckless for themselves and for other people,” Mr. Cuomo said last week. “And it has to stop.”

In June, as warmer weather brought more New Yorkers outdoors, Mr. Cuomo shifted the burden on bar and restaurant owners to control the crowds outside their buildings.

He also gave the State Liquor Authority the power to suspend the liquor licenses of businesses that were not doing enough to comply with rules.

As cases of the virus began surging in the rest of the country, Mr. Cuomo sounded the alarm more frequently. Two weeks ago, the state told bars and restaurants that they could not serve alcohol to people who did not buy food.

Last week, the state created a task force, led by the liquor authority and the State Police, that promised to send investigators to respond to reports of social-distancing violations.

Mr. Cuomo has cast the crackdown as an effort to reduce outdoor crowds and prevent a potential second spike in cases. But bar and restaurant owners have said the mounting regulations are confusing and unnecessarily burdensome.

Andrew Rigie, the executive director of the New York City Hospitality Alliance, an industry group, said businesses that were already suffering because of the pandemic had been struggling to adapt to shifting guidelines.

“They’re losing their livelihoods, they’ve laid off employees and they’re trying to survive,” Mr. Rigie said. “And now they’re trying to operate in an extremely difficult situation where the guidance continues to change.”

Even so, most of the city’s restaurants and bars are complying with the guidance, Mr. Rigie said. He called those violating the rules “a few bad operators.”

Since the state’s shutdown and social-distancing orders went into effect in March, 64 businesses have had their liquor licenses suspended for violations, officials said. The vast majority of those suspensions — 41 — have come in the last two weeks.

The crackdown has overwhelmingly targeted establishments in New York City. Of the 41 businesses, all but three are in the city’s five boroughs, and 27 of them — about two-thirds — are in Queens.

Across the state, 549 businesses have been charged with violating the state orders since March, and 408 of them are in New York City.

The majority of the businesses that have been penalized have been accused by the liquor authority of violations related to outdoor dining and drinking.

Mr. Rigie said that restaurant and bar owners felt particularly frustrated by the state guidance making them responsible for controlling the spaces outside their premises.

“When you see police having trouble dispersing large crowds of people, how do we expect restaurant workers to do it?” Mr. Rigie said. “And why would we expect them to be able to?”

Against a backdrop of bars and restaurants accused of improper outdoor drinking, Nello, which was accused of serving patrons inside, would seem to stand apart.

In the decades since the restaurant opened uptown in 1992, it has become a favorite of boldfaced names and well-heeled New Yorkers drawn to its elegant atmosphere.

Nello’s immoderate prices — specials can cost hundreds of dollars, and many online reviews have complained of sticker shock — have made it a bastion for the city’s upper crust. It has been the background of many paparazzi photos and has made frequent appearances on Page Six, The New York Post’s gossip column.

Time has not softened the restaurant’s appeal. Donald Trump Jr., the president’s eldest child, spent Valentine’s Day at Nello last year, and the cast of “The Real Housewives of New York” filmed a scene at the eatery that was broadcast in May.

Yet Nello’s glitzy trappings and hefty price tag have not, apparently, matched the caliber of Nello’s food. In a New York Times review of the restaurant in 2010, Sam Sifton offered the rather plain assessment that “the food is not very good,” describing dishes as tasting like “shirt cardboard” and “sliced shoe.”

Mr. Sifton gave the restaurant zero stars, but did note its clublike atmosphere. “The restaurant’s customer base is built of the richest and most coddled people in the city, who love it for its elegance and, perhaps, simplicity,” he wrote.

On Friday, Bill Crowley, a spokesman for the State Liquor Authority, said inspectors found patrons sitting inside Nello, a violation of regulations in place since March that forbid indoor dining.

A waiter at the restaurant, who spoke on the condition of anonymity because he was not authorized to talk to the news media, said that inspectors took issue with two tables set up at the edge of the restaurant where its doors open onto the street.

The waiter, who said he was there when inspectors arrived, said Nello had been told twice this month that the tables were consistent with state guidelines.

Mr. Crowley disputed that account, saying that the eight customers were clearly seated indoors.