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Negotiations to bring Forest Park’s Circle Theatre to a warehouse in neighboring Oak Park have fallen through, meaning one of the village’s longtime cultural icons will remain on Madison Street for at least another two years.

The theater’s artistic director, Kevin Bellie, listed two primary issues for halting what appeared to be an inevitable relocation. A fundraising effort that sought to raise $500,000 was moving too slowly to meet the theater’s calendar, he said, and lease negotiations with the Oak Park property owner proved “difficult.”

“The biggest disappointment is that people put a lot of work into this and it couldn’t be realized,” Bellie said Friday.

Circle Theatre will remain in the Hain Building at 7300 Madison St. through the end of its current lease agreement, which expires on Oct. 31, 2010. The critically acclaimed performance group was lured to the Oak Park location at 217 Harrison St. with the promise of $212,000 in grant money from the village. Those funds would have offset renovation and operating expenses.

The Hain Building has been home to Circle Theatre for roughly 18 years. Following the sale of the property at the end of last summer there were doubts that the group would be able to afford an increase in its rent once the building was rehabbed, as planned by the new owner, Art Sundry.

While honoring the remainder of the lease agreement in Forest Park, the theater is still exploring its options for long term housing within the surrounding communities. Loretta Daly, the business services manager for Oak Park’s village government, said she views the announcement as a “delay” in Circle Theatre’s relocation, and said the extra two years will give the theater more time to raise money.

“We have every intention and plan to continue to work with Circle Theatre to help them identify new space,” Daly said.

Tentative discussions have already been had regarding Forest Park properties, said Bellie, but Oak Park most certainly remains on the list. Regardless of where the group ends up, serious consideration is being given to purchasing rather than leasing, he said.

“The one thing we have decided is everything’s on the table,” Bellie said.

Chris Kleronomos, the owner of 217 Harrison St. in Oak Park, declined comment on the development.

Earlier this year Sundry had said he was willing to consider letting the theater out of its lease agreement a year early to facilitate its relocation to Oak Park. However, Sundry said Friday that he recently received an e-mail from Bellie informing him that the theater intended to stay. He said it was unclear how the theater’s decision to stay might impact his plans for the Madison Street property.

“My intention is to do a 100 percent gut rehab of the building,” Sundry said. “There’s no way for me to address them staying or going. It would be harder to do that around them, but anything’s possible.”

The theater intends to continue with its productions as scheduled, said Bellie, and is contacting donors who contributed to the group’s recent fundraising effort. Roughly half of the $500,000 goal had been accrued, said Bellie, and many of the donors thus far have told the theater to keep their gift.

That money will likely be put to immediate use when the theater installs new seating, new risers and expands its lone restroom facility in the Hain Building. Those improvements were announced in a written statement on May 28 as examples of the performance troupe’s commitment to its production schedule.

According to Bellie, the theater is also in the process of hiring a new managing director following the departure of Rula Gardenier about a month ago. Gardenier left Circle Theatre for a film project that will take her to Europe for several months, said Bellie.