No Vacancy Lounge, the downtown dance club Willamette Week named its 2018 Bar of the Year, announced its closure suddenly last week, citing the financial strain of an ongoing legal fight with their landlord.

The club will shutter after a free party tomorrow night.

No Vacancy opened in late 2017 in the ground floor of the Henry Failing Building, inside the space formerly occupied by the flagship location of the McCormick and Schmick's restaurant chain. Mixing old-school glitz with futuristic club sounds, Willamette Week described the club as "the most ambitious DJ-forward dance club Portland's seen in years."

But almost immediately upon opening, there was tension between the club and the building's owners.

"We were fighting them every show," No Vacancy co-owner Rick Sheinin tells WW.

According to a lawsuit filed by No Vacancy's ownership group last July, the owners of the property, Lauren Louise LLC, attempted to terminate the club's lease only two weeks after opening due to noise complaints from the building's upstairs tenant, architecture firm Walker Macy.

Sheinin says he and his partner, Billy Vinton, later learned that, at some point between the closure of McCormick and Schmick's in 2009 and the opening of No Vacancy, Walker Macy had negotiated a provision in their lease prohibiting the leasing agent, Melvin Mark Properties, from allowing a nightclub to move into the space.

In the lawsuit, No Vacancy's owners say they were clear about the kind of business they planned to operate, and that sound levels were "in line with industry standard." According to the lawsuit, however, either Melvin Mark or Lauren Louise led Walker Macy to believe their new downstairs neighbors would be a whiskey lounge, not a dance club.

In order to stay open, the building's owners insisted No Vacancy install sound-proofing that would have cost "several hundred-thousand-dollars"—on top of the nearly $1 million Sheinin and his partners had sunk into redesigning the space—and require the bar to close for two months.

The lawsuit refers to the proposal as a "death sentence" for the club.

In July, Lauren Louise issued a notice of default to No Vacancy, stating that unless they agreed to institute the sound mitigation proposal within 20 days, their lease would be terminated.

No Vacancy sued to protect themselves from eviction and confirm they were in compliance with the lease. But the legal fees, combined with what Sheinin calls the "emotional timesuck" of the lawsuit, became too much to bear.

"We believe that the Landlord and Melvin Mark fraudulently induced us into signing a lease in the hopes of leasing up the building and then selling it," the club wrote in a statement announcing the closure. "The past and anticipated costs of this litigation have financially devastated us and have led to us having no option but to close our beloved business."

Attorneys for Lauren Louise did not respond to requests for comment.

Sheinin says No Vacancy still had eight years left on its lease. He says he and Vinton plan on amending the lawsuit for surplus damages.

The club is now working on finding new venues for its previously scheduled events, and the organizers are considering going back to its roots as a pop-up party.