Financial woes finally caught up to one of area's most esteemed midsize nonprofit theaters, the Pasadena Playhouse, which announced that it is closing its doors on February 7 following the final performance of Camelot. Thirty-seven employees will be laid off.

This closure of the local theater beacon not only sends a shudder across Southern California arts institutions, it also betrays the trust of season subscribers, who have paid for 2010's remaining five plays. This would appear to be a death knell to the idea of season subscriptions. Trusting patrons paid their rent in advance and were evicted anyway. Word will spread, reinforcing the trend toward single-ticket sales at other theaters.

Artistic Director Sheldon Epps said on Saturday that he and his board of directors will seek legal advice on the advantages and disadvantages of declaring bankruptcy.

“I believe that a fiscal structure will be put back in place, at a point to be determined,” Epps says, who seems determined  . . .  to a point.

A $2 million debt Epps inherited when he took over the theater in 1997 was whittled down to approximately $1.5 million this year, but it was a boulder that Epps was trying, like Sisyphus, to push up Mount Wilson.

Under Epps' helm, the quality of the programming rose significantly, with new musicals capable of adding nonwhite audiences, and box office receipts also rose. (Sharleen Cooper Cohen's bio-musical about Lena Horne, Stormy Weather, broke the theater's box office records in 2007.) Nonetheless, it wasn't enough: Epps was struggling with a drop in donor revenue from the 2008 recession, in conjunction with the debt burden.

He says that funding organizations wanted to give grant monies to the Pasadena Playhouse, but the theater's debt violated the funders' guidelines. Epps adds that the recession was used as an excuse by arts donors to curtail their giving, sending the theater into a tailspin.

The world of 2010 is one of crisis for the nonprofit sector nationwide. According to last Sunday's Wall Street Journal, “The once-booming nonprofit sector is in the midst of a shakeout, leaving many Americans without services and culling weak groups from the strong. Hit by a drop in donations and government funding in the wake of a deep recession, nonprofits — from arts councils to food banks — are undergoing a painful restructuring, including mergers, acquisitions, collaborations, cutbacks and closings.”

The Pasadena Playhouse established its reputation and influence early, under the watch of actor-director-manager Gilmore Brown. It was wealthy Pasadena residents who, in the early 1920s, were largely responsible for funding construction of a swanky new legit theater, designed by Elmer Grey (who also designed Caltech) on El Molino Avenue. It was then known as the Pasadena Community Playhouse, and Brown was invited to run the place in 1924. He launched his first season in 1925.

In 1928 Brown also created an on-site acting conservatory, the Pasadena Playhouse College of Theatre Arts. The acting school became known as “the star machine,” with students including Jamie Farr, Gene Hackman, Dustin Hoffman, William Holden, Rue McClanahan and Sally Struthers. In a recent interview, Leonard Nimoy told the Weekly that the reputation of the Pasadena Playhouse's actor-training program is what drew him to California from Boston in 1949.

By March 1937, under Brown's helm, the Playhouse had produced Shakespeare's entire canon, plus 500 news plays. It was because of its reputation that George Bernard Shaw dubbed Los Angeles “Athens of the West.” That same year, the California State Legislature named the Pasadena Playhouse the State Theater of California. Had the designation come with a designated revenue stream, the theater's doors might still be open.

In a moment of introspection, Epps says he and his board could have been more aggressive in demanding support for “a theater that had come to deserve support.” He rightly points out that the caliber of productions underwent a major turnaround five years ago, returning the playhouse to its legacy as “a first-class theater,” earning the respect of Broadway and West End producers, and sending productions to New York (Vanities the Musical in 2009) and London (Sister Act: The Musical, currently playing at the London Palladium).

“We should have made more noise,” Epps reflects on his reticence to badger donors and publicize the depths of the theater's fiscal crisis. Living on day-to-day income and contributions rather than being able to rely on cash reserves or an endowment is a dangerous situation for any midsize arts organization, he adds. “Because if you have a bad six-month period at the box office or a bad period bringing in donations, you're in trouble.”

And this is why the theater is closing — at least until such an endowment or cash reserve comes in. Epps says that he remains confident this will happen, but he also alludes to the paradox of the economic divides among our small, midsize and large theaters.

“A much smaller institution that's thriving on imagination, hope and passion won't have these troubles,” he points out, “and a much larger organization is likely to have cash reserves.”

Yes, exactly. (Except for L.A. Opera, of course.) Given that we don't live in Berlin, a city that gives more money to the arts than the entire U.S. government, and given that our pall of un- and under-employment doesn't look as though it's going to lift anytime soon, the closure of the Playhouse sends out an alarm that raises three interconnected questions.

1) Can an art form with average ticket prices starting at $35, not including parking (add $8 to $10), be expected to thrive in the middle of a recession that came for the weekend and isn't leaving anytime soon?

2) Can an art form that is forced, out of financial necessity, to scale back on its spectacle (cast size, production design) be expected to thrive, when spectacle lies at the heart of the art form? (The Slavic word for a theater production is specktacle.) Add to this question the reality that by the time they emerge from their teens, 90 perecent of American youth who have been exposed to any professional live theater have only experienced Broadway-style spectacles. Pasadena Playhouse's production of Camelot was sliced and diced to be performed on a bare-bones set by a mere eight actors (and that's now a large cast for a midsize theater). The theater insists this was an “aesthetic decision,” but honestly now . . .

3) And finally: Who do we think we're kidding?

This is not the first time the Pasadena Playhouse has been shuttered. It was closed in 1969 for similar reasons (the theater's acting school followed in 1970). The building was saved from the wrecking ball thanks to a vigorous and successful community effort to have it added to the National Register of Historic Places, in 1975. Four years later, in 1979, the building was purchased by the city of Pasadena, which obtained an Economic Development Agency grant to pay for its restoration. It reopened with great fanfare in 1985.

We love our beautiful buildings, always have. But theater is what happens inside them. When that activity becomes something greater than an afterthought, something to be slotted in, that's when we'll have institutions that can sustain an art form that matters. Until then, the smaller the institution, the safer the home for the art. The safer the home, the more dangerous the art can be. And that may well be the key to the longevity, relevance and vitality of this art form.

And if that isn't the key, just a couple of very generous donors would surely help.

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