Landmark Chinatown Restaurant, Hwa Yuan Szechuan, Is in Financial Peril

Hwa Yuan Szechuan is drowning in debt, though you wouldn’t guess it by the restaurant’s social media posts, which boast of A-list celebrity guests like Gwyneth Paltrow and Jennifer Lawrence, or the sleekly dressed crowds that gather on the sidewalk outside of its dim, glossy entrance. But its owner and head chef, Chen Lieh Tang, has filed for the business Chapter 11 protection in Southern District of New York bankruptcy court, staving off the threat of imminent foreclosure.

The original Hwa Yuan Szechuan was opened in 1967 by a Taiwanese immigrant named Yu Fa “Shorty Tang,” a figure credited for introducing New Yorkers to cold sesame noodles. But the restaurant closed nine years later, when Tang died of a stroke at 52. Five decades after its founding, Yu Fa Tang’s son Chen Lieh Tang, who ran several noodle shops of his own throughout the city, revived Hwa Yuan at its original address, 42 East Broadway, in 2017. The opening was greeted with great fanfare: “New York noodle fans are freaking out over return of legendary Sichuan restaurant,” read a New York Post headline.

During Hwa Yuan’s hiatus, 42 East Broadway hosted a branch of the Bank of China, which left the building in 2012. The restaurant’s reboot, which stands three stories tall, carries over many luxurious finishes: a pale stone exterior, a translucent marble bar, and china traced with gold. It has become a mainstay on New York dining recommendation lists, earning prestige through the Michelin Bib Gourmand award and New York Magazine’s list of “The Thousand Best.”

But as the pandemic ravaged New York City businesses, and especially those of Chinatown, Hwa Yuan was no exception. “[T]he Covid 19 Pandemic proved catastrophic, closing the Restaurant while it was just getting its legs,” Tang wrote in an affidavit in the bankruptcy filing. The chef reluctantly offered app delivery and takeout — takeout had only made up 5% of the restaurant’s pre-pandemic business. “I don’t want people to eat the food cold,” he told the New York Times. Construction on a plush karaoke lounge, which he planned to take up the building’s second and third floor and kept on a separate lease from the restaurant, ground to a halt. The business was in the red.

“There was and still is a certain cache that we were building upon and hope to continue to build upon, which again, was decimated by Covid,” Tang wrote. He noted that when the city’s restaurants reopened for indoor dining in February 2021, then-Mayor Bill de Blasio had his first indoor meal at Hwa Yuan. But by March 2023, Hwa Yuan owed close to $12 million in rent and late penalties, according to court filings. Tang, who owns the property, had already defaulted on his mortgage in 2020. Eviction proceedings were scheduled for the beginning of this month, though the bankruptcy filing, submitted on Oct. 30, has suspended them for now.

Chapter 11 protection will allow Tang to stave off the impending foreclosure and reorganize his restaurant’s finances while maintaining control of the business and its assets. Tang and his wife will put up two of their Manhattan properties as collateral if their reorganization plan is not accepted by its creditors, according to the affidavit.

Straus News called and emailed the restaurant, but was not able to reach Tang by press time.

A Chinatown Icon
The restaurant began as Hwa Yuan Szechwan Inn on East Broadway, opened by the Taiwanese immigrant Yu Fa “Shorty” Tang in 1967. There, “incendiarily hot Szechuan dishes are beautifully prepared and served,” remarked legendary New York Times food critic, Mimi Sheraton. At a time when Chinese food in the city was synonymous with American spins on Cantonese classics like egg rolls and moo shu pork, Hwa Yuan helped to introduce New Yorkers to the cuisine of a different region of China: Sichuan, whose dishes are famously of the numb and spicy, pepper-laced variety. Tang’s sesame noodles — “cold noodles perfumed with sesame sauce and fired with chili oil,” as Sheraton described in her 1978 two-star review — gained a special popularity, cementing the dish’s spot in the American Chinese takeout canon. The restaurant found a good amount of success: at one point, it had four additional outposts throughout the city.

The first iteration of Hwa Yuan shut down soon after Shorty Tang died in 1976. The Times’s Sam Sifton wrote a tribute to the chef, iconizing him over three decades later: “It is Tang’s recipe, legend has it, that so many of us remember when we order cold sesame noodles today, and why — the recipe being lost to time — we’re so often disappointed when we do.”

In a 2020 New Yorker documentary, Chen Lieh Tang stands in Hwa Yuan’s empty dining room, his arms tightly crossed. The round tables, draped in white cloths, appear especially bare behind him. “I’m very sad for a lot of famous restaurants that will be shut down,” he says. “If we didn’t own the building, I would shut down this restaurant too. Because I can’t afford it, I tell you the truth. I can’t afford it.”