City Moves to Charge Rent to Stage Troupe : Arts funding: The Costa Mesa Playhouse, which receives civic monies, is asked to take out liability insurance and to submit a self-sufficiency plan.

COSTA MESA —  The Costa Mesa Civic Playhouse may have to take its first step toward independence next week when the City Council is expected to consider charging rent on the Rea Community Center, which the amateur troupe has occupied at no charge since 1985.

At a council study session Monday night, city officials discussed a rental of $1,544 per month. But theater representatives said they could not afford that amount, and council members said they would entertain a counterproposal next Monday at the regular council meeting.

“What the council has done is ask the playhouse to come back to the city with a number it can afford,” recreation superintendent Charles F. Carr said Tuesday. “I don’t think the city wants to put the playhouse out of business.”

Eleanor Rey, president of the playhouse board, agreed: “The council has asked for an amount we could live with and they could live with. Our board is in the midst of putting that together. I really don’t know what we will recommend yet.”

In addition to demanding rent on a lease to run from Jan. 1 to Dec. 31, the council has requested that the city-sponsored theater take out “not less than $500,000” in liability insurance and submit a 10-year plan outlining how it will become financially self-sustaining.

The city currently provides the theater with an annual $35,000 subsidy as well as a $20,000 cultural arts grant. A promotional grant request for another $9,400 is pending. The city also maintains the theater’s premises at no charge.

“In 1988, when the city entered (the old) agreement, there was a discussion of the playhouse becoming self-supporting,” said Rick Pickering, assistant to the city manager. “But no plan was ever laid out, either by the city or the playhouse. More than likely, the new lease agreement will be part of that plan.”

Rey said that the playhouse board will take up the goals of a 10-year plan on Jan. 26, after the City Council meeting, and that it does not expect to deal with that issue before then. “But we have indicated to the council that we will be formulating a plan,” she said.

Neither Rey nor the theater’s administrative assistant, Pati Tambellini, believe that the theater has come under scrutiny strictly because of the controversy that arose last summer over its production of Christopher Durang’s “Sister Mary Ignatius Explains It All for You.” At that time, a small but vocal minority objected to the play because of its satire of Catholic dogma.

“They’re taking a strong look at the city’s funding of all the arts,” Tambellini said. “And this has come up now because it’s time to establish leases for insurance purposes. But I think we’re all aware that the controversy is what instigated this whole thing.”

Asked what rent she thought the playhouse could afford, Tambellini said it might be only “a token payment” of perhaps $100 a year. “Maybe we could dicker for a certain length of time before we have to make real payments,” she added. “At least until we get on our feet.”

According to Keith Van Holt, director of Community Services, which leases city premises to various recreational groups, a token payment might well be accepted.

“The city attorney has reviewed all city leases,” Van Holt said, “and for legal purposes--specifically liability coverage--he feels the council should approve a formal lease agreement with the playhouse even if the amount is only a token payment.”