The show will go on for 3-Legged Dog, an experimental media and theater performance group in Lower Manhattan that had been on the brink of eviction earlier this year.

The theater’s executive director, Kevin Cunningham, announced Wednesday that his group had—with the help of several local elected officials—reached an agreement with the Metropolitan Transportation Authority, which owns the building the theater occupies. The two sides had been at odds for months over unpaid rent and construction costs.

“We’re definitely glad to have this dispute off of our backs,” Cunningham said. “We’re happy to be able to focus more now on what we do.”

3-Legged Dog, which had been located at 30 West Broadway, near the World Trade Center, until Sept. 11, 2001, moved into a 12,500-square-foot-space owned by the MTA at 80 Greenwich Street the next year. Helped by a $2.5 million grant from the Lower Manhattan Development Corp, the group spent four years and about $1.6 million renovating the space, and finally reopened to the public in 2006.

Things went well for the first two years, but the economic downturn of 2008 and 2009 dealt the theater’s finances a devastating blow. In May of this year, the MTA threatened to evict 3-Legged Dog from its space after the group fell more than a year behind on rent. The agency claimed it was owed more than $306,000.

“What really set it off was the recession,” Cunningham said, noting that the group’s financial support began to dry up in early 2009. “We lost around $1.5 million in philanthropic support over the last 18-20 months. Foundations were losing huge chunks of their endowments.”

Also, Cunningham said, the agency itself was partly to blame for the missing rent checks. The MTA was supposed to reimburse 3-Legged Dog for more than $250,000 worth of construction and utility upgrades the group had to pay for just to make their new space inhabitable.

“If we had been able to recover that money, we would never have been in this position,” Cunningham said. “We’d have been able to weather the recession.”

After months of negotiating with the agency on his own, Cunningham said his efforts received a big boost in the form of intervention from several local elected officials—including Rep. Jerrold Nadler, Assembly Speaker Sheldon Silver, City Councilwoman Margaret Chin—with State Senator Daniel Squadron leading the push for a new agreement.

“I think they were able to bring the MTA to an awareness that we really are a community resource,” Cunningham said. “We bring something of real value to Lower Manhattan, and people really care about what we’re doing.”

According to a joint statement released Wednesday afternoon, 3-Legged Dog will make a one-time, $100,000 payment for rent owed since June 1 on Oct. 15, then pay down the rest of the back rent over the course of the next four years, at 5 percent interest. In exchange, the MTA has agreed to honor the terms of its original twenty-year lease agreement with the theater, and has subtracted roughly $60,000 from the amount owed for construction and utility work the agency should have paid for.

"It was an issue of balance for us,” MTA spokesman Kevin Ortiz said. “We obviously appreciate the importance of this group to the local community, but we also have an obligation to our riders, considering our current financial situation and our need to generate revenue through other means. This deal found that right balance.”