Merewether's landmark Beach Hotel is back on the market after the owners won approval for a controversial development application.
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Owner Andrew Lazarus, who bought the pub just over two years ago, confirmed on Wednesday that the property was for sale.
Mr Lazarus would not comment about the reasons for the sale, but the Newcastle Herald has been told that many former customers, especially young people, have boycotted the hotel over a high-profile court case involving Mr Lazarus' son Luke.
Luke Lazarus was found not guilty in 2018 of sexually assaulting then 18-year-old Saxon Mullins in an alleyway behind his father's Kings Cross nightclub in 2013. The not guilty verdict followed two trials and two appeals and sparked a debate over consent laws.
The Beaches is on the market just two days after the Land and Environment Court approved plans for a $3 million renovation.
The court ruling formalised the pub's approval to open its ground floor to 3am every night except Sunday.
Andrew Lazarus bought the hotel in 2019 for an estimated $20 million or more and launched plans for a new upstairs terrace overlooking the beach and live music venue.
A Newcastle real estate agent said the resale came as no surprise given the customer boycott and the bruising battle over the renovation plans, which City of Newcastle and many Merewether residents opposed.
"I think it's the only way they can get past that boycott," the agent said.
"That's the play for the guys at the Beaches. They just haven't been able to get the traction with the right crowd.
"You've got to get those young punters in. Sunday afternoons and Sunday nights at the Beaches used to be massive, and, if they boycott, you've got lots of real estate there that's not earning you money."
Nearby resident PJ Fallon, who helped lead opposition to elements of the renovation plans, said the sale was not unexpected.
"We always knew this was happening. We knew about the boycott, but we didn't ever really mention it as part of our objection," he said.
"The community spoke loudly in that regard. We're happy to work with whoever goes in there; we just want it to be run for the best for them and the community.
"He shouldn't have any trouble selling it. It obviously just comes down to the price, but there's plenty of interested parties."
Mr Fallon said the boycott had started as soon as the pub changed hands in 2019.
"It all came from the kids, the 18- to 25-year-olds. They're the ones who led the unofficial charge on this, and they've spoken with their feet.
"They just don't go, every under-25-year-old that I know.
"It just came out of nowhere. It wasn't a coordinated attack by anyone.
"Living nearby, you get people driving past and yelling out. You get more noise from people abusing the pub than you do the noise from the pub."
Mr Fallon said the owners had not been "bad operators or gone out of their way to upset the community at all".
"I feel in some small way quite sorry for them with regard to all this, but it is what it is."
Mr Lazarus also owns Shoal Bay Country Club and Hamilton's Exchange Hotel.
The Commonwealth Hotel in Cooks Hill is also for sale. The Newcastle Herald has been told the Laundy Hotels group is interested in buying the Commonwealth and the Beach Hotel.
Both pubs are being sold by specialist pub brokerage HTL Property.
HTL managing director Andrew Jolliffe said the Beach Hotel could fetch more than $40 million now the development application was approved.
"The DA is a good one and allows a new owner to maximise the space," he said.
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