DC's Source Theater sold: cause for a cy pres review?

WBJ image.

In a follow up to the blog entry "Lack of a system breeds more of the same: Source Theater, Washington DC, up for sale 2006, 2024," from last December, the Washington Business Journal reports ("Source Theatre building on 14th Street NW sold to restaurateurs for $4.5M,") that the building has been sold to restauranteurs.  

The original asking price was more than $5 million, and CulturalDC, the owners of the property, although it had been acquired with funding from DC government, sold it the group because they offered more money than the primary tenant, the Constellation Theatre Group.  From the Washington City Paper ("CulturalDC Sells Source Theatre to Restaurateurs):

“On multiple occasions, Constellation asked CulturalDC for a meeting to discuss a deal and share our funding sources, but they would not accept our invitations. Finally, in April 2025, Constellation sent our Best and Final Offer of $4.1 million. We know the email was received, yet CulturalDC chose not to respond and instead, allowed the offer to expire.”

For years, Source has served as the home base for several performing arts organizations, including Constellation and local opera company IN Series, as well as a site of CulturalDC’s own programming. The public listing for the building had an asking price of $5.8 million; it later dropped to $5 million, according to WBJ. But the price it ultimately sold for was $4.5 million—just $400,000 more than Constellation’s April offer.

President and CEO of Theatre Washington (and former City Paper publisher) Amy Austin expressed grief over the sale, writing via email: “I am sad that the Source Theatre has been sold to a restauranteur/developer and will no longer be available as a much-needed performance space for our ever evolving theatre community. The Source was a special place that holds a collective almost 50-year history of memories and experiences that touched countless audiences and artists.”

The city government evidently is too busy putting money into professional sports, $500+ million for basketball and hockey, and $1 billion for football, to address the matter of the Source Theater, which I believe was acquired with DC funds.  (The reality is that governments only have so much capacity for dealing with such matters, and the Source Theater likely fell through the cracks, because the city doesn't really have an arts and cultural agency in the sense of cities like Chicago, Boston, Philadelphia, etc.)

In "When BTMFBA isn't enough: keeping civic assets public through cy pres review" (2016), I argue that the State Attorney General should intervene in nonprofit real estate matters, when the property will lose its non profit use as a result of the sale, for a review if not recession of the sale.  Cy pres provides for independent review of decisions by nonprofit organizations.

The doctrine originated in the law of charitable trusts, but has been applied in the context of class action settlements in the United States. When the original objective of the settlor or the testator became impossible, impracticable, or illegal to perform, the cy-près doctrine allows the court to amend the terms of the charitable trust as closely as possible to the original intention of the testator or settlor to prevent the trust from failing. -- Wikipedia

While the State AGs in New York (Cooper Union College), Pennsylvania (Girard College, Art Museum) and DC (Corcoran Gallery of Art) have taken on such matters, the outcome isn't preordained, and they don't necessarily use the frame of review--keeping the facility open, for arts uses--that I would.

For example, the Pennsylvania AG didn't get involved in the sale of the assets of the University of the Arts, which shut down last year.  Through the sales, some of the properties maintained their cultural use, others will not ("Keeping Avenue of the Arts for the Arts,' Philadelphia Citizen).

Similarly, the DC AG did not push what I thought should happen ("Should community culture master plans include elements on higher education arts programs?" [2016]).

While CulturalDC may have financial problems of its own, hence the sale, I'd say its worthwhile in the public interest for the sale to be rescinded in favor of a purchase by Constellation.