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City says Hollywood Diner wasn’t complying with lease

The city terminated its lease with the Hollywood Diner and the Chesapeake Center for Youth Development because the nonprofit organization was not complying with all of the terms of the agreement, Baltimore’s comptroller said Tuesday.

Joan M. Pratt said that CCYD, which has run the landmark eatery for more than 20 years, using it as a training program for students, did not submit reports detailed in the lease agreement regarding the money it spent on equipment and repair.

CCYD also sublet the diner to Cheryl Townsend, who has run it since last March, without permission from the city, Pratt said.

“They were to come to the city for approval,” Pratt said. Townsend has a right of entry agreement with the city to stay there until March 31, after which the city will make a decision based on new requests for proposal.

The city terminated the lease with CCYD on Dec. 14, 2011.

Townsend reopened the diner on Feb. 1 after closing it for a month to redecorate, hire new staff and improve the menu. Now, she’ll have to submit a bid before April — and have it approved — if she wants to stay.

But Townsend said Monday that it is unlikely she would submit a new bid to run the diner.

“At this point right now, no,” she said. “I’m not going to bid on it.”

Townsend said some friends have encouraged her to stay at the Hollywood Diner, located at East Saratoga and Holliday streets, and known for being a major set piece in Barry Levinson’s 1982 movie “Diner.” But she said she’s already looking around for another place to set up shop.

Townsend said the diner is getting a reputation for being closed, and she doesn’t want to be affiliated with a place like that.

But Pratt said there are others who have expressed interest in running the diner, and the city will accept a proposal that best suits its vision.

“We want to make sure the operator will provide a training program for students,” she said. “We want the operator to properly market the restaurant.”

Pratt also said the city is looking to collect rent based on a valuation of the property, and to have reports submitted on the money spent on the diner.

“I have spent a lot of money,” Townsend said. “I’m just not going to keep on spending money. If they want to get somebody that’s got big, deep pockets … to fix all those things up … I wish them well.”

She did not want to say publicly where she is looking to move to if she decides to not to bid on the Hollywood Diner because she has not made up her mind.

“I don’t feel like opening, closing, opening, closing,” she said. “It’s just a headache. When you’re in this business you want less stress.”

However, Townsend did say that she’ll be bringing her staff — some of whom she just hired for the reopening this month — should she decide to move.

Ivan Leshinsky, executive director of the Chesapeake Center for Youth Development, did not return calls for comment.