2801 Magazine St.

A rendering of the facade of a Chipotle restaurant proposed to be built at 2801 Magazine St. in the Garden District. The site was previously occupied by a RadioShack.

Rendering: Dungan Design Group LLC

Chipotle, we hardly knew ye.

Two months after the City Council gave it the go-ahead, the Denver-based Chipotle Mexican Grill chain has scrapped plans to open a restaurant in a vacant Magazine Street storefront, according to a lawsuit filed this week in federal court by the owner of the proposed restaurant site.

The Chipotle restaurant was slated to take up about 2,400 square feet in a one-story building at 2801 Magazine St., part of a block-long strip mall near Washington Avenue in the Garden District. 

In October, New Orleans city planners OK'd a request for a conditional-use permit for the restaurant, which came over the objections of some Garden District neighbors. At the time, some neighbors, as well as the Garden District Association, viewed the proposal as a national chain infringing upon a popular shopping area that's prized for its local atmosphere.

Additionally, the residents' group disagreed with how the city had classified the restaurant's zoning. They contended it should have been considered as a fast-food outlet rather than a restaurant, which would subject it to different zoning rules.

The city's Department of Safety and Permits designated the Chipotle outlet as a restaurant, since employees would be busing tables and menu items for the most part were not pre-made.

Ahead of a City Council vote on the zoning issue, property owner 2801 Magazine Street LLC and the Garden District Association came to agreement to help address some lingering issues, according to the lawsuit.

"After staunch opposition from neighbors" over Chipotle's plans, the lawsuit notes, the property owner entered into a "good-neighbor agreement" with the neighborhood group in which it agreed that, once Chipotle's lease expired, "no portion" of the center would be used as a restaurant.

That agreement may pose a problem for the property owner now that Chipotle has said it will not open a restaurant at the site, according to the lawsuit.

The lawsuit contends the agreement with the neighbors "substantially and negatively affects" the property owner's ability to move ahead with finding a new tenant, and that the pact "decreases both the property's future rental value and by extension the fair market value of the center."

The limited-liability company that owns the seven-unit shopping center is represented by Phelps Dunbar attorney Mark Fullmer.

Chipotle's lease, reached in July, was for 10 years, with a base rent of $9,138 per month for the first five years and $10,052 per month for the second five years, court filings show.

On March 8, Chipotle reiterated to the property owners that it was no longer moving ahead with its plans. In response, the owners demanded an accelerated rent payment of $1.2 million, expenses of at least $180,030 and damages.

David Reeves, a Denver attorney representing Chipotle, did not respond to a call Tuesday.

Shelley Landrieu, executive director of the Garden District Association, declined comment, saying she had just heard about the lawsuit.

The same complex has had other commercial tenants, including a Floor & Decor, a Benjamin Moore paint store, Bedding Plus and Starbucks. Nearby properties along Magazine include a gas station, several small restaurants, a furniture store, some other small stores and residences.

With a menu centered on burritos, tacos, burrito bowls and salads, Chipotle Mexican Grill has more than 2,300 restaurants, including in Harahan, Metairie and Slidell. It's unclear what the chain's future plans are for New Orleans.

Follow Richard Thompson on Twitter, @rthompsonMSY.