BELFAST – Barring a last-minute solution, a nationally recognized arts school for the handicapped is facing a March 15 auction of its key properties in Belfast, including the city’s former high school, a bakery, a gallery and two private homes, people associated with the matter said Tuesday.

The National Theatre Workshop of the Handicapped bought the former Crosby High School from the city in 1996 and established a Belfast campus as an adjunct to its New York headquarters.

But it is in arrears in mortgage payments to Banknorth Group Inc., said Randy Watkinson, a Rockland attorney representing the bank.

If NTWH can satisfy the debt before the auction, it will retain the properties, which are assessed at about $5 million.

Rick Curry, the Jesuit brother who founded NTWH 28 years ago, said in telephone interviews Monday and Tuesday that the nonprofit school was lining up a benefactor to stop any foreclosure.

“We’re working with the head of Banknorth and we’re getting another person to take the note,” Curry said. “Our benefactors are not going to let [the foreclosure] happen.”

NTWH has had some success in forestalling a foreclosure.

Joe Guimond, a Banknorth senior vice president in Portland, said late Monday that the bank canceled a notice of foreclosure that was scheduled to be published Thursday in a Belfast weekly newspaper. He confirmed that Curry and NTWH were negotiating to fulfill the mortgage debts.

But if NTWH does not pay off its obligation to the bank by next week, a foreclosure notice in anticipation of an auction is scheduled to be published Thursday as well as Feb. 17 and Feb. 24, bank attorney Watkinson said Tuesday.

Neither Watkinson nor Guimond would reveal how much NTWH owes on its loans from Banknorth.

Six properties, including the school, would be sold at auction on March 15 to satisfy the bank debt.

NTWH’s woes also include problems with the Maine Secretary of State’s Office. Although the organization is incorporated in New York, it is required to file a copy of its annual report with the secretary of state.

Andy Mitchell, a clerk in the Secretary of State’s Office, said Tuesday that NTWH failed to file the report and that a letter revoking NTWH’s right to operate in Maine was issued Sept. 8, 2004. On Tuesday, Curry said he was unaware of the secretary of state’s letter.

The theater school is a nonprofit launched by Curry in 1977 to provide the disabled with communication skills needed to pursue careers in professional theater.

It has a studio on the West Side of lower Manhattan and uses the Crosby school in Belfast for summer programs. NTWH uses its art gallery and bakery to teach skills to help the handicapped qualify for work in those businesses as well.

Curry’s work with the school and as an advocate for the disabled has won him national media attention, including a profile on the CBS newsmagazine “60 Minutes.”

The school’s Belfast properties in jeopardy are considerable.

Banknorth holds liens against the former high school at 96 Church St., which is assessed by the city at $3,649,600. It is tax-exempt under NTWH.

Banknorth also holds liens against:

. NTWH’s gallery at 70 Main St., assessed at $710,800.

. Its bakery at 12 Pendleton Lane, assessed at $334,400.

. A single-family house at 58 Miller St., assessed at $171,900.

. A single-family house at 43 Bridge St., assessed at $178,900.

. A swimming pool at 49 Bridge St., assessed at $96,600.

Curry began seeking a Maine campus for the school in the early 1990s. He became interested in the former Crosby school, a three-story brick building in the heart of downtown, soon after SAD 34 abandoned it to the city when the district built a new middle school.

The school, opened as Crosby High School in 1923, last served as a junior high. It was plagued by air-quality problems and an out-of-date layout.

The city sold the school to NTWH for $200,000 in 1996. By some estimates, NTWH invested more than $1 million in the building, converting it into an attractive mixed-use facility with theaters, lounges and a cafeteria on the first floor, classrooms on the second floor, and apartments on the third floor.

In subsequent years, NTWH opened an art gallery on Lower Main Street and an adjacent bakery. The organization also bought the houses and a former church on Court Street. The church is not financed through Banknorth.

In the summer months, NTWH students – handicapped people in their 20s and 30s, some in wheelchairs – are a presence in downtown Belfast.

In its federal Form 990 for 2002-03, required to be filed with the IRS by nonprofit organizations, NTWH reported $2.4 million in gross receipts for the period, which included $2.1 million in contributions, gifts and grants.

Its expenses for the same period were $2.1 million.

The report also stated that NTWH charges nominal tuition for its students, not nearly enough to cover the cost of the classes, housing and food service provided at the Belfast campus.

Should the foreclosure proceed, Tom Saturley of Tranzon, the company hired to hold the March 15 auction, said Monday he plans to market the Belfast properties nationally. He believes the former school, as well as the residences, would hold particular interest for buyers.

“This property in Belfast has sizzle,” Saturley said. “Belfast is not an unknown quantity.”

Each property would be auctioned individually. A $50,000 deposit would be required to bid on the Crosby school, $20,000 deposits would be required for the bakery and gallery, and $10,000 deposits would be required for the residential properties.

Belfast Mayor Michael Hurley said he was aware of the arts school’s dilemma. “I hope it’s a reversible situation,” he said.