No second acts in showbiz? Maybe not. But the Source Theatre saga may yet prove the old adage wrong.

When news broke in early February that the defunct, debt-plagued Source Theatre Company had signed a deal to sell its 14th Street NW playhouse to the restaurant-management firm behind Bedrock Billiards, theater boosters were flabbergasted. Pool tables and happy-hour specials in a space that had showcased everything from George Bernard Shaw to a political comedy called Angel Shit? A venue that had incubated hundreds of theater talents, from hometown favorites to Marcia Gay Harden?

Petitions and protest flyers sprouted like spring fungi, and online forums and theater lobbies both buzzed with outraged accusations that the Source board, which hadn’t shopped the space around to D.C.’s hordes of space-hungry arts organizations, had pulled a stealth sale that would protect board members from the IRS and other creditors at the expense of a community already short on performing-arts spaces.

But all the uproar seemed for naught: The deal was done, the deposit money was in the bank, and as one Bedrock Companies executive told the City Paper in February, “the only thing left is to show up for closing.”

Then the local Advisory Neighborhood Commission raised its hand and said, “Ahem.”

After ANC 1B figured out that the sale wasn’t final, learned that the District government had invested nearly $1 million in the Source space as part of an arts-diversity effort, and had a couple of dozen activists show up, several of them actors in theatrical costume, to its March meeting, it voted to oppose the sale—and urge Mayor Anthony Williams and Ward 1 Councilmember Jim Graham to enlist the District Attorney General to try to stop it.

District officials can’t wave a wand, of course. But they can twist arms—and Graham did, at a kind of Source summit convened at his offices on March 23. Observing, half-jokingly, that the Source board was in essence preparing to sell a building it doesn’t own—the city holds a mortgage, and no payments have been made on it since 1998—Graham suggested pointedly that Source and Bedrock come up with what he called a win-win-win compromise: A sale at a price that would let Source pay its debts but leave Bedrock able to afford a two-story addition that would make room for a new 150-seat theater above the restaurant. (That presumably rules out the $2.8 million price in the current contract.) The city, Graham suggested, would be willing to help make such a deal happen, by forgiving the mortgage and scaring up some development assistance.

So Bedrock’s back at the drawing board—or will be, when its top two executives return to the office from vacations this week. In a March 30 statement, Source board chair Peggy O’Brien described the Graham meeting as “a frank discussion exploring options to meet multiple objectives,” and confirmed that it “ended with all parties determined to work towards a mutually agreeable solution.”

“[W]e do not yet know if this new scenario can and will work,” she cautioned, but “both Source and Bedrock are energized by this possibility.”