First reported 7/24/2010 1:43 p.m.

It’s official. “For Lease” signs are up at 7300 Madison, the time-worn space that since 1988 has been home to Circle Theatre, the award-winning village-born arts company that’s come to be known in Chicago as “theater at its best.”

On Friday night, representatives of Circle Theatre signed a 14-month lease for performance space owned by Village Players, an Oak Park theater company that’s recently been facing a financial crisis.

The short-term move is a win-win for both groups, says Kevin Bellie, Circle’s artistic director. Bellie said the agreement allows Circle, which has been looking to move for more than two years, the space to perform while the company continues to search for a permanent home.

Circle has been facing an Oct. 31 deadline, the date on which its lease ends on the first-floor space in a former 1920s department store building a block east of Circle Avenue on Madison. Since the sale of the building in 2007, there have been doubts that the nonprofit theater company could afford an increase in rent once the building is updated. The building’s owner, Art Sundry Jr., has said he will do “a 100-percent gut rehab.”

The lease just signed satisfies an immediate need, too, for Village Players, the Oak Park theater company that canceled its last show of the spring season and reorganized last month to promote the performance space it owns as a rental venue.

“This works wonderfully for us,” said Rosemary Foley, president of the board at what is now known as the Oak Park-River Forest Performing Arts Center. “Circle wanted to get in to put up The Wedding Singer in September. We wanted the income to come in so we can pay our mortgage.”

Bellie said the rent negotiated is comparable to what Circle has been paying.

“They’d approached us,” Bellie said. “They knew we were looking.”

Foley said the agreement will bring in just enough money to allow Village Players to pay its mortgage, utilities and insurance on the building.

Neither Circle, which is 25 years old, nor Village Players, about to celebrate its 50th anniversary, is ruling out a longer-term agreement. But, Bellie says, Circle remains focused on finding a permanent home.

“Our ultimate goal is to have our own space that we build from the ground up,” Bellie said. “We have a strong plan that we have in mind and an idea of where that space would be, but it’s too early to talk about it.”

Though Bellie, who lives in Forest Park, would not give specifics, he did say, “We are considering the entire tri-village area of Oak Park, River Forest, Forest Park. We are very happy in the area and appreciate all the support we receive from all three communities.”

The lease on the new space, according to Bellie, started July 23, the date it was signed. He said Circle is prepared to pay for performance space in both villages until the end of October.

In the meantime, Circle is keeping a full run of the well-reviewed The Philadelphia Story, which will play in Forest Park through Sept. 5. The summer children’s production of Ragtime will also be staged in Forest Park. The Wedding Singer, a musical version of the Adam Sandler movie of the same name, will debut in the Oak Park space on Sept. 17, Bellie said.

Mayor Anthony Calderone said he’s “highly disappointed” with the loss of a group born in Forest Park. “Unfortunately, we don’t have the resources to save the day,” Calderone said, referring to help that Circle had sought from village government.

Circle – named Chicago’s favorite theater by Channel 7 viewers and called “theater at its best” by Sun-Times critic Hedy Weiss – has been praised for being a vital part of Forest Park’s cachet as a regional destination.

“Circle Theatre has been an integral part of the success of Madison Street,” Laurie Kokenes, executive director of the Forest Park Chamber of Commerce and Development, has told the Review.

Helen Karakoudas Redfern contributed to this story.

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