WALNUT CREEK -- One of the Lesher Center for the Arts' anchor companies is exiting the stage, the third performing arts group in the past few months planning to cut back or eliminate productions at the city-owned theater.

The Diablo Theatre Company, which just finished its 54th season, recently announced it cannot afford to stage a 2014-15 season at the Lesher Center, where it has regularly performed shows since the facility opened in 1990.

Festival Opera has already decided not to have a season at the Lesher Center, and Company C Contemporary Ballet is cutting back its schedule at the Lesher and elsewhere.

Diablo Theatre Company is one of the Lesher Center's founding arts groups and typically performs three to four shows a year there. The group cited rising costs of productions at the Lesher as the main reason for a shuttered 2014-15 season. Diablo officials hope this is a one-season break, said Sherry Caraballo Dorfman, president of the company.

The nonprofit used reserves to help pad its production costs in the past. Theater groups rarely make enough on ticket sales to pay for a production and thus rely on donors' gifts, she said. But with costs increasing over the past few years, combined with fewer donations, the group could no longer afford to produce its famed musicals, Dorfman said.

An overall lack of support from the city was also a key factor, she said.

"The Lesher Center is beautiful and fabulous and it was built with the intention that community theater remain alive and well in Walnut Creek -- so it was a good thing," said Dorfman. "But I think it has become not so good now because of a lot of reasons."

Those reasons have been years in the making. Dorfman cites competition from other Lesher-based theater companies doing musicals -- Diablo's bread and butter -- and not getting prime dates for shows at the Lesher, which made ticket sales difficult. Dorfman attributes some of that to the fact Lesher Center Manager Scott Denison, who manages the Lesher schedule, also runs the city-owned theater company CenterRep.

City Manager Ken Nordhoff, speaking on the city's behalf, said it is unfortunate to see Diablo leave, given its cornerstone company status. But he doesn't think the city has been unfair to them or any performing arts companies.

"I want to make sure that everyone feels like they are getting an equal and fair opportunity to do what they want to do at the center -- and I believe they are," he said. "They are our customers and, by extension, their patrons are our patrons."

Walnut Creek spends nearly $800,000 subsidizing the Lesher Center and CenterREP, according to 2011-12 city budget information. But some ask whether subsidizing a theater company with tax money hurts nonprofits that get no government backing.

"What's ultimately happening is the city is putting all of its focus on CenterREP and all of its eggs in one basket and that's not such a good thing for the community," Dorfman said.

It also raises concerns for elected officials.

"This allegation raises a number of important policy questions, including questions of fairness related to the staffing and operation of a theater and theater company with taxpayer dollars," said Mayor Kristina Lawson.

She plans to ask for a briefing regarding the operation of the Lesher Center "so that we can fully understand the impact of the recent decisions of Diablo Theatre Company, Festival Opera and others on the operations of the center and on the city's budget," she said.

The financial effect of the groups' departures on the city is still being calculated, said Nordhoff, noting that arts managers are looking for acts to fill the season.

Nordhoff acknowledged costs at the Lesher have increased over the past few years but wasn't sure by how much.

This situation shouldn't come as a surprise to city officials. In July, the City Council received a presentation detailing how performing arts are funded in Walnut Creek. At that meeting, Dorfman said it cost Diablo $220,000 to produce two shows at the Lesher in one year.

Sara Nealy, executive director for Festival Opera, said they no longer have the resources to put on a full production at the center. Festival, which has had shows at the Lesher for 22 seasons, plans to continue performing at other venues.

Subsidizing the arts "is part of the cost of doing business in a community where there is not enough art funding," Nealy said. "To me every city should invest in the arts and the city is showing what they believe in with where they spend their money."

Many in the community are sorry to see Diablo cancel a season. The Diablo Regional Arts Association has provided Diablo with grants over the years to pay for things such as actors, sound enhancements and equipment to help special flying effects in the company's Peter Pan, said Peggy White, executive director of the association. DRAA is a nonprofit fundraising group specifically for arts at the Lesher.

White hopes to see Diablo back on the main stage soon and cares about companies that are struggling, she said.

"Our focus is to keep the center culturally relevant," she said.

As for Diablo, officials are clear it is not going out of business but will focus on their education programs. Diablo is also planning a "Back to the Main Stage" fundraiser in hopes of producing large-scale musicals again.

Contact Elisabeth Nardi at 925-952-2617. Follow her at Twitter.com/enardi10.