Correction: An earlier version of this article misstated André Bishop’s title and the number of seats in the Claire Tow Theater and the Mitzi E. Newhouse Theatre. Bishop is producing artistic director of Lincoln Center Theater, not artistic director; the Claire Tow has 112 seats, not 110; and the Newhouse Theatre has 299 seats, not 334. This version has been corrected.

View of the Signature Theatre entrance, Location: New York NY, Architect: Gehry and Partners. (David Sundberg)

What does it take to produce new American plays? Money and nerve, and lots of it — especially in the biggest institutions, where the rewards can be great but the risks never end.

In New York, Lincoln Center Theater and Signature Theatre are now shouldering elaborate loads to do what a generation of playwrights have begged theaters to do more often: produce brand-new plays.

“There was something amiss,” says James Houghton, Signature’s founding artistic director, “in terms of plays being way overdeveloped, and not produced.”

“You hear this from everybody,” says André Bishop, producing artistic director of Lincoln Center Theater. “Everybody does readings. Everybody does workshops.”

That’s why Lincoln Center spent $42 million to build the new 112-seat Claire Tow Theater, and why Signature created the $70 million, four-stage Pershing Square Signature Center: to give emerging scripts and artists first-class platforms. In addition to staging new plays — hiring actors, designers and stagehands, paying for everything from rehearsal time to promotion — these companies are also keeping ticket prices eye-catchingly low. Tickets are $20 at Lincoln Center’s LCT3 program and $25 at Signature.

This is how two leading organizations are doing their bit to liberate the American theater from the clutches of “development hell.” For decades, companies dreaded the costs of producing and flinched from the challenge of drawing paying audiences to titles that weren’t already proven. New plays, the phrase went, got “workshopped to death.”

How big did the problem get? You could measure it by the state-of-the-art Cradle at Arena Stage, linchpin of the troupe’s splashy $135 million expansion that opened in 2010. The Cradle was an especially lavish response to an issue that had been riddling the field.

The good news: New plays are receiving love and attention as perhaps never before. In Washington alone, midsize troupes such as Woolly Mammoth, the Studio Theatre and Theater J (among others) lately have launched or upgraded programs putting new scripts on stage. The National New Play Network is based in Washington. So is a new playwrights’ collective called the Welders, with their first show due in March.

But a major institution that builds a brand-new multi-million dollar stage specifically to produce new works is a solution on a bigger scale. This is the jumbo class occupied in Washington by Arena and in New York by Lincoln Center and Signature — until lately a small-ish company punching far above its weight.

The Cradle has been slow to lift. Arena’s executive producer, Edgar Dobie, notes that the space is used for developmental programming, that new works also get staged in Arena’s two bigger venues and that limited discount programs are in place. But full productions in the Cradle remain fairly scarce, and prices are steep, routinely at or above $100.

Lincoln Center and Signature, on the other hand, have kept the new plays coming in their attractive, well-equipped, expensive new facilities. (The Pershing Square Signature Center is the largest new theater center in Manhattan since Lincoln Center, Houghton says.) And though it takes maximum willpower and fundraising, so far they’re keeping the tickets cheap. “New Artists, New Audiences,” goes the LCT3 slogan.

That one-two combination is easier said than done, but Bishop says showcasing emerging artists and enticing vital young audiences is a pivotal part of the nonprofit theater enterprise they are in.

“It was a risk we simply had to take,” Bishop says.

Leveling the playing field

Signature — not to be confused with the musical theater in Arlington — has been staging new works with an original twist since Houghton founded the troupe in 1991. The idea was to showcase a single major writer all season long, producing revivals alongside premieres in order to focus on whole bodies of work.

Signature’s Edward Albee season 20 years ago helped fuel the revival in that neglected American master, who hadn’t been produced in New York for a decade.

“In a way, Edward is a case study for why the company is necessary,” Houghton says. Albee had been “dismissed, yet acknowledged and studied as one of our preeminent writers.”

Attention was paid over the years as Signature — operating in the small Kampo Cultural Center, then at the Public Theatre for two seasons and finally in a 160-seat storefront theater for 15 years — offered whole seasons dedicated to Adrienne Kennedy, Sam Shepard, Arthur Miller and more, with premieres built into nearly every playwright’s residency.

Those residencies were termed Signature’s Residency One program, because one writer was the focus for one year. But Houghton also devised a Legacy program for writers returning to the Signature stage, and then he added a Residency Five program. Residency Five commissions writers for five years, offering salaries, health care and resources, from office space to rehearsed readings.

Residency Five playwrights are guaranteed that during their tenure, three of their scripts will be produced.

“You’re no longer working in a hit-or-miss ethic, where the relationship will continue based on how this project goes,” Houghton says. The idea was to see if, for the writer, “something shifts in how someone works when you take all the white noise out — when you just say, ‘We’re doing your next three plays.’ ”

He cites current Resident Five playwright Katori Hall — one of seven writers in the program, who include Annie Baker and Kenneth Lonergan — and the conversations they have about how the latest play adds to the discussion of Hall as an artist and what her next step might be.

(Arena produced Hall’s “The Mountaintop” last season and on Thursday announced that the company will showcase a world premiere by the playwright in the 2014-15 season.)

Houghton’s plans demanded more space, and Signature purchased a below-market-price property on West 42nd Street, thanks to a special theater-friendly designation established by the city decades earlier. In exchange for creating a raw theater space on the lower floors, the developer was granted permission to build 15 additional floors, and Signature’s new four stage Pershing Square complex opened in 2012.

Inside, the Frank Gehry-designed facility, a low-key central lobby — spacious and bright, made of wood and concrete — functions as what Houghton calls a “village green.” Couches and easy chairs create a spacious sitting area near a well-stocked bookstore. Opposite the bookstore is a high-tech digital wall with three 85-inch-high screens — “giant iPads,” Houghton says — where visitors can interact and learn about the company.

In another area, a modest cafe/bar is open to the public. Playwright David Henry Hwang (“M. Butterfly”), whose new play, “Kung Fu,” is in rehearsal for performances starting Feb. 4, strolls through for a coffee. Houghton scans the dozens of people occupying the spacious, multi-function lobby on a bitterly cold Wednesday afternoon and doesn’t recognize anyone — not the seven people conducting a meeting, not even a young woman running lines with herself. But the room’s hum makes him happy.

The Pershing features two theaters that seat 191 people and another that can hold 294, with a well-equipped rehearsal hall also available for production. This is a big leap up from a single 160-seat facility, and Houghton doesn’t feel that Signature is firing on all pistons yet. The goal is nine productions a year, and currently the troupe, operating on a $12 million annual budget, is offering seven.

But the tickets are $25, thanks to a massive $20 million underwriting program from the Pershing Square Foundation. Signature gets $1 million a year for 20 years to help keep ticket prices so low; to do that, Signature has to raise an additional $1 million a year. Houghton prints all that on his tickets, and puts it on a big poster inside the front door: Tickets should cost $75, but donations drop the price to $25.

Demand is high, and tickets go fast. Prices jump to $75 if shows are extended, but branding at $25 “makes people more daring in their willingness to experiment,” Houghton says. It also raises awareness that it takes donations to create first-class productions of new plays and keep them accessible to a broad audience. Houghton says that, while giving has been flat nationally for five years, it’s up across the board at Signature.

“What’s happening,” he says, “is the person sitting in this seat who can afford full freight is giving back when they have the opportunity.”

The company doesn’t have a stand-alone educational component, because Houghton believes the plays are the thing.

“To me, access is education. If you can be in the room, that’s the beginning of an education,” Houghton says. The low ticket price creates a civic benefit, too: “If you can level the playing field, it’s a more democratic approach to having a theater experience.”

The long view

Bishop wasn’t worried about the American theater when he created LCT3.

“In my opinion, the American theater is in great shape,” Bishop says in his office, a remote spot in a warren downstairs. “And in my opinion, we’re in an incredible golden age of American playwriting.”

He was concerned, though, about Lincoln Center Theater’s connection to active artists, especially after the premature deaths of playwright Wendy Wasserstein and director Gerald Gutierrez, his colleagues and friends.

“We were in some artistic danger of falling behind,” Bishop says. “I didn’t want to see us in the future looking around and saying, ‘What happened to our family of artists? Where are they?’ ”

Of Lincoln Center’s 1,047-seat Vivian Beaumont Theater and its 299-seat Mitzi E. Newhouse Theatre, Bishop says, “It’s not for kids. It’s not a place where you try your wings, however talented.”

Bishop brought Paige Evans, an associate artistic director of the Manhattan Theatre Club, to run a new program that would produce plays at the small Duke theater, about 20 blocks south of Lincoln Center. LCT3 started in 2008, and when it quickly gained traction, Bishop began thinking about building a theater for it.

But where? Downtown, where the coveted young audience was? Manhattan artistic directors uniformly told Bishop it had to be on the Lincoln Center Theater’s marble campus, which was already crowded with opera houses and concert halls.

The only feasible spot was on top of the Vivian Beaumont, which is where the Claire Tow (rhymes with “now”) theater opened in 2012. It feels like a boutique: Elevators attached to the side of the Vivian Beaumont lift you to a lavishly equipped stage and a plush little theater a mere seven rows deep. The stage glows with gold-colored costumes, sets and props as the Rude Mechs, an acclaimed theater collective based in Austin, rehearses the world premiere of something called “Stop Hitting Yourself.”

Out front, there’s a small bar and a glass wall with doors leading to a wide patio showcasing excellent views of the Manhattan skyline. It’s an appealing scene. And at $20, tickets are a steal.

“Twenty dollars seemed like an astoundingly low figure,” Bishop says. “That seemed like something where we really could get a new audience, would not have to rely on membership or subscription, and would be very attractive to younger people.”

Tickets aren’t sold on a subscription or in packages, and the prices never jump. Lincoln Center does not have the kind of major single donor to drive underwriting that has blessed Signature, and Evans says even with sellouts and near capacity crowds, tickets only cover about 20 per cent of the production costs that average about half a million dollars. LCT3’s annual budget is $2 million, and while Evans hopes to offer four shows a year, right now the program produces three.

“I don’t think it’s where anybody wants it yet,” Evans says about the number of weeks the Tow operates annually.

Still, the program has been a success, drawing a young and diverse crowd to, say, the world premiere of Amy Herzog’s “4000 Miles” — a Pulitzer Prize finalist that has received many productions nationally — and to Ayad Akhtar’s “Disgraced” in its second production, before the play won last year’s Pulitzer Prize for drama.

But working on the Lincoln Center campus means higher union costs. Arena Stage faces the same hurdle with the Cradle, obliged to uphold union obligations with actors, designers, directors, musicians and others on a scale above those faced by most new play hotbeds on small stages.

“You start with a certain cost structure,” says Dobie, “and 200 seats.”

Is the model financially sustainable?

“It’s daunting, there’s no question,” Bishop says. “One of the many things we’re coping with is our ability to keep it going better and better into the future, because it has added a huge financial burden to us.”

Expansion costs are still a factor, with funds still to be raised, though less for Lincoln Center ($1.5 million) than for Signature (between $8 million and $10 million) or Arena ($16 million as of 2012).

“I’m sure the day will come eventually when we’ll have to raise the ticket prices,” Bishop says. “You can’t stay at this forever. But no matter what we charge, it’s [112] seats. It’s never going to be anything but something that we have to support financially.”

Like Houghton — like everyone in the nonprofit theater — Evans notes that it’s vastly easier to raise money for capital campaigns and “sexy” new initiatives and buildings than for long-term, everyday operating costs. Perhaps that’s what’s mostly clearly illuminated by these new play projects on the deluxe intimate stages that only substantial organizations can create; as Evans puts it, “It really is something that requires real philanthropy.”