The city of Denver is looking into how the failed Denver Immersive Repertory Theater spent a large loan from taxpayers — and whether that money is ever coming back.
The company’s former landlord confirmed this week that DIRT failed to make recent rent payments despite receiving tens of thousands of dollars in loan money for that purpose. The city is also seeking an accounting of the rest of its $400,000 loan to back the project.
DIRT made a big splash with a plan to spend up to $2 million in total to transform a downtown building into the “world’s first resident immersive theater,” including a bar, a cabaret lounge and other scenes for theatergoers to explore.
But it all came to a halt when DIRT was served an eviction notice last month. The show was already months past its planned opening date but hadn’t yet debuted.
Fred Glick, the landlord, confirmed that DIRT returned the keys and terminated its lease voluntarily, effectively ending the eviction case. Glick said he had only received rent payment for the month of April and considers his dealings with DIRT as “done and over.”
Now, the city is asking what happened to the tax-funded loan DIRT received. The company received the full $400,000 loan that was approved earlier this year by the Denver Downtown Development Authority.
“The city is aware that DIRT is experiencing significant financial and operational difficulties relating to the Development Project,” states a letter from the city’s Department of Economic Development and Opportunity to DIRT.
DIRT is owned by Steve Wargo and Blair Russell, two New Yorkers who relocated to Denver to launch the new theater. Wargo did not respond to a request for comment.
What does the city want to know?
The downtown authority approved the loan for the project in July of last year, saying it would bring business to downtown. It is one of dozens of projects receiving funding from a pool of hundreds of millions of dollars backed by downtown property taxes.
DIRT requested a transfer of all $400,000 on Jan. 26, including $52,212 in rent expenses for its upcoming March, April and May payments, according to public records.
However, Glick said the company only paid for April, missing May, June and July. That echoed city officials’ concerns that tens of thousands of dollars may not have been spent as promised.
“DIRT’s failure to use loan proceeds for the purposes described in the Loan Agreement is a default,” reads a letter from the city’s Department of Economic Development and Opportunity.
A default occurs when a recipient breaks a loan agreement. The contract states that in a default, the interest rate on the loan will spike to 15%, DIRT could be responsible for legal fees and other expenses, and the organization could be blacklisted from future city funding. The city also could seize DIRT’s assets.
The city gave DIRT a deadline of Aug. 7 to respond to a request for detailed financial information about how the funds were spent.
DEDO wants proof that the rent for March, April and May was paid, a complete accounting of the $400,000 from the city and other information related to the loan agreement.
The city also demanded that DIRT provide all its correspondence with Glick about the lease termination. Monthly repayments of the loan were originally set to begin Sept. 1, 2026 at 3% interest.
Actors’ union getting involved
Actors signed onto the show, called Midnight’s Dream, on Dec. 22 and were supposed to start work on Jan. 5. The show’s debut was scheduled for April 10, but production fell behind schedule.
According to an actor’s contract shared with Denverite, union actors were contracted for $900 a week, and non-union performers were contracted at $25 an hour. But the actors were furloughed on April 11.
The cast of 18 included both union and non-union actors.
“At the moment, all I can do on the record is confirm that we always work to enforce our contracts,” wrote David Levy, a spokesperson for the Actors’ Equity Association.
DIRT also faces a lawsuit from a contractor working on the building for unpaid work. Beaver Construction Consulting Inc. alleges that DIRT owes more than $200,000 in construction costs after reneging on an agreement to pay off its bills.
Know more about DIRT? Email reporter Kiara DeMare.