SEATTLE — Editor's note: The above video previously aired on KING 5 when the lawsuit over the Showbox was first filed. 

The city of Seattle and owners of the Showbox reached an agreement on Tuesday to settle an ongoing lawsuit and determine the future of the building.

Roger Forbes, the owner of the building at 1426 First Avenue which houses the iconic music venue, filed a lawsuit in 2018 after the city council passed an ordinance rezoning the Showbox to be included in the Pike Place Market Historical District.

The move by city councilors stopped plans to demolish the Showbox and put up a 44-story apartment tower in its place by Vancouver, B.C. development company, The Onni Group.

In the lawsuit, attorneys for Forbes claimed the rezone was “illegal” and sought a repeal of the ordinance and $40 million in damages and attorney fees.

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Seattle Communications Director Dan Nolte announced Tuesday the city and Showbox owner reached a settlement agreement in the amount of $915,000 to cover attorney fees and other costs. As part of the deal, within thirty days, the parties will ask King County Superior Court Judge Patrick Oishi to enter final judgment in the case voiding the Historical District ordinances.

Earlier this year, supporters of the Showbox turned to Seattle's Landmarks Preservation Board to help save the music venue, which originally opened in 1939. 

In July, the Showbox was granted landmark status. 

Tuesday’s agreement provides an option for a third-party to purchase the property and the rights to the Showbox name for $41.4 million if the Landmarks Preservation Board recommends no controls be imposed on the property and the City Council imposes none.

“The focus of this situation is now appropriately with the Landmarks Preservation Board," said Seattle City Attorney Pete Holmes. "I weighed the likelihood of success appealing a case that is now largely superfluous against a potential judgment costing the City tens of millions of dollars. When presented with a resolution that costs us only a fraction of that potential judgment and that retains an option for a third-party organization like Historic Seattle to lead an effort to purchase the building in the event no landmark controls are imposed, this wasn’t a difficult decision to make.”

RELATED: The Showbox music venue gets landmark status in Seattle

Aaron Pickus, representing 1426 First Avenue LLC, said “Our settlement with the City of Seattle allows for a return to a consistent and fair application of the city’s regulations governing 1426 First Avenue. We are also pleased that our settlement with the City of Seattle includes a contingent option for a third-party allied with the City to potentially purchase the property for $41.4 million –the owner has always been open to consider any serious purchaser that offers fair market-value.”

The city has until March 1, 2020 to identify a buyer for the Showbox who would then have 30 days to reach a purchase agreement.