One unexpected result of the current economic crisis: The Twin Cities lost its only place to play dildo bingo.

The venue that regularly hosted the event, Pi Bar and Restaurant in Minneapolis’ Seward neighborhood, closed Saturday night with a raucous, packed dance party.

It’s more serious than the loss of a game, though. Pi’s closing means around 40 people are out of a job, it means the owner is saddled with around $400,000 in debt and it means that the diverse community that flocked to the bar — lesbians, gay men, progressives and punks, among others — have lost a unique and beloved venue.

Wednesday evening, Pi owner Tara Yule and bar manager Benny Benson cleaned the building they spent five months rehabbing and almost two years operating. They’re preparing to return the building to its former owner at the end of November.

Although Pi was widely known as a lesbian bar, employees in recent months had tried to broaden its reputation by merging elements of the traditional bar scene with more politically active scenes.

“In the last six months we made a huge push to come out as a queer bar because that’s really who we were,” Yule said. “We brought pieces of bar culture and the individuality of bar culture to the political organizations.”

In this way, Benson said, Pi became home to all sorts of people.

“I think it challenged people that probably didn’t get challenged very often,” Benson said. “[There was] an overall feeling that you’re going to be OK and that we can all be together in the same place.”

“The perfect storm”

Sitting in the warehouse-like back office, Yule is illuminated only by a computer screen and standing lamp. The lights in the office ceiling died recently.

“It’s like the building was holding on just for us,” she said.

Yule predicts the bar would have gotten out of the red by the end of this year. Still, she was unable to get a loan by the end of November when a payment was due toward the purchase of the building.

Yule bought the property on Sept. 16, 2006, on a two-year contract for deed.

“You put a down payment down and you get a certain amount of time to open your business, get it up and running and then to go look for a traditional mortgage,” she said. “The contract owner finances you basically for a couple years until you can get traditional financing.”

Just at the time Pi needed to get a loan from a bank, the mortgage crisis hit.

“The economy did happen to crash at the absolute perfect time for us to not get a loan,” bar manager Benson said. “It’s the perfect storm.”

As an added challenge, Small Business Administration loan standards became even more stringent, Yule said.

“Before we even got in the doors to three banks they told us they’re not loaning to bars and restaurants because it’s the highest risk industry,” Yule said. “I had some banks go as far as they could with me and try to put some time into it and eventually we were rejected by the banks’ boards.”

As the economy worsens, banks have become more reluctant to give out loans, Carlson School of Management finance professor Andrew Winton said.

“The fact that banks aren’t lending makes the economy even weaker because people can’t borrow to spend and businesses can’t borrow to invest,” he said. “The banks look at it and say ‘gee, the economic environment is weaker, loans are more risky, let’s make even fewer loans.’”

The money from the recent bank bailout is largely being used to cushion banks against losses they’re already facing, rather than giving out new loans, he said.

“I wouldn’t expect bank lending to rebound a lot until the economy kind of bottoms out,” Winton said.

“Community outcry”

After Yule announced Pi would be closing on Oct. 21, some regulars at the bar approached her about fundraising.

“It just came from the community outcry and disbelief that it was going to happen,”

Joni Thome , a Minneapolis lawyer who fundraised for Pi, said. “The business was really coming into its own being, it had found a niche, and it was filling a void.”

In 10 days the fundraising crew raised $130,000.

“I’ve received checks in the mail every day since then,” Yule said.

Unfortunately, the money wasn’t enough; the payment due at the end of November was $680,000.

The owner of the building is MicroVoice Applications , which has its world headquarters in Minneapolis. It rejected two offers to buy the building, Yule said.

When she moved in, the building was a wreck, Yule said. She spent more than $400,000 renovating the former American Legion: New roof, five heating and cooling units, a new water main, a sprinkler system, new plumbing and a new electrical system, among others.

“We just spent months chipping away moldy sheetrock away from the walls,” Yule said.

The improvements will be retained by MicroVoice Applications, according to law. Yule, whose home mortgage has tripled because of debt, will have to file for bankruptcy.

Sweeping up

Piles of glass and debris, much of which was from Saturday’s closing party, Benson said, were swept into piles in the main room near the bar Sunday morning.

She described the reaction of regulars as “like a drawn out funeral.”

Employees stayed in the building until noon the day after the closing party, Benson said.

“People just huddled and cried because no one wanted to leave,” she said.

Closing Pi with Yule, who she accompanied on the first visit to the building, seemed to bring the endeavor full circle, Benson said.

“[Pi] changed my life; I’m not even recognizable,” Benson said. “I’m going to leave and I’m going to take everything from this experience and have the most awesome life ever.”