Festival of the Arts Sues City Over Rent

The Festival of the Arts filed a federal lawsuit Monday against the city of Laguna Beach, claiming that the high rent charged by the city is discriminatory and a violation of the nonprofit group’s 1st Amendment rights.

The city offered last week to reduce the festival’s rent by about $11,000, but organizers weren’t satisfied. The suit asks the court to order the city to charge fair market rent and seeks unspecified damages.

The lawsuit is the latest twist in three years of contentious lease negotiations. Under the current lease, which expires in September 2001, the festival pays 8.75% of the gross ticket, merchandise and restaurant sales, which amount to about $600,000.

The group’s attorney, Stephen R. Thames, said the suit is based on two premises: that the city charges more than fair market rent and that the festival pays far more than any other renter for use of similar property. For example, the neighboring Laguna Playhouse leases one acre for about $10,000 a year. Last year, the festival rented its 5.6-acre site for about $102,074 per acre.