When the vice mayor of Hollywood signed an agreement ending an impassioned five-year dispute between the city and an Orthodox Jewish synagogue, fireworks were going off outside.

The celebration outside was for the Fourth of July, but it might as well had been to mark the end of one of the most controversial issues in the city’s history.

Vice Mayor Fran Russo signed a settlement agreement with Chabad Lubavitch, which was suing in a federal civil court for discrimination after the city ordered it to leave its neighborhood location.

U.S. District Court Judge Joan Lenard, who must approve the settlement, set a hearing for today in Miami to review it. Attorneys speculate she might order a public hearing before officially signing off on the agreement.

While city officials will not have to admit any wrongdoing, the agreement is a major victory for Chabad, which sparked controversy after it moved into two Hollywood Hills homes in 1999.

Under the agreement, Chabad will get $2 million from the city’s insurance company and will be allowed to stay in the same neighborhood the city tried to oust it from. Chabad will also be allowed to expand within a two-block boundary without having to seek a special permit from the city.

The city will now have to rewrite part of its zoning laws, which were recently declared unconstitutional and were at the heart of the discrimination lawsuit.

City officials used the codes to evict Chabad, saying the synagogue did not comply. But Chabad and the U.S. Department of Justice responded with a joint lawsuit saying the city was allowing at least 13 other religious groups to operate in nearby residential neighborhoods, including one at the home of a woman who claims the Virgin Mary appears to her each month.

The Chabad group also alleged Commissioner Sal Oliveri went on a personal crusade to evict them, ordering police and code enforcement officials to crack down on the synagogue on a daily basis.

Under the agreement, Chabad has agreed to drop its lawsuit against the city and Oliveri, who stood to lose up to $1 million from his own pockets.

The final agreement is virtually identical to the settlement city officials offered the Chabad last week.

According to the settlement, Chabad will be allowed to stay at its current location, on 2215 and 2221 N. 46nd Ave. in Hollywood Hills.

The group initially did not tell anyone their intentions of converting one of the homes into a synagogue. Neighbors soon complained about noise and parking violations.

At a special city council meeting last week, neighbors urged commissioners not to settle. But attorneys hired to represent the city’s insurance company and Oliveri pointed to a number of legal setbacks earlier in the year and insisted on cutting its losses.

Commissioners voted 5-1 last week to offer a settlement, with Mayor Mara Giulianti the sole objector. Oliveri did not vote last week, but he did vote to settle in the past.

Earlier in the case, Lenard ruled the codes on special permits were too vague and the process used by city commissioners to reject them was fodder for abuse.

If the case had gone to trial, Chabad would have had to prove the city’s efforts caused them millions of dollars in damages.

Chabad was permitted to continue operating while the case made its way in court, but Rabbi Joseph Korf argued the case left the synagogue with an uncertain future. That caused membership to dwindle, along with monetary pledges to help pay for expansion.

Korf said he was glad to see a settlement, but expects more conflict as he seeks to expand.

“It’s a very big sense of relief, but at the same time, I am still worried about what is going to happen in the future,” he said. “As much as I’ve tried to wish this is over, it doesn’t go away.”

Korf reiterated his offer to reconcile with his neighbors.

But Lisa Self, who lives directly behind Chabad, said, “They’ve had five years to prove they are good neighbors, and they still haven’t. Why should I believe anything he says?”

City Attorney Dan Abbott told commissioners last week he fears the settlement will now spark a number of lawsuits from residents who say their rights to the enjoyment of their homes have been violated.

On Wednesday, only Commissioner Keith Wasserstrom mentioned the settlement during the city’s daylong meeting.

“I really hope we can put this behind us and that we now have a new era in Hollywood,” he said.

Ihosvani Rodriguez can be reached at or 954-385-7908.