One of Downtown's oldest restaurants filed for bankruptcy this week, citing the loss of a tenant in a building it owns and a drop in business as fewer shoppers come to that part of town.

The Smithfield Cafe plans to restructure its debt, remain open and emerge from Chapter 11 bankruptcy in about 90 days, owner John Petrolias said Wednesday.

"I'm sure we'll stay open," he said. "It's just a reorganization."

Petrolias has owned the restaurant and bar at 639 Smithfield St. since 1958. It was founded in 1933 by his father, James, who immigrated to the United States from Greece in 1912.

The Smithfield Cafe is the oldest Downtown restaurant operating in the same location, Petrolias said. Mitchell's, established in 1906, is older but has changed locations several times. It has been on Ross Street since 1977, according to its website.

The bankruptcy, filed Tuesday in Bankruptcy Court in Pittsburgh, was spurred by two factors, Petrolias said. He owns the eight-story building in which the restaurant occupies the ground floor. The Pittsburgh Technical Institute, which leased the upper floors for 15 years, moved out in early 2009, and Petrolias said he's had trouble finding a new tenant.

This year, sales are down about 5 percent, he said, part of a long-term trend as department stores and other retailers have left the Smithfield Street area.

On already thin margins from the loss of lease income, Petrolias said the small drop in business was enough to force the bankruptcy filing.

Petrolias listed $220,712 in debt to 15 unsecured creditors, including $105,000 to the Internal Revenue Service and $31,008 to C.A. Curtze Co. & Specialty Steak, Erie, in the filing.

The filing states the business has assets of between $50,001 and $100,000 but does not list individual assets. The building has an assessed value of $213,000, according to Allegheny County records.

Downtown retail activity has shifted to lower Fifth Avenue, near Liberty Avenue, in the past few years as that area has had more building renovations. Last week, Saks Fifth Avenue, just two blocks away from the Smithfield Cafe, announced that it would be closing, joining Lord & Taylor and others to have closed stores in the same area.

The five-story former Lord & Taylor across Fifth Avenue from Macy's remains empty, seven years after it closed. Next door, the Union Trust Building at Fifth and Grant has several street-level vacancies. And Macy's last month said it would consolidate its store from nine floors to six.

A Burlington Coat Factory and Brooks Brothers clothing store remain in the area.

Across the street from the Smithfield Cafe, Jack Cohen owns S.W. Randall Toyes & Gifts, which has been on Smithfield Street for 33 years. Cohen said business has been good, even with a drop in traffic.

But, he said, his store sells toys and other items that are difficult to find elsewhere.

"You have to be unique today to survive," he said.

Petrolias also complained about the impact of the state's smoking ban, which took effect in September 2008. Several nearby bars can allow smoking because they don't sell as much food as the Smithfield, drawing away bar customers who want to smoke, he said.

"That ban put a big, big crimp in our bar business," he said.

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