Michael Angelo, the artistically named owner of the Wonderland Beauty Parlor on West 13th Street, has a far better idea for sprucing up old cobblestone-lined Gansevoort Square than, say, installing a fountain, or opening a farmer’s market, as others have suggested.

“A great statue of Florent,” he has proposed, “dressed up as Marie Antoinette, spitting water out and surrounded by pigs. I think that would be fucking fabulous.”

Mr. Angelo was referring to Florent Morellet, flamboyant owner of the iconic Florent diner at 69 Gansevoort Street, who has been known to dress up as the famous French monarch at his annual drag-queen-themed Bastille Day parties—though he might as well sport a coonskin cap, given his reputation as a neighborhood pioneer.

The charismatic 54-year-old restaurateur first started serving up steak frites back when S&M clubs still bounded the meatpacking district, eons before the many upscale eateries, chic boutiques and hip hotels you see today. Florent’s 1985 opening predated Keith McNally’s Pastis bistro and Jeffrey Kalinsky’s upscale clothier Jeffrey New York—both similarly considered trailblazers for the once-seedy area—by about 14 years.

“The neighborhood is what it is because Florent stuck his little stake there,” said Mr. Angelo, who called the eatery operator “one of my heroes,” citing his outspoken activism on issues ranging from gay rights to last year’s brouhaha over the nearby Hotel Gansevoort’s giant billboards. (“When Florent leaves work, he’s out there trying to make the world a better place when so many others have their nose in a plate of coke—that’s an amazing thing for a restaurateur,” he said.) “And he’s been waving that flag for decades.”

Maybe not for much longer, however.

Far from erecting a lasting monument to meatpacking’s founding father, the neighborhood that Mr. Morellet helped popularize is instead pushing him out.

On Tuesday morning, Mr. Morellet, vibrantly dressed in an orange hooded jacket and multicolored scarf, squared off in housing court against a landlord who wants him evicted over $24,072 in unpaid rent dating back to September—a sum the restaurateur has refused to pay because he believes the landlord isn’t holding up her end of the deal.

Specifically, his lawyer has argued, landlord Joanne Lucas, who lives in Massachusetts, has repeatedly failed to file tax certiorari forms with the state, which are required under the lease and which would reduce the restaurant’s share of tax increases on the property. Due to the paperwork snafu, Mr. Morellet has overpaid his portion of the tax burden by more than $27,000 over the past six years alone, according to court papers.

“We want our money back,” Mr. Morellet told The Observer. He’s also seeking $150,000 in damages.

Even if he wins the court dispute, though, the bitter landlord-tenant feud doesn’t bode well for other pending issues, particularly the restaurant’s lease, which expires on March 31. Mr. Morellet indicated that the two sides haven’t had renewal talks since the tax issue came to a head this past summer.

One retail broker contacted by The Observer confirmed that he is already “silently marketing [the Florent space] to a few different people.” (The agent declined to name specific suitors.)

“I know this restaurant—Florent is a great place,” remarked Judge Matthew Cooper upon agreeing to hear the two sides’ arguments on Tuesday.

“Better go this month because his lease is up,” warned landlord attorney Steven Sperber.

“They want to put in a Gap or a Starbucks!” said Florent lawyer Michael Cohen.

Judge Cooper said he would render a written decision on the tax dispute in the coming weeks.

Meanwhile, whoever occupies the space come April 1 can expect the rent to skyrocket. Under Florent’s existing lease, signed in 1995, Mr. Morellet now pays just $6,018 per month for the roughly 1,500-square-foot space with the pink neon window sign and pink ceiling. That’s about $48 per square foot annually in a neighborhood where asking rents now go as high as $500 per square foot.

Mr. Morellet previously told The Observer that the landlord now wants a whopping $70,000 per month; the broker indicated that figure was actually closer to $43,000 per month—a huge hike, in either case, and a potential backbreaker.

“Florent is an institution in that neighborhood, and it would be a terrible irony if he ended up being a victim of his own success,” said Andrew Berman, executive director of the Greenwich Village Society for Historic Preservation, an organization that counts Mr. Morellet among its board members.

“It’s one of the challenges of business—even positive promotion of your community may ultimately backfire against you,” agreed Roy Liebenthal, proprietor of nearby Pop Burger on Ninth Avenue. “I think it’s sad if that’s what ends up happening to Florent because he was the biggest advocate to make the meatpacking district what it is. But that seems to be the normal pattern in New York. The small cool shops and restaurants come in, make it a happening place, then they all get pushed out. The development of the neighborhood makes it impossible to succeed—it kills the goose that laid the golden egg.”

If his proverbial goose is truly cooked, then Mr. Morellet has no regrets. “If we are to close,” he said, “it’s good to close while we’re doing really great, rather than not.” He said Florent’s final month in business would be one big celebration, perhaps complete with commemorative handkerchiefs.

He does not intend to relocate. “I don’t want to open a restaurant elsewhere,” he said. “It would be a mistake to open another Florent because everyone would compare it to this one. Florent became organically from the space itself—you couldn’t re-create it.”

He doesn’t fault the landlord for trying to cash in. “Until we, as New Yorkers, decide to pass laws to have rent control commercially, landlords should be able to charge what they want,” he said.

He’s just hoping the cycle comes full circle. Could a recession reverse his fortunes? “Real estate prices are starting to tumble,” noted Mr. Morellet, whose own block is marked with several vacant storefronts where former ventures failed to survive amid the recent high-priced retail environment.

“It’s funny because that block looks more and more like it did when I opened 23 years ago; it’s very gloomy,” he said, laughing. “Maybe the little doll that I have with all the little needles in it is paying off.”