Palladium Owners File Lawsuit Over City-Imposed Curfew : Hollywood: Operators say the regulations are an unlawful attempt to close the violence-plagued nightspot. They seek $50 million in damages.

Owners of the Hollywood Palladium sued the City of Los Angeles on Thursday, contending that a curfew imposed last month is an unlawful attempt to close the violence-plagued ballroom.

A spokesman for the owners blamed the curfew for the cancellation of dozens of events and said the ballroom will soon be boarded up unless the restrictions are lifted.

“If the Palladium closes, it will be like cutting part of the heart out of Hollywood,” said Larry Worschell, one of about 30 investors who own the 53-year-old landmark at Sunset Boulevard and Argyle Avenue.

The owners asked that the city be ordered to pay them $50 million in damages. If the City Council eases the restrictions, the lawsuit can be dropped, Donald P. Baker, a lawyer for the owners, said.

Under the restrictions, the Palladium must close by 1 a.m. on Fridays and Saturdays, and by 11 p.m. on Sundays. It may remain open until midnight other days.

Julie Jaskol, a spokeswoman for City Councilman Michael Woo, who represents Hollywood, called the lawsuit “a desperate attempt by the owners to pull themselves out of the mess they’ve created for themselves.”

“This is a public safety issue,” Jaskol said. “Having the police come out in riot gear periodically is not good business.”

The council voted 12 to 0 Feb. 9 to limit the hours of operation after persistent complaints that the Palladium--once the musical home to Lawrence Welk and other entertainers--had become a trouble spot.

Los Angeles police say at least seven people have been shot or stabbed at the nightspot in the last six months during rampages by patrons unable to get inside for sold-out events.

On Christmas night, more than 100 police officers were called to quell a disturbance. Two teen-agers were wounded by gunfire, and another person was stabbed.

In their lawsuit, the owners contend that the city is liable for damages because the restrictions make it impossible for the Palladium to continue as a profitable entertainment venue. They maintain that the action is tantamount to seizing the property by condemnation but without the payment the law requires.

The owners say that since the curfew was imposed, venues such as the Santa Monica Civic Auditorium and Pasadena’s Raymond Theater have siphoned off many Palladium events.

“We have two events left for all of March,” said Mark Midgley, who manages the Palladium for a Hong Kong businesswoman who leases it. “No one’s going to come to a rock concert that has to be over by 12 or 1 a.m.”

The Palladium’s troubles began last year when a city official, citing an epidemic of law enforcement problems, took steps to revoke the club’s permits for dancing and serving liquor. Zoning administrator James J. Crisp recommended that the ballroom be turned into a supper club. The owners later persuaded the Board of Zoning Appeals to spare the permits.

They then took the additional step of appealing to the City Council other restrictions imposed by the appeals board.

That was before the Christmas incident, which influenced the decision to restrict the hours.

The Palladium also faces problems with the state Alcoholic Beverage Control Board. That agency has started proceedings to revoke the Palladium’s liquor license.

On Thursday, Dan Sullivan, a former Los Angeles deputy police chief hired by the owners as a security consultant, said reports of unruly conduct at the Palladium were exaggerated. Crimes there reported to police had declined from 41 in 1991 to 17 last year, Sullivan said.

Sullivan added that the operators have taken steps to improve security, including the use of metal detectors and drug-sniffing dogs.