Waterford - It's been called a rare jewel of the community and a feather in the town's cap.

And to this day, Eugene O'Neill Theater Center executives often use the word "magical" when describing the O'Neill experience.

By year's end, though, the theater's Great Neck Road campus could have quite a different look as plans for a proposed expansion move forward.

The O'Neill is moving closer to approval of a roughly $15 million expansion project that ultimately will allow the theater to double the student body of its renowned National Theater Institute, which was founded in 1970.

By doubling the NTI capacity - currently about 30 to 35 students per semester - the theater will boost its bottom line considerably and could double its $3.2 million budget, according to Executive Director Preston Whiteway. A 14-week, intensive semester at the NTI costs roughly $20,000, and tuition is a large part of the theater's revenue.

The planned two-phase expansion will allow the NTI to add a program in musical theater training, which it does not currently offer.

"We think it can be transformative and very beneficial to American theatrical education," Whiteway said of the musical theater training. "The O'Neill has reached capacity in its existing residential and rehearsal space. In order to accommodate this program we need to expand the campus."

The O'Neill is seeking donations from alumni and various foundations and organizations to pay for the expansion. Whiteway said at a recent Planning and Zoning meeting that the theater has raised about half of the $5 million it needs to complete its proposed first phase.

That phase will aid students by adding seven cottages and a rehearsal space and revamping an existing rehearsal area.

The phase also calls for a new unified sewer system at the campus. The current buildings work on separate septic systems.

The planned second phase includes a new dining hall, a new small theater and an increased endowment for the NTI, Whiteway said. The theater hopes construction on the first phase will begin later this year and the two phases would be completed over roughly three years.

The proposed expansion has moved through the town's Conservation Commission and went before the Planning and Zoning Commission last week. That commission had a few suggestions on proposed parking spaces and will review the plan again in the near future.

Whiteway said the theater has made it a point to work with the town on the proposed project, which was scaled back from an earlier version that would have required more space and called for more cottages.

Completion of the cottages, which will be used as dormitories, would be a priority so that the NTI could accommodate more students, architect Chad Floyd told the Planning and Zoning Commission. Floyd, of Centerbrook Architects and Planners, also said the project proposal includes a lot of input from the town.

"In a number of ways, we've tried to be responsive to what we've heard from the neighbors and the community," Floyd said. "We've done a number of things in terms of the layout to improve the way the site works from the point of view of drainage and weather."

The O'Neill sits on town-owned land, and in 2010 the town agreed to a 40-year lease with two 10-year options with the theater.

The O'Neill provides the town with 1.5 percent of the tuition from the NTI and 15 percent of the box office receipts from its summer performances.

Whiteway said the O'Neill went through financial difficulties years ago - around the time he came on in 2004 as the theater's general manager. But an increase in demand in the NTI has helped, and in 2006 the theater's board of directors and executives came up with the expansion plan as a way to help the O'Neill move forward.

First Selectman Daniel Steward was supportive of the proposal in a recent interview, although he added that its success would depend on the O'Neill's fundraising.

Tom Viertel, the chairman of the board of directors for the O'Neill, said the theater has received significant contributions from its donors.

"This is a one-time chance to ramp up the O'Neill," Viertel said. "Because tuitions are the principle driver of the O'Neill's earned income, it is critically important that we find ways to expand our ability to educate and grow that segment of what we do."

jeff.johnson@theday.com