After 20 years on the waterfront in Sag Harbor, the Bay Street Theatre has decided it's time to find a new home once its lease expires in May 2013.

"This year was one of the best summers we ever had," said Tracy Miller, the theater's executive director. "And we've increased our subscriptions for next year . . . [but] we don't have a permanent home. This is a great spot, but now is the time to take the next big step for this organization."

About 30,000 people come to Bay Street every year -- more if you include film series and other special events. But the Actors' Equity Association theater faces several financial problems that are tied to its location in the heart of the Hamptons.

Even with sellout crowds, the theater must raise about $1 million a year just to keep operating.

"It's not just the rent," Mitchell said.

The rent for the 299-seat theater is $186,000 a year, which was to go up to about $200,000 next year, an amount Mitchell said is reasonable given the size and location of the building. It is on Long Wharf, a stone's throw from B. Smith's Sag Harbor restaurant and a short walk from the historic American Hotel.

But Equity rules require the theater to house its actors within a half-mile or to provide transportation and other services, which adds $150,000 to $200,000 to the budget. And because there is no room to build sets, that work is done in Riverhead, which adds another $50,000 a year to operating costs.

"It's not any one piece, but when you put it all together, it's astronomical," Mitchell said of the expenditures. "You would be hard-pressed to find another regional theater of our size spending $500,000 on rent."

In addition, the theater wants to own its own building, but the landlord does not want to sell the property housing the theater, which is prime real estate in Sag Harbor.

Theater officials told the Sag Harbor Village Board of their plans Tuesday night. "We said, 'Hey, we want to stay here, but the rent is too high,' " said Tim Kofahl, Bay Street's director of marketing. "We have to find a new place, even if we have to be in a tent."

That is unlikely. Bay Street officials say they have been searching for other sites, some of them in or near Sag Harbor.

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