But will success force fringe theater companies to find cheaper digs?

Past the empty lot on the corner of Attorney and Stanton Streets where vendors store their carts, past the bodega, the drug rehab house and the padlocked garage, stands — somewhat incongruously — the Present Company’s Theatorium.

This ain’t exactly Theater Row, but this new home for cutting-edge theater is indicative of the trends that are making the Lower East Side the new mecca for Off Off Broadway theater and are now endangering the theater community’s future. Off the beaten path, and until recently overrun with drugs, the Lower East Side offered no-budget companies affordable “theaters” (actually converted storefront spaces). But as the theaters improve the neighborhood — the Theatorium replaced a speakeasy and a chop shop — other businesses have followed, and suddenly the Lower East Side is on the verge of becoming too expensive for those who helped bring it to life.

While the Lower East Side actually stretches north to 14th Street and south to Fulton Street, the theaters dotting Ludlow, Stanton and other blocks below Houston Street distinguish between themselves and the East Village theaters above Houston.

“Houston Street has always been the great divide,” says Aaron Beall. Beall, the Joseph Papp of the Lower East Side, is artistic director of four small theaters (Nada, House of Candles, the Piano Store and the Tenement Theater) and co-founder of the New York Intl. Fringe Festival.

The theaters below Houston, which also include Surf Reality, Collective Unconscious, CSV and Expanded Arts, are “scrappier, more mutt-like and very experimental,” Beall says proudly, while “above Houston the polish begins.” He points to venerable East Village institutions like the Public Theater, P.S. 122, La MaMa and the Ontological Hysteric Theater as places where even the avant-garde need a bit of a track record to perform. (The East Village, however, is also filled with relative newcomers. Russell Dobular, artistic director of the Red Room, which is also on East 4th St., points out that he books a lot of Fringe Festival acts and that he, like the below-Houston theaters, co-produces shows, which is more affordable for new theater companies than charging a flat rate.)

“The Lower East Side theaters haven’t had the time or funding to become institutional yet,” adds John Clancy, artistic director of the Present Company, which had its first hit at Nada in 1995 and moved downtown from Hell’s Kitchen this summer. “That’s part of our strength, but also part of the daily challenge.”

Both Beall and Clancy love the phrase “rock ‘n’ roll theater” to describe the Lower East Side theater environment. It started at Nada with its 7’4″ ceiling and anything-goes attitude — a juggling act once adapted by performing on its knees, while Beall built his name on wildly diverse Hamlet and Faust festivals. Next came Beall’s decision — born of economic necessity, since he relies entirely on box office receipts for survival — to schedule shows at 8 p.m., 10 p.m. and midnight. With bars and restaurants helping to take back the night from drug dealers, Beall says the midnight shows are the most popular. “The environment is the opposite of theater everywhere else,” he says.

Clancy, who also receives no funding Ann will subsist on receipts from three shows a night, rehearsal rents and possibly a cafe, adds that the sense of community is stronger here than elsewhere in the city. “In the arts we babble endlessly about community, but this is truly a neighborhood,” he says, point out that the new theaters are simply following the tradition of the community groups like the Henry Street Settlement, which has a rich theater history.

The Present Company recently aided a church with its annual carnival and is working with the Educational Alliance’s rehab house — the patients will be invited to provide an audience for show previews while the troupe will help them create their own show. Additionally, all Present Company productions (but not all Theatorium plays) will have reduced prices for Lower East Sides (an idea that was a hit with the Fringe Festival); Clancy also plans to produce Spanish-language productions to appeal to the area’s large Latino community.

Many of the theater folk also live in the neighborhood, says Jennifer Spahr, executive director of Expanded Arts, who resides around the block from here Ludlow Street theater. So they have seen the neighborhood’s improvement — “we had to ask heroin addicts to move down the block,” Spahr says of her theater, which arrived in 1995, while Surf Reality’s Robert Pritchard says the deli next door was busted six times in three years for dealing crack.

But while they are thrilled by the transformation, they are also wary, since clothing boutiques and others are moving in from SoHo and driving up prices. Pritchard, who describes his theater, as “right on the edge of viability,” just signed a new five-year lease — for a third more than his last one. He, Beall and others are discussing forming a Lower East Side Theater District in the hopes of gaining political clout as a cultural asset … and tax abatements that will stop them from being forced out by skyrocketing rents.

The tax abatements won’t happen, and wouldn’t work anyway, warns Matt Bauer, executive director of the Lower East Side Business Improvement District. (Pritchard’s wife, Jennifer, is on the BID’s board.) For starters, he says, if they got tax cuts, then every theater area would demand it as would every Lower East Side merchant; if the tax cuts were granted, landlords would just raise the rents even more.

Still, Bauer says “we want them to stay in the neighborhood and the BID would be very supportive of a theater district. He’s enthusiastic about Pritchard’s idea of kiosks posting promotional information, saying that should be easily attainable, and he hopes to persuade the theaters to pool their funds to eventually buy a few buildings so they can control their own destiny. “That’s a better strategy,” he says.

Despite the real estate threat, Lower East Siders remain hopeful that their theater community will keep expanding. Jonathon Ward, who for 10 years has headed theater at the Henry Street Settlement, which includes the New Federal Theater, says the revitalization has even lured Tony Randall down to Henry Street to discuss bringing his National Actors Theater downtown. And the East River Amphitheater, which has sat largely unused for years, Ward says, is now stirring discussions from optimists who believe they can stretch the Lower East Side’s success all the way to the river. “That’s an indication of how much things have changed,” says Ward.

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