With the redesign executed by the Detroit-based Howard Crane's company,[4] the 782-seat Allen's Bloor Theatre became one of Toronto's (a city of some 200,000 inhabitants at the time)[5] most luxurious suburban movie houses.

[7] Following a period of almost ten years during which the property remained vacant, in 1967, the venue was purchased for Can$129,000 by local entrepreneur Ed Silverberg who then invested further Can$250,000 in order to convert it into a cabaret named the Blue Orchid.

Mr. Lee, owner of a nearby Stop & Go corner store on Bathurst and Harbord, who had become interested in the music venue concept through The Cameron House and the rest of the 1980s Queen West scene.

[2] The venue's early live concert booking policy—bringing fledgling local rock bands plus emerging international (mostly British and American) indie acts—established a formula that would be continued throughout the decades that followed.

[2] The Tragically Hip—five youngsters in their early-to-mid-20s from nearby Kingston gigging locally in bars throughout Ontario with no releases yet—played Lee's Palace in late October 1986, years before becoming a best-selling and celebrated musical act in Canada.

[9][10] Supporting their second album and making their Toronto debut with a lineup featuring the band's twenty-four-year-old founding member and original guitarist Hillel Slovak who would die of drug overdose eighteen months later, the show—opened by fellow Southern California punk rockers T.S.O.L.

and Thelonious Monster and closed with the Peppers infamous and soon-to-become signature trademark 'socks-on-cocks' stage performance during an encore of Jimi Hendrix's "Fire"—marked the first instance of a future globally-known musical act playing Lee's Palace.