A burglary last June and thefts at the Palo Alto Children's Theatre are linked to the investigation of financial crimes that caused the City of Palo Alto to close the beloved institution late Thursday, according to Police Chief Lynne Johnson.

The theater reported a printer, cash, coins and checks stolen on June 18, 2007, but additional equipment was also discovered missing, Friends of the Children's Theatre board member Dan Conway said Friday.

"We've had some very expensive equipment that has been lost or stolen," board member Ken Freiberg said. "It was a big, huge surprise."

Conway, however, said he didn't think the equipment was that expensive.

Friends Treasurer Justine Franklin and board President Paula Collins said they knew of only the one burglary last summer.

The Friends, a support organization founded in 1970, did buy the theater group a digital camera to replace one that was stolen, Franklin said.

The burglary was notable for two reasons, board member Szonja Szelenyi said. First, it revealed that the theater's doors didn't lock properly.

"It was very easy to come in by manipulating the front handle," Szelenyi said.

In addition, the thief or thieves targeted video equipment that wasn't easy to find, she said. She called the theater interior "a complete disaster" -- both before and after the burglary.

"These people have been at it for, like, forever, and they have amassed all this stuff," she said. "Most of us would have had a really hard time finding anything. A lot of people thought it was an insider job."

But the theater was also easy to get into, with many people passing through, Szelenyi said.

After the burglary, the theater group tightened its controls on cash, Szelenyi said, recalling the extra work she had to put into counting money following a post-burglary hot dog sale.

Johnson said she "wasn't at liberty to say" if the financial crime was linked to gifts from the Friends.

Around 3:30 p.m. Friday, at least five investigators wearing blue gloves flipped through folders and other materials in the cluttered theater office at Lucie Stern Community Center at 1305 Middlefield Road.

Late Friday afternoon, Johnson said she could not announce if the investigators had found anything.

"We're trying to get it done as quickly as possible, but it's very complicated," Johnson said.

The theater's staff have been put on administrative leave, City Manager Frank Benest said. According to the city's budget, the theater has 7.5 fulltime equivalent employees, with at least five fulltime staff members.

The theater has been led by Patricia Briggs since 1961, with Michael Litfin as assistant director for the last 32 years. Briggs earned $104,000 and Litfin earned $103,000 in 2006, according to city records.

Both are highly esteemed in the community.

"My experience with at least the two directors (Briggs and Litfin) is they are as dedicated to theater and kids and the public as I've ever seen," said architect John Northway, who designed the outdoor stage and took part in productions when he was a child.

"I'm concerned for them and concerned about the theater," he said.

Briggs and Litfin could not be reached Friday. Litfin has been battling cancer and recently underwent chemotherapy.

Mayor Larry Klein challenged Benest's decision to close the theater and sent the city manager a note Thursday.

"I think we have an obligation to the community to get the theater open as soon as we can," Klein said. Both of Klein's sons participated in theater productions and his son Tony served on the board of the Friends of the Children's Theatre several years ago.

The mayor also noted the investigation seems to implicate the entire staff, which has been placed on administrative leave. "It's unfair for innocent people to be tarred with this brush," Klein said.

"The people who run that theater are pillars of the community," board member Conway said.

He called the closure "very abrupt."

"We were surprised as much as you are," Friends board member Cy Ashley Webb said Friday.

Johnson said the investigation has been ongoing for several months. Nothing new had happened this week to trigger the closure, she said.

"It's a police department investigation; we haven't audited lately," City Auditor Sharon Erickson said Friday.

The Children's Theatre has an annual budget of $1.23 million, although it only generates $293,000 due to ticket sales and program fees.

In 2005, the most recent data available, the Friends spent $106,300 on advertising, rehearsal hall furniture, new computer equipment for a video lab and on hot dogs, among other items.

The Friends reimburses the theater for expenses and purchases equipment and advertising on behalf of the theater, but it does not usually just write a check to the group, Treasurer Franklin said.

A production, "The Giver," based on the Newberry Award-winning children's book, was scheduled to open Feb. 1. It has been in rehearsal for weeks.

Collins said Friday the show is her priority.

"My concern is mainly the kids. The show needs to go on," Collins said.

The board planned to meet Saturday to discuss the situation.

Outside the theater Friday afternoon, the 13-year-old Jordan Middle School student who plays "Fiona" in "The Giver" -- who said she could not provide her name -- said she is disappointed and doesn't know what is going to happen.

"I want it to be as it was," she said.

Ironically, the story "tells of a world with no poverty, no crime and no sickness, where everyone is happy," according to the performance-schedule blurb.

Curiousity and surprise swept through the community as news of the closure and investigation spread Friday.

Benest said that the city staff will be working through the weekend to develop a plan to reopen the theater. He said he hopes a plan will be ready by Monday.

"It is our goal to reopen the Children's Theatre as soon as we can," Benest said. "We have to figure out a way to do that."

Benest added that he understands how valued an asset the theater, which celebrated its 75th anniversary last year, is to the city.

Benest would not comment on the status of "The Giver."

"I would hate to speculate about that," Benest said.

On the online forum Town Square, at www.PaloAltoOnline.com, people identifying themselves as cast and production members of "The Giver" have said they received calls Friday from "the Theater" about the show. According to one person identified as "Adri," Friday and Saturday rehearsals have been cancelled; however, "they hope to have the show ready in time."

With Children's Theatre closed, some in the community have suggested finding another venue for "The Giver."

However, the neighboring Lucie Stern Theatre is already booked solid: Palo Alto Players' production of "Copenhagen" plays through Feb. 3, and West Bay Opera starts loading in the set for "Cosi fan tutte" right after that, said Kenneth Spicer, operations manager for Palo Alto Players.

"It would be very unusual for the Lucie Stern to have any dark time," he said.

Two other productions have also been affected by the shutdown.

"Stuart Little," which would have been performed in local schools, was also in rehearsals and was scheduled to open Feb. 7. Another production had auditions planned.

A year ago, the Children's Theatre observed its 75th anniversary with a major celebration, on which the Weekly based a cover story Jan. 19, 2007.

• Read the Jan. 19, 2007, Palo Alto Weekly cover story about the theater's 75th anniversary

To join the discussion about the Children's Theatre, go to Town Square.