Madrid's historic Café Gijón manages to hold on to its terrace

"We are very happy," says José Manuel Escamilla, one of the owners of Madrid's historic Café Gijón, upon hearing the news earlier this week that the establishment will be able to keep its terrace in front of number 21, Paseo de Recoletos.

According to his calculations, the terrace provides 70 percent of the café's revenue; its survival guarantees a landmark that first opened its doors in 1888 and has served as a regular meeting point for some of Spain's leading intellectuals and artists of the 20th century.

The owners had given it up for lost when, a few months ago, Madrid City Hall put the running of the drinks stand and terrace out to tender, and a company presented a huge offer of 144,000 euros a year.

Endre Santa Engracia won the bid, but now it has pulled out of the deal, as Madrid arts chief Fernando Villalonga confirmed on Monday.

The Gijón was a meeting point for leading intellectuals and artists

"We still don't know anything officially, but we were sure something like this was going to happen," said Escamilla. The 144,000-euro-a-year bid, he said, was too high for the amount of business the terrace could provide. The opening price had been 65,000 a year for 15 years, extendable to a maximum of 75 years. The café had offered 70,000 euros.

Endre Santa Engracia, which belongs to the Madrid restaurant group that won other public competitions to run the kiosks and cafés along the Madrid Río development, sent a letter to City Hall revoking the concession on August 6, according to Abc newspaper. In the letter, it cited the crisis, problems in obtaining financing and the fact that regional deputies wanted to turn the historic café into a Site of Cultural Interest (BIC) as factors.

"The Café Gijón will stay," Villalonga said on Monday, according to the Efe newswire. "The outcome is a good one for all, but especially for the arts department, [which] values the literary tradition of the café enormously."

It was the money that had been decisive in the competition, but the Socialist spokesman in City Hall, Jaime Lissavetzky, also proposed taking cultural factors into account. In May the Madrid regional department of the vice-presidency, culture and sport had unanimously approved a Socialist motion urging the regional government to declare the café a BIC.

The bid was too high for the amount of business the terrace could provide

Villalonga said the procedure to grant the café BIC status was "underway but in principle the terrace will not have it."

"Mission accomplished," said the Madrid Socialist Party's culture secretary, Pablo Nieto, after hearing Endre's decision. "Separating the Gijón from its terrace would have meant the closure of one of the greatest emblems of culture - not just in Madrid, but in the whole of Spain."

After it emerged in the media that a company had doubled the bid of the current owners for the terrace, City Hall had offered them another terrace on Paseo de Recoletos, though not opposite the café and without a kitchen. The Gijón had applied for it, Escamilla confirmed, though it also filed an appeal against the loss of the current site. "We did not agree with the company's offer. That was not good business for anyone," said Escamilla.

As of Monday there was still no official confirmation about Endre's withdrawal, as those in City Hall responsible were on vacation.