Source Theatre has purchased its 108-seat Warehouse Rep building with the help of a $365,000 loan from the District of Columbia's Office of Business and Economic Development. At a press conference today at the theater, at 1835 14th St. NW, theater representatives and Mayor Marion Barry will announce the purchase, the receipt of a $50,000 grant from the Philip L. Graham Fund, and the kickoff of a $250,000 fund-raising campaign toward renovation of the automotive-repair-shop-turned-theater.

"It was a straight business loan from the District. No politics, purely business," Source board Chairman Brian Foss said Monday. "And it only increased our monthly payments by $200 to go from tenant to landlord. This kind of loan has seldom been done for an arts organization in D.C. We have -- quite painfully -- blazed a trail, and we want to share with other arts groups how we did it."

The purchase is an encouraging sign of security and stability for Source, which pioneered theater in the 14th Street area during its artistically prolific but financially troubled 10-year history. It also further establishes the 14th Street "theater corridor," including Studio Theatre, which opens its stylish new house tonight with a performance of "North Shore Fish"; Woolly Mammoth Theatre Company, which has moved into Studio's Church Street space; Javarama; Living Stage; and Moving Target Theatre.

Source nearly lost the Warehouse building in 1984, but Consumers United Insurance stepped in at the last minute to purchase the building, and rented it back to Source at $1,745 a month. A recent change in senior management at Consumers United spurred the company to sell several properties, and the company agreed to sell the Warehouse to Source at the appraised value of $365,000.

"We started to explore options of how we could afford to buy the building," Foss said. "We decided right away that conventional financing was out of the question. It would have more than doubled the operating costs of the theater, and interest rates were way more than we could afford."

Foss and board member Malcolm Smith contacted the District's Office of Business and Economic Development, which had acted as an intermediary with Consumers United to help save the Warehouse. They were assigned to a development specialist and submitted a business proposal in late December 1986.

The District office approved a loan based on a study of Source's contribution to the community and minority employment history. "Fourteenth Street is an area that is developing a concentration of arts groups, and the Source Theatre staked a claim there early on," said Dan Acker, spokesman for the Office of Business and Economic Development, yesterday. "We certainly welcome the Source putting its faith and its energy in that area of the city."

The loan covered the entire purchase price, at 5 percent interest based on a 30-year mortgage. But the loan has a 10-year call (with a five-year extension), so Source will need to find new financing after 15 years. Last year, the District made a similar loan to Dance Place for the purchase of a building in Brookland, after rent increases and development forced the troupe to leave its Adams-Morgan space.

Loan conditions stipulate that the Warehouse building be maintained as a performing arts facility and require that $50,000 be raised within four months of closing to be used for renovation. Foss said the grant from the Philip L. Graham Fund satisfied that requirement.

"We've got to have basic creature comforts for the building," said Foss, listing such priorities as central air conditioning, better heating, insulation and new windows, which would permit comfortable year-round use of the theater.

Designer Doug Bailey has drawn up plans for the interior and exterior that would replace the deteriorating ceiling with an atrium, replace view-obstructing pillars with steel girding and move rest room facilities to the front lobby area. A new thrust stage will be constructed, seating will be expanded to 160 seats, and the actors will get a new dressing room and green room. Foss said the theater will probably shut down for renovations during August and September, following Source's eighth annual summer theater festival.

Foss said Source is negotiating with a D.C. dance troupe about sharing the Warehouse's second-story rehearsal space. Source founder and former artistic director Bart Whiteman, who lives in the apartment on the second floor, will remain until renovation begins. Whiteman's father owns Source's other building, the smaller Main Stage at 1809 14th St.

The public press conference is scheduled for this morning at 11:15. Mayor Barry, Kwasi Holman, director of the Office of Business and Economic Development, and Abel Lopez, president of the League of Washington Theaters, are expected to attend.