BY LINCOLN ANDERSON | If ever there was a time for a deus ex machina — a miraculous theatrical happy ending — this is it.
Lorcan Otway, the owner of Theatre 80 St. Mark’s, says he’s in a grave financial bind. He’s been forced to default on his mortgage due to a double whammy of a creditor’s high interest rate, plus the pandemic.
“Instead of foreclosure, they are attempting to sell the property out from under us at auction,” he said.
The deadline is looming — either Jan. 8 or Jan. 9. On one of those dates, Otway said, “They will attempt to sell the building.”
“They” is an outfit called Maverick Mortgage.
Otway is praying a Hail Mary pass to save the venerable East Village venue could connect: “We’re asking [Governor] Kathy Hochul under an executive order to give us a low-interest loan,” he said.
The pandemic, with its mandated closure of theaters, was a crippling blow to Off-Broadway spaces like Otway’s. However, in addition, right before COVID hit, he had just refinanced the property’s mortgage as part of a plan to expand the business. So, with the theater shut and his tavern’s take down due to limits on indoor dining, his interest rate shot up from 10 percent to 24 percent. This perfect storm has created an additional $2 million of debt over just the past year.
The property, at 80 St. Mark’s Place, between First and Second Avenues, includes not just the theater, but also the William Barnacle Tavern, the Museum of the American Gangster and a Foxface sandwich shop, plus a bed and breakfast. The complex has been in Otway’s family for 57 years. Otway today runs it with his wife, Genie.
The current owner remembers when he was just 9 years old and helping his dad dig the theater’s floor deeper, scooping out dirt to enlarge the space.
When Howard Otway died, he left the building half to his wife, Florence, and half to a three-way trust of Florence and their two children, Lorcan and his brother. In 2010, Florence died, setting in motion a snowballing series of financial challenges.
First, Otway bought his brother out of the trust, paying him a quarter of the building’s value. He also had to pay his mother’s estate taxes on the property. In short, Otway went from no debt to being behind the financial eight ball.
Inheritance taxes simply are crushing, Otway said.
“It has made generational, family small business very hard,” he said, noting such taxes were originally “designed to break up the Rockefellers” not hammer mom-and-pops.
Beyond his own predicament, the shuttering of the city’s theaters is a disheartening trend, with 75 venues lost in the last 10 years, he said.
“We serve the community,” Otway declared. “We work seven days a week and often 18 hours a day. And we do so because we believe the solutions to what we’re now facing are not political but cultural. New York without independent small theater is not New York.”
A reason so many movies are shot in the Big Apple, he said, for example, is because its intimate theaters are such good training grounds for actors.
If only government would recognize all of this value, though. Otway said that during the pandemic, the state should have taken on theaters’ mortgages since the state was preventing them from earning income.
“They should have provided low-interest loans to make theaters whole again,” he said. “We’re paying about $6,000 a day in interest. They should have frozen the loans and then we could go back to paying 10 percent interest.”
In addition, in Theatre 80’s case, Otway thought he was simply heeding the state’s pandemic recommendation to “redesign” the space when he decided to retrofit it as a cabaret space, adding tables for patrons, plus food and beverages. The hope was also that the cabaret would “make more per capita.” But the new concept has been slow to lift off, snarled by the need to obtain a liquor license for the cabaret.
A stand-up comedy benefit for Julian Assange’s legal defense was held at the cabaret in October, though without food or beverages being served.
So, Otway is now left trying to raise $8 million in a very short time frame.
“Every little bit helps,” he said. “Especially, our legal fees are killing us.”
According to The Real Deal, a previous auction date that was set for November was averted. But Otway didn’t indicate that this time around there was a chance for a reprieve.
Beyond hoping for help from Hochul, Otway ideally envisions a Jeff Bezos-like figure riding to the rescue.
“The dream,” he said, “is that some wealthy person [gets involved] who loves the neighborhood and loves the arts and understands that senior citizens shouldn’t be put out on the street for doing what government asked them to do during the pandemic.”
Correction: The original version of this article said the auction date for Theatre 80 St. Mark’s had been set for Jan. 30. In fact, the date had been set for Dec. 30, but then pushed off to either Jan. 8 or Jan. 9.