Fifteen months after opening with great aplomb, Bedlam Theater’s outpost in St. Paul’s Lowertown is desperately fighting off financial ruin.

The theater/bar/restaurant needs $400,000 by year’s end to stay alive. Closure would remove an edgy, important voice from the theater scene and deal Lowertown a blow in establishing itself as a hip neighborhood committed to the arts and creative place-making.

“It’s pretty dire,” said Bedlam board chair Dan Spock, a program director at the Minnesota Historical Society. “We’ve been struggling with cash flow for more than a year.”

Bedlam triumphed in one plea for funds, selling more than 3,000 drinks on a single night in July. The hangover is that Bedlam still needs $75,000 by mid-September in an IndieGoGo.com funding appeal and the other $325,000 by December. As of Monday, just under $9,000 had been raised.

“We had an awesome June,” Spock said. “Jazz Fest [in nearby Mears Park] was a total home run. But a healthy organization has to have a cash reserve, and this is a hard lesson we had to learn.”

Bedlam’s crisis is a cautionary tale that involves construction cost overruns, the difficulty of transforming a clubhouse collective into a business institution and a vigorous enthusiasm that overestimated the organization’s capacity to tackle financial issues in the quest to establish a unique club in Lowertown. Too, Bedlam’s business plan was insufficient to weather the normal bumps involved in the first year of operation.

“It takes time to get established and they underestimated that,” said Robin Gillette, former executive director of the Minnesota Fringe Festival, who was asked earlier this year to bring some order to Bedlam’s finances.

Controlled anarchy on stage

Bedlam was begun by artists who liked their theater radical and broadly participatory. If there was artistic brilliance, it came in the form of great community efforts. Bedlam experienced its greatest success after moving into an old bar/restaurant on Minneapolis’ West Bank in 2007. The troupe created a social club that helped support theater, but a landlord’s decision pushed them out in 2010.

Joe Spencer, director of arts and culture for St. Paul Mayor Chris Coleman, wanted to get Bedlam into the old Rumors and Innuendoes nightclub in Lowertown. The location would be near the Green Line light rail terminus, the newly refurbished Union Depot and the St. Paul Saints new stadium.

Bedlam agreed but found the building needed significant improvements, delaying the opening and required $650,000 of long-term debt to cover a gap in capital.

If anyone at that point had suggested stepping away, those arguments were swept away by momentum and enthusiasm. The city committed $150,000, and several foundations such as McKnight, St. Paul and Bigelow made six-figure grants. The Nonprofit Assistance Fund was loaning $250,000 to the project.

“Once you get started, you’re on a fast-moving train,” said Spock, who just became board chair this year.

Bedlam has $50,000 in debt payments due in October, according to a staff document. In addition, Bedlam owes about $90,000 for vendors, back payroll and sales tax.

Undercapitalized

The West Bank success actually worked against the troupe as it tried to transfer a clubhouse operation to an institutional setting.

“The rent on the West Bank was superlow in a building that may or may not have been [up to code],” said Spock. “Servers were volunteers. Now we’re trying to be more professional.”

Spock took on the challenge of keeping Bedlam afloat because he passionately believes in its mission. At the same time John Bueche, the troupe’s founder and leading personality, went on a sabbatical that coincided with parenting leave.

“It was clear to us that John was overwhelmed and we thought we should ask him to step back,” Spock said. That is when Gillette was hired to deal with the financial situation.

“It was a mess,” Gillette said. “There is a lot of debt — short-term and long — and there are not enough people to operate the club at the size it is.”

Gillette said Bedlam has a staff that is more dedicated and loyal “than any staff I have ever seen.” But she chose not to continue with Bedlam once her three-month contract expired because she “couldn’t see a business plan that works.”

Andi Cheney replaced Gillette. Bueche’s future remains uncertain.

“It’s a difficult moment when you’re balancing the founder’s visionary role with a practical step of getting business done,” Spock said. “We would need to be comfortable with his role and he would need to be comfortable with his role.”

Still optimistic

Spock remains a firm believer, despite numbers that seem overwhelming. Spencer, too, feels Bedlam has righted many of its problems and said, “It’s a great fit for Lowertown.” While institutional giving has been strong (Spock points out that $1 million was raised in capital), Bedlam has not been able to tap St. Paul’s private donor base.

“Philanthropy requires some cultivation and development and that was going to take time,” said Spencer.

Whether Bedlam survives to make use of those donors rests on the same unconventional sources that have made it a 20-year fixture in the Twin Cities theater scene.

“As a board, we’re looking at all alternatives,” Spock said. “We’re not going to say we’re closing until we have exhausted every possibility. It would be a damn shame if we went down.”