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I just went to a wedding at Battery Gardens. Great views, and the food was really good. I'm not sure how much it was per plate, but the cost of the wedding was pretty reasonable from what I understand.
A lot of restaurants have private rooms, but I think dinner for 40 will be tough especially with a $5K budget. Actually if you have a friend who lives in a full service doorman building, usually they have event rooms you can rent out and bring food in. That will be the most cost effective option because the rental fee is usually very minimal like $400. We almost did this for an engagement party, but didn't end up having it. One of my bridesmaids lives in a full service building with a beautiful room you can rent out and it easily would have fit 50 people for a dinner.
We did ours at Villa Moscani for 35 people. Cute old school Italian restaurant with a private enclosed garden area in the back. It's on MacDougal street. I think with all the food and unlimited beer and wine is was a little under $4000. Really nice people, great food and great service
I did La Mela in Little Italy - We had around 40 people and it only came to $2K ish - They serve a TON of food and its delicious! - they have a couple back rooms to choose from - everyone loved it!
ours was in the private room at Jane on West Houston. My in-laws hosted, so not sure of the cost, but it fit 35 people easily. Could probably fit up to 50.
we're doing ours at the Palm in Tribeca, they have 3 private rooms, there is no charge for the space and you can do a price fix for about $70 a head and then alcohol can be consumption. Should make it possible to keep 40 people under $5k. Good luck!
We had similar specifications to yours, and we're doing ours at Stella Maris in the Seaport. Il Brigante in the Seaport and Centro Vinoteca in the Village were two other places we looked - both can definitely fit that amount of people and come in under $5K (actually under $4K, b/c that was our budget). Centro Vinoteca has a private room, and Il Brigante and the Stella Maris will close the restaurant for you (though we had 50 people, not 40, so I don't know if that'll make a difference in their willingness to close). Good luck!
We did ours at Sequoia at the South Street Seaport (it's part of Ark Restaurants). They were AMAZING!! 3 courses, open bar for 5 hours, flowers and decorations, they did everything for about $80/head. We got a private room upstairs. Our dinner was a little bigger (maybe 70 or 80 people?) but if I remember correctly they would have done it for 40-50 -- worth a phone call!!
We're leaning towards Trattoria Trecolori in the Theater District. They have a private room upstairs that seats 50 or so, with a private bar and AV facilities. I've eaten there before and the food is good. They offer seated dinner and buffet options - all the info and prices are on their website:
http://www.trattoriatrecolori.com/parties.html
My other top choice was The Smith as the prices per person are quite reasonable, but it turns out they have a $4000 food/beverage minimum, which we weren't going to reach with our group of 50 or so. Also we want to have welcome drinks in a bar afterwards (we have a ton of out of town guests coming in and can't invite them all to the rehearsal dinner) and we felt there were more suitable bars - as in, larger, quieter, more parent-friendly - in the Theater District, compared to the East Village.
We did our r-dinner for 40 people at the Landmarc in TWC (private room) and it was under $5K.
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We are looking to have around 40 people and want to keep the budget at $5000 or below. Thanks!!!