The auction of The Capitol Theatre that had been announced for 10 a.m. Thursday is still on schedule.

As reported in late May, the auction on the steps of the Greene County Courthouse is the final step in a foreclosure procedure relating to a two-year delinquency in mortgage payments owed by the Little Theatre of Greeneville, Inc. to the Rural Development Agency, a part of the U.S. Department of Agriculture.

The payments relate to a $500,000, 39-year loan made to the Little Theatre of Greeneville in January 2002 to enable the community organization to complete a major renovation of the theatre.

The organization owns the theatre property, except for a small part of it which is leased from Farmers Insurance Company for a dollar a year. That section of the current Capitol Theatre was used to expand the existing space somewhat in the onetime movie theatre, which dates from the early 1930s.

The total cost of the renovation was $2.2 million. Most of the funds were contributed from the community through a multi-year fund-raising campaign led by the late Harrison Lamons, a longtime leader in Little Theatre.

Jennifer Yeip, current president of Little Theatre of Greeneville and a daughter of Lamons, said today that an LT fund-raising effort in recent weeks designed to raise enough money to prevent the sale had produced about $25,000.

The amount, she said, is short of the approximately $78,000 she said she was told was needed to bring the organization current in its mortgage payments on the loan.

She has explained that, although the Little Theatre has been meeting its operating expenses for some months now, the annual mortgage payments on the loan have proved a struggle.

She said in May that she had thought last fall that sources of funds to meet the mortgage obligation had been found, but those sources unexpectedly fell through, apparently because of the overall economic difficulties the country has experienced in the last year.

She has also emphasized that the RDA has been very helpful and supportive of the theatre.

A local RDA spokesman said this week that, unless the delinquency can be met before the sale, the scheduled auction is required to proceed.

If the necessary minimum amount is not bid, the spokesman said, the agency itself will take possession of the property, lock it, and begin the procedure involved in selling it.

The spokesman indicated that the agency was not eager to proceed with the foreclosure but had no choice under government regulations on such matters.

Yeip said that, if the organization loses the Capitol, the current production, "Kilroy Was Here," will be shifted to Annie Hogan Byrd auditorium at Tusculum College for its final few performances this weekend.

The long-scheduled play opened on Friday, June 20, for two weekends.

Long-term, she said, if the result of the auction should be that The Capitol is no longer available for use by the theatre group, the organization would probably try to rent space at the Annie Hogan Byrd for future Little Theatre productions.