Photo of the Lansburgh Theatre. (Courtesy of the Shakespeare Theatre Company)

The Shakespeare Theatre Co. cleared a major hurdle recently when it settled a lawsuit with its landlord in Penn Quarter, a deal that will keep its shows playing at the 450-seat Lansburgh Theatre.

But the organization has been quietly working on another deal that could provide it and other performing arts institutions a permanent home for actors’ housing, rehearsal space and storage for costumes and set equipment.

The theater is under contract to purchase the former campus of Southeastern University, a school that closed its doors in 2010 and was partially absorbed by the Graduate School USA. The school’s two-story, concrete building in Southwest D.C. has been vacant since then, and the Graduate School, which has put expansion on hold because of federal budget uncertainty, decided to sell it.

Chris Jennings, managing director of Shakespeare, said he and other theater directors have long sought a solution to the difficulty of finding apartments in which its actors — many of whom travel from New York — can stay while performing locally.

He said Shakespeare has about 30 apartments scattered around Capitol Hill, but with rental rates rising, it has become difficult to maintain them.

“In an environment like this, when you see your costs rising so quickly, it’s really hard to keep up with those rising costs,” he said.

The organization is also likely to lose space for rehearsals and costume storage that it has rented for years on Eighth Street SE in Barracks Row. The lease expires next year, and with the District’s restaurant scene booming, Jennings doesn’t expect to be able to work out an extension.

“We expect that the lease will not be renewed and will end up being a restaurant of some type,” Jennings said.

Jennings attempted to resolve the situation by teaming with a real estate developer, District-based EastBanc, on a proposal to redevelop Hine Junior High School on Capitol Hill, near Eastern Market. The theater had planned to combine its offices along with new housing for actors at the Hine site. EastBanc won the bid to redevelop the project from the city, but then asked so much from the theater financially that Jennings walked away.

“They win the bid with the goodwill of an arts organization, but when they win, we get priced out,” Jennings said.

The Southeastern campus at Sixth and I streets SW could provide an answer to not only Shakespeare’s space needs, but that of other theaters, Jennings said. When he meets with other local theater managers he said the same long-term concerns arise: where to house visiting artists, costume storage and rehearsal space.

Neither Shakepeare nor Graduate School USA officials released the terms of the contract. Jennings said he is in the early stages of determining how to finance his idea. Shakespeare could partner with a developer on a mixed-use project in which some of the market-rate housing helps pay for the artist and theater space. He also plans to approach D.C. officials about support the government may be able to provide.

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