The Real Deal New York

Off-Broadway theaters displaced by new development

By Gabby Warshawer | October 26, 2007 01:29PM

The curtain is falling on Off-Broadway theaters.

This autumn the Lamb’s Theatre Company was evicted from the Stanford White-designed 130 East 44th Street, where they had rented space since 1978. Hampshire Hotels Group is converting the building, which originally housed a theater club whose membership rolls included Mark Twain, into a new hotel.

The Lamb’s is one of several Manhattan theaters and theater companies that have lately fallen victim to the residential, retail and hotel development boom, cutting into the number of venues in the nation’s stage capital.

Other shuttered theaters and displaced companies include the Upper West Side’s Promenade Theater; the East Village’s Variety Arts Theatre and the Century Center for the Performing Arts; the Theater District’s New Perspectives Theatre Company; and the West Village’s Perry Street Theatre.

All but the nonprofit New Perspectives were commercial operations, which industry experts say is the segment of the theater world hit hardest by loss of space.

“What’s significant about the recent closings is that the Century, Promenade and Variety Arts were all reasonably large commercial Off-Broadway theaters, so for that segment of the market it’s a big hit,” said Mark Rossier, director of development and marketing for A.R.T./New York, Off-Broadway’s service and advocacy organization. “There aren’t a lot of those theaters in the city.”

A mixture of new residential and commercial real estate is replacing the theaters.

The Toll Brothers’ 21-story residential condominium at 110 Third Avenue, where apartments are selling for between $840,000 and $2.3 million, is rising on the site of the former Variety Arts Theatre.

A few blocks north, the Century Center for the Performing Arts at 111 East 15th Street gave way in August to a production studio for Trinity Broadcasting Network, the world’s largest religious television network, according to Cushman & Wakefield, which handled the transaction.

On the Upper West Side, cosmetics chain Sephora recently leased the space at 2162 Broadway that formerly housed the Promenade Theater.

According to Faith Hope Consolo, chairman of the retail leasing and sales division for Prudential Douglas Elliman, theaters easily and effectively convert to retail space.

“Theaters make for great retail space because of their large floor plates, and since we have a trend right now of bigger and supposedly better, they’re very attractive,” says Consolo. “Theaters also pay very, very little in rent, and owners and landlords realize they can get much more.”

In September, 31 Perry Street’s owners realized they could get “much more” by selling their building, where the Perry Street Theatre rented space.

“We had a great deal in rent at Perry Street, and the landlord recognized that they were displacing a theater when they sold the building,” said David Elliott, director of the Perry Street Theatre, which is currently producing “An Oak Tree” at the Barrow Street Theatre. “I think they felt bad about it, but they also wanted to make money.”

Elliott says that besides the evictions of numerous existing theater companies, sky-high real estate values make it much harder for new theaters to open.

“It would be difficult right now to find a space brand new if you’re a new theater company unless you have a lot of money,” he says. “Landlords have a great appreciation of what their spaces are worth. If you’re going to go into theater, you have to have deep pockets. The average 99-seat theater in Downtown is fetching $8,000 to $12,000 a month in rent.”

Rossier of A.R.T./New York concurs that it’s a particularly difficult climate for new theaters.

“There have been some new theaters, but for the most part all the companies are treading water,” he says. “It’s been that way for the past 10 years or so.”

For Melody Brooks of New Perspectives Theatre, which closed last year to make way for the 39-story Platinum condominium at 247 West 46th Street, the time, effort and money that it takes to build a community theater no longer seems worthwhile.

“I don’t know whether I’m interested in finding theater space again,” says Brooks. “After doing this for 15 years 24-7, the idea of trying to grow into an Off-Broadway community theater is not appealing.”

Brooks says the cost of dealing with an entrenched union culture makes the New York theater business especially difficult.

“But real estate becomes part of the issue when the city doesn’t recognize that theaters add value to the community,” she says. “All these residential developers get tax breaks, yet we see the middle class being pushed out of Manhattan. The Theater District used to truly be a community, and it’s not anymore.”

Last month “Little Building,” a new musical about a 28-story building that falls in love with a real estate developer, premiered at Williamsburg’s Galapagos Art Space. It was appropriate staging because increasing real estate values and their affect on the city’s artistic community are a concern of Robert Elmes, Galapagos’ director.

“The situation for creative New York is beginning to atrophy,” says Elmes. “What we need to ask now is, when does a creative economy begin to calcify? People come to New York because of their perceived access to culture. And if emerging and mid-level artists aren’t here, the culture is going to calcify.”

Last year, Galapagos’ landlord increased the rent by $10,000 a month. The venue coped with the hike by doubling its programming; it now hosts 140 shows a month.

Elmes said New York’s lack of affordable housing also discourages the artistic community. He currently plans to expand Galapagos by opening a performance space in Berlin. Elmes says the German capital’s “low threshold of entry” — cheap rents and plenty of space for a thriving arts and culture scene — is reminiscent of Williamsburg in the late 1980s.

He said he believes New York City should provide more financial incentives for developers to include cultural establishments in new construction.

“The white-hot real estate industry that’s making the cultural institutions evaporate is also what can save those institutions,” he says. “Basically, the city should marry cultural institutions and developers — with a shotgun if need be. The city needs to make it attractive for developers to give space to cultural institutions in their buildings.”

Some developers and arts organizations have paired up successfully. Last year the Related Companies, looking to maximize a building planned for 440 West 42nd Street, brought in Cirque du Soleil to qualify for a “theater bonus” that allowed it to build taller. Critics, however, said the bonus was intended for smaller Off-Broadway companies, and the city Planning Department ultimately denied the bonus.

The city does currently provide millions of dollars in funding every year to nonprofit theaters. City grants allowed the Here Arts Center — known for premiering Obie winners like “The Vagina Monologues” and providing resources to thousands of resident artists — to purchase the performance and rehearsal space they’d been in since 1993.

The Here story is a bright counterpoint to the many recent closings. When the building that houses Here went condo, its owners said the theater could rent space for a couple more years.

“We had really good lawyers who made sure that we didn’t get thrown out,” says Kristin Marting, Here’s executive director. “It changed everything for us. We were paying $21,000 in rent; now we’re paying $6,500 for mortgage and $2,000 in common charges.”

Marting says most of the financing for the 9,000-square-foot theater’s $1.7 million price tag came from city grants. While Marting says owning the space has vastly improved the theater’s financial picture and brought stability to Here, she believes the overall outlook for New York theater is hardly rosy.

“It’s a pretty bleak situation for theater in New York, because more and more community-based organizations are moving away from the center of things,” says Marting. “We thought it was really important for us to stay where we are, since Soho has become one big shopping mall.”

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