Signature Theatre is seen in the Shirlington neighborhood in Arlington. (Lance Rosenfield/Prime)

In a seven-hour span Wednesday, the Arlington County Board struck a death blow to a Rosslyn arts center and authorized a lifesaving $5 million loan to Signature Theatre in Shirlington.

Board members said they would support a recommendation to stop funding the money-losing Artisphere and close it at the end of June. But they unanimously approved a major financial restructuring for Signature, forgiving a $2.7 million bank loan, loaning another $5 million at 1 percent interest and allowing the theater company to operate rent-free until the 19-year loan is paid back. Some $411,000 in overdue taxes and utility bills were forgiven.

Both actions reflected a renewed commitment by county officials to fiscal caution.

Unlike the Artisphere, board members said, Signature had a viable business strategy if it could restructure its debt. Officials said the county had a vested interest in making sure the theater survived.

“I think this board values culture and the arts and fiscal responsibility,” board Chairman Jay Fisette (D) said just before the vote. He called the theater “an economic anchor for Shirlington” and said approving the loan was “the smart way forward.”

Eric Schaeffer, director of the play “Elmer Gantry” at Signature Theatre in Arlington, works with actors during a rehearsal earlier this year. (Lance Rosenfield/Prime)

Fiscal caution has been a hot topic in Arlington since the election to the board last spring of John Vihstadt (I), the first non-Democrat to serve in the county in 15 years.

Vihstadt campaigned on a platform that was heavily critical of what he described as county-backed vanity projects, including two long-planned streetcar lines that were shelved after Vihstadt won a second election in November — this time for a four-year term.

“In the current fiscal environment,” county manager Barbara Donnellan said Wednesday, the county can no longer justify nearly $3 million a year to prop up the Artisphere, which has never drawn enough visitors, donors and rentals to break even. The arts center opened in the former Newseum site in 2011.

At the same time, Donnellan said, financial assistance to Signature made lots of sense. “This has been characterized as a bailout of Signature, and that’s not the case,” Donnellan said. “It’s a loan . . . a public-private partnership.”

The Tony Award-winning playhouse operates in a county-owned building that also houses a public library. It’s considered an anchor tenant for Shirlington, drawing about 100,000 people each year. Its financial struggles began during the economic downturn of 2008.

County board members grilled Signature’s managing director, Maggie Boland, for two hours Wednesday before approving the loan, asking why the theater couldn’t simply raise its ticket prices, whether its vision was overly ambitious and what would happen if the loan payments were not made.

Boland answered that ticket prices “are set at the top of the market” and raising prices further would push a segment of the audience away. She cited a consultant’s study that concluded that neither price increases, fundraising nor budget cuts would be enough to offset the theater’s heavy debt burden and overhead.

The financial rescue, Boland told the board, would reduce the organization’s annual debt payments from $1 million to a much more manageable $300,000.

“We . . . took this responsibility in­cred­ibly seriously,” Boland said. “For the board and staff, this is going to be transformative — it’s going to change Signature forever for the better. It means we are on solid financial footing.”

Boland said efforts to raise money from individual donors and matching grants are ongoing, and she described efforts to cut costs since she arrived in May 2008.

Fisette extracted a verbal promise from Boland that the loan would be paid “in full and on time.” The county previously bailed out the theater by modifying its lease and paying overdue taxes. This time, if the theater defaults on the loan, the county could seize the building’s furnishings and other assets.

“We don’t want to be here again, and I don’t think you want to be here again,” Fisette said. “We want certainty that you’ll make those loan payments.”