Conflict Involves 300-Acre Site : Irvine Co. Suing Lion Country for Rent on Amphitheater, Park Land

The Irvine Co. turned up the heat this week on a lawsuit that is ostensibly about the rent paid by Irvine Meadows Amphitheatre and Wild Rivers amusement park, but which the other side says is really about control of 300 valuable acres in Irvine.

The Irvine Co. is suing Lion Country Safari for more than $800,000 the big landowner says it is owed in back rent on the amphitheater and amusement park. Irvine Meadows and Wild Rivers lease land in Irvine from Lion Country, which in turn leases the 300 acres from the Irvine Co.

This week the company asked the courts to freeze $800,000 of Lion Country’s money--plus another $600,000 in interest and lawyers’ fees--while the suit continues. The Irvine Co. contends that it has not been paid a dime by Lion Country since 1984.

The company said it was compelled by Lion Country’s “precarious financial condition,” which “has reached a critical level.”

The Irvine Co. says it has helped keep Lion Country afloat for years and Lion Country’s own suit against the company is “like biting the hand that feeds you.”

“In essence, we’ve been taken advantage of,” said Christian F. Dubia Jr., a lawyer for the Irvine Co.

Lion Country, however, says the Irvine Co. has been trying to get it off the land since the late 1970s.

“What they’d like to do is develop that land,” said Brian Lysaght, a lawyer for Lion Country. “When the Irvine Co. realized Lion Country could not be forced off the land, they started this dispute over the rents.”

Lion Country Safari has held the lease since 1969 and had operated a drive-through wild animal park on the land until it closed in 1984. Lion Country then persuaded a limited partnership called The Splash to build the amusement park.

Lion Country said the Irvine Co. opposed the water park every step of the way. A company demand that the new amusement park carry $10 million worth of liability insurance was excessive and unrealistically high, said Lysaght.

The Splash sued the Irvine Co. over the insurance issue in 1986. A judge ruled that while the park didn’t have as much insurance as the Irvine Co. demanded, it had made a good-faith effort to obtain that much. The judge allowed the park to open in June, 1986. The suit, however, continues, part of a thicket of litigation around the dispute.

According to its latest annual report, Lion Country charges Wild Rivers $475,000 a year or 10% of its revenue, whichever is higher. In 1986, the year the amusement park opened, Lion Country received $475,000. In 1987, however, Lion Country paid the amusement park $404,000 as part of a rent rebate. Last year’s figures weren’t available.

The amphitheater, meanwhile, was built in 1981 and paid Lion Country rents of $585,000 in 1985, $409,000 in 1986 and $633,000 in 1987, according to the annual report. Under a separate agreement, it already pays the Irvine Co. rent on its own.

Lion Country is a subsidiary of United Leisure Corp., a public company in Laguna Hills that has reported losses from 1983 to 1987, the latest full years for which figures are available.

According to a Securities and Exchange Commission filing for 1987, the company was heavily in debt at the time and lost $281,000 on revenue of $1.6 million. Its only business is leasing the Irvine Co. land, on which it holds the lease until 1997.

Lion Country depends heavily on the rent from Wild Rivers and--should the Irvine Co. win its suit--Lion Country’s share of the revenue from the water park would drop drastically, Lion Country said in its latest annual report.

The Irvine Co. says it is entitled under its lease with Lion Country and later amendments to about $100,000 a year as a base rent and 5% of the gross ticket revenue at the amusement park and the amphitheater.

That’s an unreasonably high percentage, Lion Country contends; its lawyers think the agreements aren’t clear on whether the Irvine Co. should get that much. And anyway, says Lion Country, it was bullied into signing amendments to its original lease in order to get the amphitheater and the amusement park built.

“Those amendments were entered into at gunpoint,” said Lysaght, the Lion Country lawyer.

Nonsense, says the Irvine Co. The courts--all the way up to the state Supreme Court, which refused to hear a Lion Country appeal--have already upheld the company’s rent agreements with Lion Country, said Irvine Co. General Counsel Peter Zeughauser.

A judge will probably hear the company’s request to freeze Lion Country’s $1.4 million next month, and the case could come to trial within a year, lawyers in the case say.