Shakespeare Theatre Company

Landlord's rent, eviction threat prompts suit

The Shakespeare Theatre Company (STC) has filed a lawsuit including court papers requesting an injunction to enforce STC's rights under longstanding agreements to occupy the theater in the Lansburgh building, the company's home for more than 20 years.

“Taking this dispute to court is a last resort—but after a year of good faith negotiations, we reluctantly concluded that we require an injunction to ensure that STC continues to occupy the theatre and that performances by STC and other arts organizations that have been promised use of the theatre will continue as scheduled,” said STC Managing Director Chris Jennings. “We are confident that the court will issue an injunction to block the eviction of  STC from the Lansburgh.”

In 1992, the Lansburgh Theatre was built specifically for STC as the quid pro quo agreed to by the developer of the Lansburgh apartment building (a partnership led by architect Graham Gund) to the Pennsylvania Avenue Development Corp. and the citizens of the District of Columbia for the right to develop the building. As part of this deal, Lansburgh Theatre Inc. (LTI) was established as a specialized nonprofit charity solely created to serve as the theatre's landlord and support the Shakespeare Theatre Company.

The requirements in LTI's Articles state that LTI may not change its “designated supported organization”—STC—and it must be responsive to STC, giving the company a significant voice in any major decisions. In addition, LTI lacks the power to terminate either STC's status as the supported organization or its right to occupy the theatre as long as STC performs its charitable purpose, which continues today. By law, no person including LTI, may have a private economic interest in the theatre property. Under the current lease agreement, 100 percent of the rent STC pays goes into a capital reserve fund that is held in trust exclusively to maintain the upkeep of the Lansburgh Theatre.

“LTI is clearly mismanaging its charter which dictates it must only be in existence to house the Shakespeare Theatre Company in the Lansburgh building,” Jennings said. “LTI has demanded a 700 percent increase in the base rent. Thus far we have been unable to find a more appropriate solution to what we felt was an unreasonable and groundless request. LTI would not budge and demanded that STC vacate the theater. Because LTI refuses to withdraw its threats, STC has been forced to seek a court injunction to force LTI to comply with its obligations and thus stop it from trying, illegally, to evict STC.”

STC's counsel, Randall K. Miller, a partner at Arnold & Porter LLP, said, “The court has broad equitable powers to do what justice requires, which in this case means a court order preventing eviction and possibly reforming LTI's Board of Directors to ensure that it is responsive to the Shakespeare Theatre Company and its charitable mission.”

“We are confident we will win this case,” Jennings said. “This will not affect any of our current performances, and the best thing patrons can do to help is to keep supporting STC in the same ways they have for the past 25 years. If you are a theater-goer, keep subscribing and attending performances, and if you are a donor or want to become one, we are grateful for your continued contributions. As they say, the show will go on!”

June 18, 2012

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