Debt-ridden Bethesda Theatre goes to auction Tuesday
Historic Wisconsin Avenue landmark has $4M debt
After efforts to revitalize the debt-ridden Bethesda Theatre failed, the historic Wisconsin Avenue landmark will be auctioned as a mortgage foreclosure Tuesday.
The news has left a group dubbed Save the Bethesda Theatre and the theater's nonprofit board, the Bethesda Cultural Alliance, looking toward an uncertain future for the well-loved structure, which is owned by the alliance.
The 1938 theater has a $4 million debt, said Steven A. Silverman, director of the Montgomery County Department of Economic Development, a board member of the alliance, which is tasked with financial and operation support of the theater. The alliance was formed by the Bozutto Group after the theater re-opened in 2007 following the development firm's $12 million rehabilitation of the theater. Bozutto rehabilitated the theater in conjunction with development of The Whitney, an apartment complex that sits above the theater, and the alliance is composed in part by Bozutto executives.
Silverman's team recently began to solicit a management company to contract with the alliance to run the theater. The alliance met Monday to review 12 proposals but none appeared to be in a financial position to absorb enough of the debt, he said.
"The board hopes there'll be an opportunity after the foreclosure to either work with the successful bidder or work with the bank to keep it open as a viable theater," Silverman said. "At this point, there's no angel coming along to take over a substantial portion of the debt that would be necessary."
The county's fiscal situation would likely preclude it from stepping in to bail out the theater, he said.
The theater opened as an Art Deco movie house in 1938. It was later incarnated as the Bethesda Cinema and Drafthouse in 1983 and the Bethesda Theatre Café in 1990. It closed in 2001 and re-opened in 2007.
It was left struggling after damage from a flood caused by malfunctioning plumbing in the Whitney caused it to close in 2008 at the beginning of it much-anticipated run of "Smokey Joe's Café." The theater also took a hit from the sour economy, and in 2009 parted ways from its managing partner Nederlander Worldwide Entertainment, which produced several successful off-Broadway shows there.
In recent months, the theater has been struggling to remain economically viable as a rental venue. It has been able to cover daily operating costs, but not the mortgage, said managing director Tom Davis.
In response to news that the theater was struggling with debt, a group dubbed Save the Bethesda Theatre formed about a month ago to look for ways to keep the theater economically viable, said Jerry Morenoff, a former director at Bethesda' Imagination Stage and former president of the Greater Bethesda-Chevy Chase Chamber of Commerce. The chamber formed the group.
Save the Bethesda Theatre has discussed taking over the theater, Morenoff said, "But the problem being that there's this big onerous debt that surrounds it, and I'm not sure if anyone has the appetite to take care of that."
The group, which has met twice, encompasses community and business leaders interested in keeping the theater as an entertainment venue in Bethesda, said Stephanie Coppula, a spokeswoman for the Bethesda Urban Partnership. BUP, tasked with the marketing and upkeep of downtown Bethesda, is also a part of Save the Bethesda Theatre.
"The group wants a positive future for this theater," Coppula said. "Obviously, no one wants to see a vacant space in the heart of downtown Bethesda."
Ray Cullom, who formerly directed the theater with Nederlander Worldwide Entertainment and is now managing director at Long Wharf Theatre in New Haven, Conn., said he was surprised to learn of the auction. As a rental venue, he said the theater was beginning to create a niche by appealing to non-traditional audiences.
It has been rented for everything from jazz and alternative music shows to a cabaret series, and recently hosted Montgomery's Got Talent, a talent showcase for seniors.
"I was surprised and very sad," Cullom said. "The theater had a great deal of potential, which I think we demonstrated in the first year of operations, that it looked like it was going to fulfill."