The city of Hollywood has agreed to pay $2 million to Chabad Lubavitch, an Orthodox Jewish Synagogue, in a last-minute settlement to avoid a court battle. The settlement was reached the day both sides were to pick a jury for the religious discrimination trial in federal court. The settlement must be approved by the City, which will meet for a formal vote.

The agreement will also allow the Synagogue to operate permanently from inside its two homes, located in a Hollywood Hills residential neighborhood. The Chabad will also be allowed to expand within a city block without having to seek a special permit. In return, the Chabad and the Department of Justice agreed to drop their discrimination lawsuit against the City and Commissioner Sal Oliveri, accused of leading a crusade to get the synagogue ousted.

The City pulled the Chabad's permit in 2003, which sparked a discrimination lawsuit and years of debate. The suit claimed the city showed bias when it rejected the special permit while allowing other religious groups to conduct services in residential homes. The Chabad moved into two houses in 1999 and started remodeling one of the houses into a synagogue, drawing anger from the neighbors. A zoning board granted the Chabad a permit, but just 53 days later, the City Commissioners voted 4-3 to revoke the special permit, citing zoning issues. The Chabad sued, with the Department of Justice joining in shortly thereafter.

United States District Court Judge Lenard dealt the City a major legal blow last week, by ruling that the codes governing the special permits for houses of worship were unconstitutional. The proposed agreement now requires officials to rewrite those codes. City officials will also have to attend special classes on religious land use laws.

Mathew D. Staver, Founder and Chairman of Liberty Counsel, commented on the case: "We are pleased to see the city of Hollywood striving to do the right thing in settling the suit and changing its zoning codes. The City should not be infringing upon the religious rights of churches and houses of worship. The First Amendment and the Religious Land Use and Institutionalized Persons Act provide special protection for houses of worship against discriminatory zoning decisions. Public officials cannot use a zoning club to beat down religious organizations. This case makes that message loud and clear."