Themuseum's chief executive David Marskell announced Tuesday afternoon Imbibe's owner Bill MacTavish would be leaving by July 1 — news that initially appeared to catch the young restaurateur off-guard.

MacTavish, who recently took over The Boathouse in Victoria Park, said he wanted to notify his staff that his three-year stay at the King Street address was coming to an end before making any further comments.

"It's unfortunate that we were unable to agree on a new lease agreement. At this point, the future of Imbibe is uncertain," he said in an email.

After negotiations to extend the lease disintegrated this winter, Marskell said he was officially told Imbibe wouldn't renew the arrangement past June. Themuseum wanted to increase the lease rate on the roughly 1,000-square foot store front, and Imbibe was outgrowing the space, he said.

"I just found out today that they will not be extending the agreement beyond June," Marskell said. "The space has its limitations for a restaurant, and it was never meant to be a restaurant."

After extensive renovations, MacTavish reopened The Boathouse, with space for about 150 people and another 135 on the patio, in January. Marskell described Imbibe as the "startup" that allowed the restaurateur to expand into the much larger venue.

Since opening almost three years ago, Imbibe drew fans for its live music, rare King Street patio, focus on craft beers and unique menu.

Marskell now hopes to find a new tenant for the street-front location willing to pay "market rates" for rent. That could include another bar or restaurant, retail outlet or gift shop that complements Themuseum's goal to bring more people downtown, he said.

The partnership with Imbibe, while it lasted, was good for both sides, Marskell said. MacTavish was given a discount on rent and allowed use of the site's chairs, tables, refrigerators and other equipment, he said.

"We gave them a great deal to open here at the beginning," he said. "I think it was a good opportunity for both of us, with good benefits for both of us."

In the meantime, Themuseum plans to get its own liquor licence so it can host more events geared toward young professionals, Marskell said in a press release. He's also looking at alternative ways to provide food and drinks for visitors.

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Marskell said he's open to a range of possible replacements, including a potential showcase venue for some of the region's startup firms. As a non-profit organization, whatever goes in there also has to bring in some revenue, he said.

"I'd like to cast the net a bit and see what comes," he said. "It has to work with what we do. For us to put in a shoe store would not make any sense … but we're open to lots of ideas."