Do Curtains Loom for Raymond Theater? : Landmarks: After investor defaults on loan, developers again talk about turning the historic venue into offices. But performances continue.

Bad breaks may have finally caught up with the Raymond Theater.

After a series of business reversals, theater investor Gary Folgner has defaulted on a purchase loan. And developers Gary Buchanan and Marc Perkins are once again talking about converting the historic vaudeville and movie palace into an office building.

“Some place along the line, we’ve got to be realistic,” said Buchanan, whose company took back the Raymond from Folgner two weeks ago.

But Folgner, who acquired the Raymond a year ago, and others said the foreclosure was just a temporary setback in their plans to turn the venerable hall at 129 N. Raymond Ave. into a major performance venue.

“Everything’s on hold until we get some details worked out,” Folgner said.

He and the developers were scheduled to meet late last week to talk about refinancing the $2.5-million purchase deal, or bringing in new investors to keep the Raymond from going dark.

Meanwhile, at least for now, the Raymond will continue to operate as a theater. Bob Newhart comedy performances, to be taped for cable television’s Showtime, are scheduled there on Friday and Saturday. A California Musical Theater production of “The Wizard of Oz” is set to run Dec. 4 through 22.

“We’ll continue to operate it as a theater for a while, certainly for the shows that have been contracted for,” Buchanan said.

But he added, “I’m not a theater operator, I’m a real estate developer.”

Folgner, owner of the Coach House nightclub in San Juan Capistrano and the Ventura Theater in Ventura, reopened the Raymond last November after it had been closed for four years. He has spent about $400,000 renovating the theater, which had become dilapidated after years of abandonment.

But the Pasadena Fire Department closed the theater a month later, a few days before a sold-out concert by Grateful Dead guitarist Bob Weir, for failure to meet fire safety regulations.

Fire officials found that fabric used to upholster the theater’s 1,910 seats had not been treated with a fire retardant, as had been claimed by the supplier, United Upholstery of Gardena.

The temporary closure proved costly to Folgner’s plans for the Raymond, he said.

In a lawsuit he subsequently filed against United, Folgner asserted that the shutdown cost him almost $300,000 because of the cancellation of six scheduled concerts, loss of profits from other events and the expense of reupholstering.

“He never recovered from it,” said Folgner’s attorney, Jeffrey Benice. “He was always down hundreds of thousands of dollars because of the loss.”

Folgner said he is also seeking $250,000 in general damages from United, including damage to his reputation and loss of good will.

“In the entertainment business, if you get off on the wrong foot, it’s just a killer,” Benice said. “Artists, obviously, don’t want to be associated with a place that does not have a high degree of credibility and reliability.”

Charles Petlak, head of United, denied any responsibility for Folgner’s troubles.

“We sold them close-out material,” he said. “They wanted to buy something cheap and we sold it to them.”

Petlak said he had never claimed that the material met fire codes.

The faltering economy has also contributed to his problems, Folgner said.

“There’s been a lot of bad luck,” he said. “This is an industry that’s on its butt right now.”

The Raymond opened across from Memorial Park in 1921 as a vaudeville house and, in the 1930s, became one of the San Gabriel Valley’s premier movie palaces. But by the mid-1970s, it was being used, off and on, as a pornographic theater.

Perkins bought the theater in 1978, and a Los Angeles promotion company began running the building as a rock concert venue.

Among the acts that have performed there are Air Supply, Roberta Flack, Phil Collins, Oingo Boingo and Black Flag.

By 1986, Perkins and his partner, Buchanan, were talking about “adaptive reuse”--turning the structure into office space.

But fans of the Raymond, which is on the National Register of Historic Buildings, pressed to have it revived as a theater.

“It’s one of L.A.’s best venues, acoustically and aesthetically,” said Ed Razor, who managed the theater for Folgner. “Its neighborhood is the best, bar none. No matter how wonderful the Greek and the Wiltern are, they’re in horrible neighborhoods.”

After agreeing to buy the Raymond last year, Folgner put on one rock concert and persuaded the California Music Theater to relocate there. But he was unable to maintain payments.

“It was a paper deal,” Buchanan said. “They put down a very small down payment. All of a sudden (last spring), the payments stopped coming. Instead of going through all the procedures of foreclosure, Gary Folgner decided to go ahead and give it (the theater) back to us.”

Managers of the California Music Theater, which staged “Showboat” at the Raymond in September, said they are still planning to use the venue for their 1992 season.

“I don’t think we’ll have any problems maintaining our presence in the building,” California Music Theater technical director Ward Carlisle said. “We’re ready to do shows there four months out of the year. That’s got to be of value to anybody who ends up owning the theater.”

Despite its problems, the Raymond will continue to benefit from its proximity to Old Pasadena, which has become a prime entertainment and dining area in recent years, theater operators and preservationists say.

Buchanan and Perkins have invested heavily in the area.