After two months of serious searching for a new home, the 299-seat Bay Street Theatre in Sag Harbor has failed to meet its self-imposed deadline of determining where that home will be and how much it will cost to move.

But setting a deadline did lead to progress, said executive director Tracy Mitchell, and she expects the decision will be made by the end of the year -- more than enough time to complete the move before the theater's lease expires in May 2013. It is time, Mitchell said, the theater owns its own home.

"We've done a good job of educating the public on how the overall finances of not having a permanent home hurts this institution," Mitchell said, adding that after 20 years of leasing space, "We have to become an adult institution . . . You can't keep kicking this can down the road."

Mitchell will update the theater's board of directors Friday about the two most likely scenarios that emerged over the past two months: moving into the Parrish Museum building in Southampton Village owned by that municipality, or finding an alternate site in Sag Harbor.

Officials in both villages have offered support to the theater, which brings about 30,000 people a year to downtown Sag Harbor and provides free services to community groups. The theater also shortened its list of possible new locations: The board decided not to accept an offer to move to the new industrial park being built at Gabreski Airport in Westhampton.

"As a whole, the board said they do not want to move that far west. And it's not ideal for the theater. We need to be within a village where there is walk-by traffic," Mitchell said. "And any organization within a 30-mile radius knows how generous we are to the community. This Sunday, the entire elementary school of Sag Harbor held a variety show here. We didn't charge rental. It gave them the feel of what it's like in a professional theater."

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Money will matter in picking a new site but cost figures have not yet been worked out for the proposed alternate locations, Mitchell said. Theater officials say it will be easier to seek grants if the theater has a permanent home, and donors are much less likely to give money to an institution that might be moving away in a few years.

Other considerations for Bay Street as it seeks alternate sites: the fact that East Hampton already has Guild Hall with its own theater and its own supporters, while Southampton -- which owns the Parrish building which the Parrish Museum is now vacating for a larger site in Water Mill -- is home to a lot of major donors who already support the Parrish.