Showdown out of the Old West

Too bad the old Calabasas hanging tree is gone -- the one whose noose would swing, depending on which way the wind was blowing, toward the old adobe on one side or the western-style saloon on the other.

That symbol of quick frontier justice might have calmed the rift between the Leonis Adobe and the next-door Sagebrush Cantina that has riled this town at the western edge of the San Fernando Valley once called “The Last of the Old West.”

The adobe dates to 1844 and was the onetime home of Miguel Leonis, a gun-toting early settler who called himself the “King of Calabasas.”

Saved from demolition to make way for a supermarket in 1964, the old house is designated Los Angeles Historic Cultural Monument No. 1 and is operated as a museum by a nonprofit foundation.

The cantina opened in 1974 in a rustic storefront leased from the foundation. Its sprawling front patio and sawdust-covered dining room floor have helped turn the place into a contemporary local landmark popular with families and hordes of Sunday motorcycle riders alike.

For three decades, the adobe and cantina were happy neighbors. The cantina catered special events staged by the adobe. The adobe provided extra parking when weekend entertainment was staged at the cantina.

But for more than a year, the two sides have traded potshots, leaving locals wondering if there’s room for both of them along historic Calabasas Road.

As was often the case in the Old West, the dispute is over land and money.

Adobe association officials and their backers contend that the cantina has grown rich because the group’s founders gave it “a sweetheart deal” on its lease.

The cantina’s operator and his supporters assert that the Leonis Adobe Assn. is trying to gouge him on the rent even though the group is sitting on tax-exempt assets worth more than $7.5 million.

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Growing into a city

Everyone agrees that Calabasas has turned into a boomtown since the foundation’s Ray Phillips and cantina operator Bob McCord shook hands on the deal that launched his Mexican restaurant and bar in a tiny storefront sandwiched among two antique shops and a small bakery.

Calabasas residents voted in 1991 to incorporate so they could control growth and development standards. One of the new city’s first priorities was a beautification project that brought landscaped medians, fancy crosswalks and antique-looking streetlamps to narrow Calabasas Road.

The street quickly shucked its lingering image of the rough-and-tumble stagecoach stop that was a dusty stretch of El Camino Real 125 years ago. Trendy boutiques, hair salons and realty offices emerged from what had been rickety clapboard buildings across from the adobe.

In 1995, the legendary hanging tree, a long-dead 12-foot oak, toppled to the side of Calabasas Road during a winter rainstorm.

Gated enclaves of multimillion-dollar homes, meanwhile, were springing up nearby. The 67-acre Calabasas Commons shopping center opened a block away, featuring faux Italianate architecture, a gold-domed Rolex clock tower, artificial waterfalls and a parking lot dotted with Mercedes-Benz SUVs and Range Rovers.

So when the cantina’s lease came up for routine renewal in mid-2004, the adobe association said no.

“They were talking about tearing my building down and putting up a new 20,000-square-foot restaurant and bringing in a Ruth’s Chris Steak House or something,” McCord said. “They kept talking about how it was their fiduciary responsibility to collect as much rent as possible.”

The Leonis Adobe Assn. engaged an appraiser to find out how much the cantina property had appreciated as Calabasas blossomed and bloomed.

Former Leonis Adobe museum manager Tammy Ennis recalled that association President Don Adams and board member Camille Stoddard were unhappy with the appraiser’s suggestion that the cantina’s monthly rent be moderately raised -- from the $23,000 McCord paid in 2004 to something between $30,000 and $35,000.

“Don and Camille declined that appraisal and kept getting more appraisals until they got one they liked,” Ennis said.

Finally, a Calabasas real estate broker came up with such a figure: $55,000 a month. This time it was McCord who said no.

“There was no negotiation, none,” McCord said. “Then they said they’d take $50,000. Then Don and Camille came over in the back door and asked what I would do if they gave me a lease. I told them of improvements I wanted to make in the place and said I was willing to pay $31,000 and they left. Later I got a letter from their attorney saying that wasn’t enough.”

When McCord questioned why the nonprofit association was insistent on raising his rent when it had millions of dollars in the bank, things turned ugly.

Association board members stopped dropping into the cantina after their Wednesday evening meetings.

Staff members and docents -- who ate there for half-price -- were instructed to stay away, McCord said.

Adobe association officials said McCord was ineligible to exercise his lease-renewal option because he had failed to meet a requirement that included rent adjustments pegged to the Consumer Price Index. But McCord argued that adobe association officials had orally waived the increase provision.

In the past, “we did a lot of things through handshakes,” McCord said. In 1990, the adobe and the cantina negotiated the first written lease. By 2004, the contract included a complicated formula that tied the monthly rent to the cantina’s gross sales. McCord said he was required to keep all cash register receipts for two years in case adobe association officials wanted to audit them.

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Binding arbitration

In mid-2005, McCord filed a lawsuit asserting that adobe association leaders were dragging their feet over his option to renew the lease for an additional 10 years. The delay, he said, was blocking plans to upgrade the cantina. The lawsuit was dismissed in June when the two sides agreed to settle the dispute through binding arbitration.

By fall, the fight was becoming the talk of the town.

Adobe association backers said the foundation’s yearly expenditures were exceeding revenues, thwarting plans to create a Leonis Adobe video program to send to schools and a proposal to buy a bus to transport schoolchildren to Calabasas for fieldtrips.

Cantina supporters blasted the association for charging $4 apiece admission for visiting children’s groups when it had more than $2 million in certificates of deposit and was earning hundreds of thousands of dollars a year in rent from McCord and tenants of association-owned property across Calabasas Road.

Word circulated that board member Stoddard was trying to oust McCord because “she’s a teetotaler who doesn’t want the motorcyclists or a loud bar.”

McCord said he was puzzled too. “Did Don get mad because he got a bad meal here? Did Camille catch us slipping her husband a drink in a coffee cup?” McCord asked.

Adams said he cannot remember ever using the cantina’s back door. And “I’ve had good meals there,” he said.

Stoddard said she’s no teetotaler but has refrained from drinking at social events when she was pregnant or nursing. “People enjoy going there to drink and have fun, which is fine with me. I have no objection to motorcycles,” she said.

Stoddard said McCord sicced a Calabasas newspaper on the adobe association in hopes of producing a story critical of its handling of the rent dispute. “It is unfortunate that he chose litigation and intimidation tactics over cooperation. It is unfortunate that he is setting up a reporter in an attempt to malign us,” she said.

The newspaper disputed that. Las Virgenes Enterprise Publisher Kathleen Sterling complained that she was “stonewalled at every turn, and actually lied to” by association officials. She said they refused to allow her to review the nonprofit’s books and would not provide the name of its accountant.

Last month, the two sides learned that arbitrator Steven Stone, a former presiding justice for the California District Court of Appeal, had ruled in favor of the cantina.

McCord’s new monthly rent was set at $27,855, against 5% of the cantina’s gross of $5.5 million or more a year.

A spokeswoman for Stone’s office said there would be no comment on the case.

Association supporters were stunned. “Essentially McCord gets a reduction,” Stoddard said.

McCord and cantina backers were pleased. “That’s less than the $31,000 a month I offered to pay a year and a half ago,” he said.

The two sides will next learn who ends up paying legal fees in the case, which could total $250,000 or more. Usually, it’s the loser’s responsibility.

But for now, they’re both left hanging.

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bob.pool@latimes.com