Operator of Greek Theatre Drops Suit Over Lease

The operator of the Greek Theatre has agreed to drop a lawsuit against the city of Los Angeles in exchange for permission to withhold $1.78 million in rent payments as a way to recoup costs of renovating the city-owned venue.

The City Council voted Tuesday to approve the settlement with Greek-Nederlander Inc. Council members said giving up three years’ worth of rent checks was a justifiable trade-off for the renovation, which increased the number of restrooms at the Los Feliz theater.

“This way we get the restrooms done, and an inadvertent benefit is the lawsuit goes away,” said Councilman Mike Feuer.

Greek-Nederlander Inc. has the theater lease through October 2001. It began the restroom expansion project after the City Council voted last December to extend that lease for five more years.

But the council reversed itself and voted Jan. 26 to rescind the extension and put a new 10-year contract up for competitive bid. The action was taken after a second firm, Universal House of Blues, objected to the extension and gathered signatures for a referendum to overturn it.

Greek-Nederlander sued the city as well, arguing that it intended to pay for the renovation from what it made under the extended lease. With this week’s settlement, the theater operator has agreed to compete for the new contract in exchange for the right to withhold its rent through 2001, said Adam Burke, the firm’s attorney.

“We will be paying the city rent through improvements, not cash,” he said.

The cost of the renovation is estimated at $1.78 million. The company has been paying the city about $500,000 in annual rent.

Parks Commission President Steve Soboroff said the settlement is a good deal for taxpayers, who will still own the renovated Greek Theatre when the work is done.

The project would have cost more and taken more time if the city had taken on the work itself, Soboroff said.

George Mihlsten, an attorney for Universal House of Blues, said he was glad Greek-Nederlander agreed that the contract must be put out to competitive bidding.

“The city will get a much better deal than what Nederlander offered in its secret deal,” Mihlsten said.