Pasadena Playhouse Awaits a Crucial Vote : Theater: City Council is expected to approve a $200,000 loan to keep the facility going while it’s restructuring. The cash will allow ‘Heartbeats’ to open.

With the historic Pasadena Playhouse in financial straits, the Pasadena City Council will vote tonight on whether to loan $200,000 to the theater company.

If approved, as expected, the cash will ensure that the musical “Heartbeats” opens as planned on Sunday and will keep the Playhouse going until subscription renewals for the soon-to-be-announced winter/spring season begin to arrive later this month.

The Playhouse already has received half of the loan on an emergency basis, in an action authorized by Pasadena City Manager Philip A. Hawkey in response to actions taken by the City Council in a closed session on June 27. Hawkey and other city officials praised the Playhouse in glowing terms last week, emphasizing its importance to their city and especially to a 16-block redevelopment area to be called the Playhouse District.

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Playhouse owner David Houk said he hopes the subscriber base at the Playhouse will return to 20,000 from the current 16,000 by the time “Heartbeats” closes on Aug. 21. In conjunction with cost cutbacks--44 out of 130 employees of Houk’s management company, Theatre Corp. of America, were recently laid off--this anticipated growth could restore a measure of stability to the Playhouse. A new restaurant, Critixx, which is renting space on the north side of the Playhouse, may provide additional revenue and customers.

In his loan request, Houk blamed the current crisis on reduced ticket sales because of the recession and the Jan. 17 earthquake.

“I have no complaints about the shows” that have been presented recently, he added in an interview. He acknowledged that the rapid expansion of his company’s touring programs contributed to the cash crunch--before most of the tours were abruptly aborted in May--but he expressed confidence that amortizing production costs through tours will eventually pay off.

Houk has long steered clear of government assistance. For now, “he changed his mind,” said city manager Hawkey. “I admire his vision. But that vision has cost him millions of dollars. His theory has yet to be proven.”

But Houk denied that he had changed his mind. He’s opposed to government grants, but not necessarily to loans, he said. He wouldn’t say what circumstances might induce him to ask for further government aid.

In exchange for its 7.5%-interest loan--on which payments are deferred until Jan. 1--the city gets a fourth deed of trust on the Playhouse property. The city will supervise the spending of its money via Rick Barr, manager of the Pasadena Civic Auditorium. The city agency that operates the Civic Auditorium is providing half of the loan money, with the other half coming from the Downtown Redevelopment Project.

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Looking beyond the bandage provided by the city loan, Houk said the long-term solution to the Playhouse’s financial woes lies in a restructuring of the complicated legal relationship between the Playhouse and the city. City officials are working on this project now, confirmed Hawkey, who predicted that the process would take at least six months.

The restructuring would enable the revenues from Playhouse productions to go to Houk’s management company, Theatre Corp. of America, rather than first passing through the nonprofit Pasadena Playhouse State Theatre organization--which would become simply a support group. Houk said this arrangement would clarify the profit/nonprofit mix under which the Playhouse operates and enable him to attract more private investment in the Theatre Corp.

In the meantime, “every show will have to make money,” Hawkey said.

“We’re always in that position,” Houk said, “but it’s impossible to do. That’s why I need to restructure. We’re hanging on until I can accomplish that.”

After “Heartbeats,” the next show scheduled to face this kind of do-or-die challenge has been changed. L.A.-based Mary Hanes’ “The Crimson Thread”--a story of three generations of Irish immigrant sisters--will replace “The Titans,” a new play about the Kennedy family, in the season’s Sept. 9-Oct. 23 slot.

Playhouse Executive Director Lars Hansen said the switch isn’t primarily for cost-cutting reasons, although “The Crimson Thread” will feature a cast of three, compared to the five required for “The Titans.” Rather, Hansen felt “The Titans” wasn’t ready and that it might have been inappropriate to present it so soon after the death of Jacqueline Kennedy Onassis.