The dispute between the owner of Mellos and the owner of the Dalhousie Street building where the restaurant has operated for more than 70 years has escalated to involve police and a bailiff after the iconic neon Mellos sign was removed last night.

Mellos served its final meals to a packed house Monday night after its landlord refused to renew its lease, instead offering the space to neighbouring restaurant Ace Mercado. Mellos was supposed to have the space until the end of December but the owner took early possession with the help of a bailiff on Tuesday.

Both sides are at odds over who is entitled to the sign.

Property manager Domicile Commercial Management said in a written statement the removal of the sign, damage to fixtures in the rented space and vandalism to Ace Mercado on Monday night, including eggs and ketchup on the outside of the building, prompted the decision to involve a bailiff.

"We want to express our deep disappointment and shock regarding the recent act of vandalism undertaken against Ace Mercado restaurant, another one of our tenants. We are assisting Ace Mercado in cleaning and repairing the damage," the statement said.

'We own the logo'

Martin Fremeth, who has owned Mellos for nearly five years, told CBC News hours before the sign was removed that he was in discussions with his landlord about the sign but firmly believed he should keep it.

"We own the name and we own the logo. Basically, the sign has been here a long time — even before the owner owned the building. So we say the sign is ours, they say the sign is theirs," he said. "Basically, it's up for interpretation, right?"

Fremeth also said Monday night that he did not know if or when the sign would be removed.

Mellos owner Martin Fremeth said he should be entitled to keep the restaurant's iconic neon sign despite his landlord's objections. The sign was taken down hours later on December 21, 2015. 0:53

Mellos sign found

The Mellos sign was outside a neon sign manufacturer in east Ottawa, the day after being removed from its spot on Dalhousie Street. (Matthew Kupfer/CBC) Const. Marc Soucy said the owner of the building called police between 10 p.m. and 11 p.m. Monday night over concerns about the sign.

It was located by police on Tuesday, and was seen stored outside a neon sign manufacturer in an industrial park in east Ottawa.

Police have not laid charges as they try to determine who is entitled to keep the sign — a matter complicated by the City of Ottawa's heritage conservation designation for the ByWard Market, Soucy said.

Since the Dalhousie Street building, including the Mellos sign, is protected under the Ontario Heritage Act, an application to the city is required to move it, said Sally Coutts, co-ordinator of Ottawa's Heritage Services Branch, in an email to CBC News.

She said no such application has been made.

Ace Mercado take possession in new year

Mellos has had various owners but operated at the same location since 1942.

Domicile Commercial Management was not swayed by a "Save Mellos" campaign, including an online petition to let the current owners continue to operate in its longtime location.

"The decision not to renew the lease with the current tenants was taken by the property owners after careful consideration of the overall business relationship," Domicile Commercial Management said in a written statement on Tuesday.

Ace Mercado takes over the space on January 1, 2016.

Fremeth said he hopes to reopen Mellos "within steps" of its former home sometime in the new year but added that could depend on securing partners, as well as the outcome of a fundraising campaign.