Laguna Beach- The Boom Boom Room, a gay bar that became an icon in Laguna Beach and beyond, won a reprieve this week after the new owner agreed to extend its lease rather than close it as planned next month.

“It’s like Christmas in August,” said Fred Karger, who has campaigned to keep the bar open. “Now that it’s staying open, I think the chances are greater that it will remain open permanently.”

Steven Udvar-Hazy, an aircraft-leasing mogul from Beverly Hills, bought the Coast Inn and adjoining Boom Boom Room last year in a deal worth nearly $13 million. He was unavailable for comment Thursday, but an assistant said the new lease was for 11 months.

In a recent interview with The Times, the billionaire said he planned on building an upscale hotel on South Coast Highway where the inn and bar now stand. The older, more raffish Boom Boom Room, he said, didn’t seem “compatible” with that vision.

Former owners Patrick O’Loughlin and James Marchese, who still run the bar and hotel, have retained the legal rights to the name Boom Boom Room and said they hope to open a new Boom elsewhere.

“We are looking for a place in Southern California but not in Laguna Beach,” O’Loughlin said.

He said the new lease, finalized Monday, made economic sense for the new owner, who needs time to get his plans together and obtain permits before beginning construction.

Karger began efforts to save the bar (www.savetheboom.com) in May to protect what he and others believe is a historic piece of Laguna Beach history. The Coast Inn and Boom Boom Room, built in 1927, became a magnet for gays the world over in the mid-’70s.

But in recent years, as the city’s median home price grew to $1.5 million, its gay population dwindled. O’Loughlin and Marchese said they sold the bar when it no longer made economic sense to keep it open.

Robert Gentry, a former mayor and the nation’s first openly gay mayor, said the city now has time to decide how much it supports the gay community.

“The Boom is a very strong symbol of the role of the gay community in Laguna Beach history, in its current status and in its future,” he said. “I think bringing people together to talk about the role of the gay community creates a level of awareness and political strength that motivates elected officials.”

Karger said he would present to community leaders after Labor Day a petition with more than 5,000 signatures asking to keep the bar open. Whether that will persuade them to join the fight remains in question.

Mayor Steve Dicterow said the bar’s new lease was “ecstatically good news.”

“I think it’s a long-standing institution in Laguna Beach and just shows that private people can work out their own problems,” he said. But the mayor said he would not pressure Udvar-Hazy to keep the place open.

Councilwoman Toni Iseman said the town is not just losing gays; it is losing schoolteachers, professors and artists because of housing costs. Still, she said, the city would give the Boom Boom Room “moral support.”

“It’s another of our icons that is being threatened, but on a practical level, private property is private property, and it’s really up to the new owner,” she said.

She said that if Udvar-Hazy builds a swanky hotel, it too could be a gay gathering point: “If this new place is filled with gays, I doubt the owner will mind.”