Costa Mesa to Cut Funds to Theater : Finances: Agreement between the City Council and Civic Playhouse gradually lowers--and may even eliminate--support.

Annual city funding of the Costa Mesa Civic Playhouse will be lowered gradually--and perhaps eliminated--under an agreement reached Monday between the City Council and the community theater group.

Started as part of the city’s Recreation Department 27 years ago, the Playhouse occupied city-leased property for free until January when, after a general review of city budgetary and insurance concerns, the council started charging the group rent. But the city continues to give the theater an annual $35,000 subsidy and $20,000 arts grant.

The plan--passed by a 3-1 vote Monday night, with Councilwoman Sandra L. Genis opposed--provides for the subsidy to be reduced by $5,000 each year through fiscal 1997-98, when it would be eliminated. The Playhouse will be able to keep applying for city grants, however.

Genis had proposed that the city, which already has authority to review content of the plays, go a step further and make it illegal for the plays to “denigrate or harass” people on the basis of race, religion, sex, etc. Her motion stemmed from a furor over the Playhouse’s production last year of Christopher Durang’s “Sister Mary Ignatius Explains It All for You,” to which some residents objected because it satirized Roman Catholic dogma.

Mayor Mary Hornbuckle and Councilman Peter F. Buffa--who have asserted that Monday’s budget-cutting action is not related to the “Ignatius” furor--opposed Genis’ proposal, citing the theater’s long history and agreeing that one “poor choice” of a production does not erase the recognition the theater has brought to Costa Mesa over the years. Buffa further noted that there could be problems determining who would decide if a work is offensive.

Members of the arts community at Monday’s meeting generally were pleased with the agreement, though some were concerned that the theater wouldn’t be able to find other funding sources. “I hope the city would reconsider the agreement three years down the road if the playhouse has trouble with (its) obligations,” said Alice Leggett, a member of the city’s Cultural Arts Committee and liaison to the playhouse.

In other action Monday night, the City Council agreed that an application for an entertainment permit at the Blue Marble Coffeehouse, 1907 Harbor Blvd., may be resubmitted to the Planning Commission.

The Planning Commission had denied the permit because the coffeehouse offers only 12 parking spaces. But since then, Blue Marble owners have received permission from owners of nearby businesses for use of their parking spaces.

The coffeehouse, which presents poetry and performance art, wants to add acoustic music performances.