Shakespeare Theatre Company is safe in the Lansburgh – for now

A DC Superior Court Judge has issued a preliminary injunction against Lansburgh Theatre Inc. and its principals, preventing LTI from tossing the Shakespeare Theatre Company out of its 7th Street home for refusal to pay LTI’s nearly sevenfold increase in rent. The parties are scheduled for another hearing on January 10, 2013.

Judge John Ramsey Johnson’s ruling was only the latest chapter in litigation which began last June, when LTI, a charitable organization created specifically to serve the Shakespeare Theatre Company, raised STC’s annual rent from $70,000 to $480,000. STC refused to pay, and when LTI sought to evict the company STC responded by filing suit.

The Lansburgh Theatre

The Shakespeare Theatre Company contends that its presence in the Lansburgh space came about as part of a deal which the Pennsylvania Avenue Development Corporation and its owner, Graham Gund, reached to acquire the Lansburgh building. STC’s pleadings contend that Gund and his corporation agreed to provide a space for STC in the building as part of the terms of the building’s purchase. Gund and the Development Corporation then created LTI as a “supporting organization” to serve as the Shakespeare Theatre’s landlord. Landlord and tenant entered into a 20-year lease, setting rent at $70,000 a year. The Development Corporation contributed $1 million toward that rent, and so for the first fourteen years STC paid only $1 per year.

The twenty-year lease came to an end this year, and LTI sought to increase annual payments to $480,000. STC contends that the increase violates LTI’s charter, which requires the charity to serve the interests of the theater. Although the lease was for twenty years, LTI’s responsibilities to the Shakespeare Theatre Company are perpetual.

One of the central issues in the litigation is STC’s contention that LTI may charge no more rent than is necessary for the maintenance of the theater space. LTI contends that the Lansburgh Theatre requires millions of dollars in repairs and argues that STC is using revenues from the Lansburgh to support its productions in its Harman Hall facility on F Street.

So far, the Shakespeare Theatre has won every battle between the two parties. Earlier this year, it  won a temporary restraining order which kept it in the Lansburgh until now. It successfully resisted an effort to transfer the case to Federal court. And on December 3, an LTI motion to dismiss the lawsuit was denied.

The effect of this ruling is to keep the company in the theater until matters are resolved. “The order entered today provides protection and security for the Shakespeare Theatre Company and safeguards a cultural treasure, the Lansburgh Theatre,” STC’s lawyer, Randall Miller, said.

The Company will host a return of C.S. Lewis’ The Screwtape Letters December 19-30 and will stage Eugene O’Neill’s Hughie January 31 to March 17 of next year.

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