Aug. 23—Citing the COVID-19 pandemic among its growing pains, the nonprofit New Spire Arts is dissolving and handing over operation of its theater to the city of Frederick.

The mayor and Board of Aldermen on Thursday signed an agreement with the Ausherman Family Foundation to take over the New Spire Arts Stages theater at 15 W. Patrick St., according to a city news release.

The city will lease the property for $100 a year from the foundation for a three-year lease term and The Weinberg Center for the Arts will handle the operations, documents associated with the agreement show.

The foundation will provide a $160,000 grant to the city for each year of the lease to cover operating costs, according to the memorandum of understanding. New Spire Arts is transferring its assets to the city.

Aldermen Kelly Russell, Derek Shackelford and Donna Kuzemchak voted in favor of the lease agreement and memorandum of understanding, city voting records show. Aldermen Katie Nash and Ben MacShane were absent.

Leigh Adams, executive director of the Ausherman Family Foundation, said New Spire Arts experienced "growing pains" and the COVID-19 pandemic "didn't help."

"Any time you start a new nonprofit, you always run into struggles," Adams said in an interview Monday.

New Spire Arts was founded with a grant from the foundation in 2016, then the theater opened in January 2019, according to New Spire Arts' website. The foundation put nearly $2 million into renovating the theater's building, according to Adams.

New Spire Arts Stages features a 300-seat black box theater. The theater is next to Maryland Ensemble Theatre and across the street from the Weinberg.

When New Spire Arts Stages opened, "the hope was that the unique space would catalyze the performing arts scene and attract new audiences to the downtown theater district. But with the onset of the pandemic, NSAS found itself struggling to bring patrons into the space on its own," the release from the city said.

The Weinberg and Maryland Ensemble Theatre stepped in to help. The organizations managed New Spire's staff, marketed events and provided financial leadership, according to the city's release.

"This was an effort by the Theater District Collaborative, made with the reasoning that a high tide lifts all ships," Chris Colville, president of the board of directors of New Spire Arts, said in the release.

Adams said in an interview that the Weinberg arose as a natural partner to ensure New Spire's mission lives on past the existence of its nonprofit.

"This makes the most sense," Adams said. "We think it's a good thing for the entire theater district."

John Healey, executive theater manager for the Weinberg, is optimistic about the partnership.

"The opportunity is great," he said in an interview Monday.

New Spire Arts Stages provides a more "intimate space" compared to the 1,200-seat house at the Weinberg, Healey said. Some acts, such as emerging artists, can be better suited to a smaller venue.

Theater patrons can look forward to seeing the Tivoli Discovery Series at New Spire, which highlights emerging artists. Chatham Rabbits, an Americana music duo, is also slated to perform, according to Healey.

He envisions quartets, comedy acts, spoken word and one-person shows for the black box theater. New Spire Arts Stages may be the place for up-and-coming talent, he said, who then return and fill the Weinberg.

Healey hopes the full lineup for New Spire will be announced soon. There were artists lined up that could not be put under contract until the memorandum with the city was approved, he said.

Over the past year, while New Spire lacked an executive director, Healey said, the Weinberg and Maryland Ensemble Theatre offered a helping hand.

"That's how we laid the groundwork for what has come to be," he said.

Healey's goal is to make New Spire Arts Stages artistically viable and fiscally responsible. He sympathized with the fledgling nonprofit's struggles and recalled hurdles the Weinberg faced when he came on board in 2006.

Adams described the Weinberg as an "amazing gem" with staff members who have the know-how to help New Spire Arts Stages. She said she is "thrilled" by the opportunity.

After the three-year lease, the city may move to purchase the entire building, according to Healey. He said the goal is for the Weinberg to take over New Spire Arts Stages completely.

"It's a new canvas for us all," Healey said.

Follow Mary Grace Keller on Twitter: @MaryGraceKeller