Higher Rents--the Scene-Stealer : Will costs bring down the curtain on local small theaters?

Theatergoers who have ventured outside the familiar Hollywood-to-Santa Monica axis into the San Fernando Valley may remember a pleasant little playhouse called Room for Theatre.

Tucked away in an upscale shopping mall in Studio City, it offered ample parking, plenty of restaurants within walking distance and a repertoire of civilized comedies from the 1920s through the 1940s, such as Elmer Rice’s “Dream Girl” and Philip Barry’s “Holiday.” Patrons, developed through a subscription program, were loyal and growing.

One of the reasons they kept coming back was the hospitality: entering a lobby full of period furniture, a visitor was greeted by one or more of Room for Theatre’s three artistic directors, Sylvia Walden, Dolores Mann and Beverly Sanders. It was a happy home.

Today, that home is vacant. Through a combination of factors, most fatally that of rising rents, Walden, Mann and Sanders closed the doors on their cozy, elegant space a few months ago. There is still a “Room for Theatre” on paper as a nonprofit group; but there is no room for the group.

Some observers of the local scene, including theater operators and producers, think that Room for Theatre’s fate may be a harbinger of things to come.

As Los Angeles real estate values continue to escalate at a juggernaut pace, as such essential overhead costs as liability insurance rise, and as new costs like actors’ wages are added to the expense ledger, these observers worry for the survivability of intimate theater.

These theaters have neither the property holdings of the Shubert and Nederlander theater organizations, nor the public and private support of such institutions as the Mark Taper Forum and the Los Angeles Theatre Center. A lot of them, says Joseph Stern, artistic director of Actors for Themselves and owner of the Matrix Theatre, are mom-and-pop operations.

For Room for Theatre’s threesome, it was a heartbreaking job.

“We had a great break on the rent at first,” says Walden, almost wistfully. “Five years ago, it was $1,000 a month. Then, it went up and up and up, until it reached $2,475 last year.

“Our landlord gave us a 50% reduction. It was a one-time, one-year deal, but without that we would have had to close.”

Finally, in August, the notice came: The new lease called for a $3,600 rent, which, at $1.50 per square foot, is a fair market rate for the area, according to Walden.

“You could say that the landlord had subsidized us, but I suppose there had to be an end to it,” she says. “Still, there was no way on God’s green earth we could pay that (rent) as an Equity Waiver house.”

Ironically, Room for Theatre closed just before the new Actors’ Equity plan forcing small theaters to pay their actors at least $5 per show went into effect Oct. 3. “One way or the other,” Walden says, “we would have closed. Our repertoire of large-cast comedies would have killed us under the new plan.”

Actors’ wages aside, the cost of living for people who make theater may be reaching a make-or-break point.

“Let me put it this way,” says Susan Loewenberg, producing director of L.A. Theatre Works, “if I’m stuck in this situation much longer, you won’t see me in the theater. I mean, I’m not a masochist.”

Laura Zucker, co-producer with Allan Miller at the Back Alley Theatre, reports that their theater is fast coming to a crossroads: “Either we find a new home, or we might become a touring company. Our lease is up in 1989, so we’re out one way or the other.”

However, the death knell for L.A. theater has been sounded before. When, in 1976, Actors Equity raised the weekly salary rate allowed by the now-extinct Hollywood Area Contract by 40%, some said it would forever finish off productions in mid-size houses of 199 seats and up.

And when “The Hasty Heart” moved from the Waiver-sized Cast Theatre to the Ahmanson Theatre in 1982, dropping four of the original cast, reaction was sharp. Stern wrote in a letter to The Times that the producers’ “conduct may be the beginning of the end of Waiver theater in Los Angeles.”

Today the few mid-sized houses still with a marquee out front are frequently dark, and Waiver has indeed ended.

But smaller theaters are plentiful--at some counts, 140 in the Los Angeles area. Do the dire predictions really hold up?

Scott Kelman, artistic director of Pipeline, thinks they do. “It isn’t just rents, either,” says Kelman, who vacated the Wallenboyd, a two-theater space, more than a month ago. By Kelman’s account--confirmed by several producers--liability insurance, paid by theaters to cover audience injuries and accidents, skyrocketed over three years ago. “When we started here in 1982, the going price was $400. This year, it hit almost $4,000. It happened for most people in town.”

Such hidden costs, producers like the Cast Theatre’s Ted Schmitt insist, make an already unprofitable situation even less so.

There are four sets of players in this increasingly risky game: nonprofit theateroperators--almost all of them, like Schmitt and the Odyssey Theatre’s Ron Sossi, on a rental lease--who also produce; independent producers who shop for a home for their plays; groups or individuals--some owners, some tenants--who operate theaters, rarely if ever produce plays, and rent to independent producers; and the landlords.

An outside observer might suppose that, for theater operators socked with high rents, the enemy is the landlord. But there’s no consensus on this point.

Sossi, for instance, might be expected to feel embittered against the owner of the Odyssey Theatre’s building: he has reportedly been trying to sell it for six months. A new owner would likely ask a loss-leader like Sossi to vacate.

But as far as Sossi is concerned, “our landlord is OK. He isn’t gouging us. The guy who runs the doughnut shop across the street from us is paying much more than we are.

“The real market rates are high. We’ve been in a dog-eat-dog situation for so long, that it’s been popular to pick out a bad guy. For a while, when Equity moved to rescind the Waiver, the bad guy was the producer. Now, the bad guy is the landlord. But there aren’t any bad guys. It’s the situation, the whole market, that’s tough.”

The Matrix’s Joseph Stern holds the view that landlords are making a windfall profit at the expense of everyone else. He is himself a landlord, he says, and should know.

“The signs were there in the ‘70s, when the Waiver began and created this overnight sellers’ market,” recalls Stern.

“Suddenly, all these worthless holes-in-the-wall had value as little theaters. Anyone who had a space could rent it for whatever they wanted. A lot of them were leaseholders, and their asking price was way out of whack with the figure they were paying landlords.

“Then, landlords found out about the leaseholders’ game, raised the rents, and prices have gone nowhere but up since.”

The inflationary spiral began early, as Stern remembers, and affected even nonprofits like the Odyssey. In order to do David Storey’s “The Changing Room” there in 1976, “we had to pay $400 a week for an 80-seat house--the same price I had paid a year earlier for a 200-seat house.”

For operating producers, the creative impulse isn’t restricted to the work on stage. It extends to the unending project of, as the Back Alley’s Zucker puts it, “staying in the red as little as possible.”

“Everybody has a deal,” says Schmitt, referring to the trade-offs operators make with the leaseholder or landlord to cut costs.

For instance, in 1985, members of the Back Alley’s board of directors purchased the building in order to “buy us time,” according to Zucker. Having friends as landlords helped, and it gave the theater room to make long-term plans.

Deals, however, don’t lessen the biggest dilemma facing the Pacific Theatre Ensemble, and many other struggling operations. Walden calls it “the Catch-22 of L.A. theater”: building audiences in low-rent--and high-crime--districts.

Walden recalls that when she and her partners rented a Vermont Avenue space, her car was broken into twice in two weeks.

“My heart goes out to theaters that have to be in scary parts of town,” she says, “because I know I wouldn’t go there alone. Creating the possibilities for theaters to be in a good and affordable area is the No. 1 issue.”

Even on the relatively safe Westside, the Odyssey’s Sossi builds matinees into performance schedules in order to accommodate one of L.A. theater’s most faithful constituencies: the elderly. “They just won’t come here at night,” he says.

A traditional way of covering costs is for the nonprofit stages to sub-rent to independent producers. It is, however, a two-edged sword.

Sub-renting to an unsuccessful independent production risks losing a theater’s carefully cultivated audience. Walden: “No matter how often you tell your subscribers that the show isn’t yours, it doesn’t register and they don’t come back.” Zucker: “For that reason, (the Back Alley hasn’t) done it for years.”

“The parties most hurt by the rise in rents and the essential costs,” says Schmitt, “are the ones trying to institutionalize their theaters on an on-going basis,” such as Schmitt’s own Cast.

“The next hardest hit,” he adds, “are the independent producers shopping for a temporary home, who don’t want to pay the overhead. Instead, they pay for it in rent and insurance.”

Independents like David Steen, whose “A Gift From Heaven” is at the Chamber Theatre, referred to their theater shopping hunts with words like shocking and outrageous.

“I couldn’t believe the numbers I was hearing from rental houses in places like Hollywood and Burbank,” Steen says. “They were expensive and dirty and without parking”--a key theater perk.

The lesson one producer draws from renting one of the two Tiffany Theatres (among the pricier in town at more than $2,000) is that she would never go there again.

“The benefits from a big marquee on Sunset Boulevard and an industry audience haven’t paid off--not for the costs,” which include carrying your own insurance.

But, responds Tiffany executive director Laura Holt, former owner of the property and now a leaseholder, this is a rarity.

“I have seven or eight shows that want to come in at any given time. This place is the first choice of a lot of producers, because it’s a prestige venue with state-of-the-art facilities for small theater.”

No firm cases of rental theaters exploiting stage companies could be identified for this article, but Stern says some operators are “out-and-out slumlords.” If so, it’s news to Armina Shepard, who runs the Richmond Shepard theaters.

“We’re squeaking by, so I have to hold down a full-time job in artists management,” she says.

Perhaps the most pragmatic alternative to squeaking by is having the theater operator become co-producer of the rental show.

“We provide producers a facility, insurance, box-office service,” says the Theatre/Theater’s Jeff Murray, “they put up the show, pay for ads, and we share producing credit and split the take at the door.”

But in some hands, says Scott Kelman, now doing co-productions at the Odyssey, “this is just getting glory for having a place to rent.”

Another dollar-saver is moving on campus. Theatre 40 (at Beverly Hills High School), the 21st Street Theatre (Windward School in West Los Angeles) and International City Theatre (at Long Beach City College) exist this way, with sometimes mixed results.

Arts-oriented Windward School is so busy with its own shows that 21st Street Theatre can only produce there during summer. But their under-$300 rent, plus their “good relationship” with the school, says 21st Street’s Anne Davis, keeps them there.

Other hitches at schools include being perceived as a non-professional theater and not being able to do strongly adult material--although Theatre 40 artistic committee member Carol King says that a mere notice to school administrators was enough to do “Salonika” with nudity.

The last resort is functioning as a production office, and renting a theater only when there’s a show to put in it. Several nonprofit operators have flirted with the idea.

“That’s how Susan Loewenberg runs L.A. Theatre Works,” says Stages’ owner and artistic director Paul Verdier. “Maybe she’s got the right idea. Right now, the overhead is killing me.”

Loewenberg, though, thinks she probably made the wrong decision. “I’m sorry I didn’t figure out 10 years ago to buy a building. (Matrix owner) Joe Stern makes his real estate work for him.”

She added, however, that until major endowment money comes forth--private funds and those promised by the newly approved L.A. Endowment for the Arts--none of the financial problems will be solved.

Until then, Loewenberg says, “There won’t be a real L.A. theater community. Not when 98% of the people don’t make a living at it.”