El Quijote could almost always turn an evening into an event, a rare quality in a restaurant whose playlist consisted of elevator-music arrangements of songs by the Beatles and Led Zeppelin.

The 200-seat El Quijote also had a door next to the Chelsea’s lobby, luring guests like Arthur Miller and Dylan Thomas with hearty portions of Spanish fare served by waiters in scarlet blazers.

El Quijote, the charming and perennially popular Spanish restaurant on the ground floor of the Hotel Chelsea, is in the process of being acquired by Chelsea Hotels, the new company that owns the ...