By Rebecca Traister

January 20, 2002 | 7:00 p.m

At 10 a.m. on Jan. 10, GreeneStreet Films' co-founder John

Penotti, 37 and bleary-eyed, slathered ketchup on a turkey wrap in the kitchen of the company's Tribeca office. Titus, his yellow Labrador retriever, tracked the sandwich's every move. Mr. Penotti reached for a baggie filled with white powder. "In a film office 10 years ago, this would have been a baggie full of cocaine," he said. "Now it's vanilla Coffeemate." On the counter was a copy of Variety , which carried a full-page "For Your Consideration" Oscar ad for In The Bedroom, the first movie to which GreeneStreet Films gave a green light. "We have to change our logo," Mr. Penotti said. He was focusing on the minuscule white square at the bottom of the ad. Standing near him was his partner, Fisher Stevens, who showed up in the kitchen. "They shrunk ours," said Mr. Stevens. Mr. Stevens, who is also an actor- Short Circuit, Reversal of Fortune -was recognizably bespectacled and floppy-haired. "Look how big Miramax's is." Miramax distributed In the Bedroom .  "Well, Harvey is a big guy," Mr. Penotti said of Miramax's co-chairman, Harvey Weinstein. "Bigger than us." Then Mr. Penotti and Mr. Stevens, shoulder to shoulder, copped Hans-and-Franz tough-guy poses. In The Bedroom is 2002's quality sleeper, what You Can Count on Me was last year. An honest, brutal family drama starring Sissy Spacek, Tom Wilkinson and Marisa Tomei, and directed by a first-time feature director, Todd Field, the film had the pedigree, reviews and general grown-up feel to take charge of the art-house market in Oscar season. And it has: In the Bedroom has landed near the top of the winter's short must-see movie list. It has also installed GreeneStreet Films as a comer in an otherwise disastrous year for New York's film industry. GreeneStreet has been quietly developing movies and keeping a low profile since its inception five years ago. "It puts a lot of pressure on us, and on our investors," Mr. Penotti said. It's a lesson that he and Mr. Stevens-who has spent a decade living down the hype he earned 12 years ago for being a promising actor and the boyfriend of Michelle Pfeiffer-learned well. "We've been waiting," Mr. Stevens said. "We were waiting for something good to happen." In the Bedroom -about the disastrous fallout of an affair between a college student and married woman-was adapted from Andre Dubus' short story "Killings" by Mr. Field. With Miramax marketing behind it became the small, deeply felt movie of the year. With astonishing performances by Ms. Spacek, Mr. Wilkinson and Ms. Tomei, each of whom has a shot at an Academy Award nomination next month, as does Mr. Field for writing and directing, the movie became the art-house hit of the year. GreeneStreet suddenly found itself in an extremely hot spotlight. Which makes sense for a company housed in a converted lighting factory on Desbrosses Street. GreeneStreet's lofty space is held up by weathered wood columns and filled with stubbly film-school grads and lithe assistants. Its two floors of offices are already home to a passel of renters ("buddies" is Mr. Penotti's film-mafia euphemism): writers Jon Robin Baitz and Frank Pugliese, actor Rob Morrow and actor–director Griffin Dunne. Actor John Turturro, who had Illuminata production offices here, said he's considering setting up shop here again, and Bruce Willis' New York production office is in the building. Matt Dillon will soon move in. There's also a P.R. firm (Mara Buxbaum's I/D Public Relations); Track 9 Recording Studios; Red Scare special effects; Mr. Stevens' Naked Angels Theater Company; as well as post-production suites and production office space. All in all, the troupe adds up to a kind of triple-A threat to the Tribeca Film Center, Robert De Niro's converted coffee-factory Death Star, just three blocks south-not to mention the unspoken name of Miramax. The two companies are structured differently. Miramax started out 20 years ago as a distributor, then began making its own pictures. GreeneStreet produces pictures and gets other companies, such as Miramax, to distribute them. The two companies have one thing in common, however. They each have a kind of family, a stable-in Mr. Penotti's terms, "buddies": in-house actors, writers, producers, flacks, sound– and special-effects teams that function as an ad-hoc, miniature version of the studio system. New York, said Mr. Dunne, has "never been a real film community, like in Los Angeles. So it's nice to have a mini-studio, with a little commissary." Mr. Dunne directed Lisa Picard Is Famous , GreeneStreet's first release, a mock-documentary tracking the burgeoning careers of two starving actors. It was released to warm reviews. "It was also released on Sept. 14," said Mr. Stevens. "No one saw it." GreeneStreet's next two films were the Benjamin Bratt vehicle Piñero , which received pretty spectacular reviews for the actor, and In the Bedroom . "It was the first thing we technically committed money to, and it was after every other studio and every financier had passed," Mr. Penotti said with a broad grin in one of GreeneStreet's brightly lit conference rooms. Mr. Penotti had gotten started as a production assistant and assistant director to Sidney Lumet on five films, including one produced by Mr. Dunne, who also gave Mr. Stevens his first acting role, as "one of the Jewish kids who's too nerdy to go out with Rosanna Arquette" in John Sayles' 1983 Baby, It's You . In those early days, Mr. Stevens was being touted as the Next Big Thing-an energetic, promising character actor whose Naked Angels theater group generated conversation. He was also, in either a Woody and Diane or Julia and Lyle kind of matching, the unlikely beau of Michelle Pfeiffer. But his career sputtered out sometime after Short Circuit 2 , and his girlfriend wound up married to Ally McBeal creator David E. Kelley. "I think I made a lot of mistakes," said Mr. Stevens. "I turned down jobs, I was trying to be an artist. Now I'm in a place where I feel more grateful, and respect and appreciate any kind of success." Mr. Stevens and Mr. Penotti, friends for a decade, founded Madcap Films in 1996 in tribute to their hero: writer, director and producer Preston Sturges. "We had a hard time getting people to take us seriously with a name like Madcap, and the time it was taking to explain the Sturges reference was just not worth it," said Mr. Penotti. Madcap shared Sixth Avenue offices with the Shooting Gallery, the company that made Slingblade and was a mainstay of New York's independent film world until its ugly 2001 bankruptcy, which included allegations of dirty bookkeeping by its co-founders. "It was a very big lesson to us," Mr. Stevens said of the Shooting Gallery's demise. "We really liked those guys. They tried something audacious." In early 1997, Madcap moved to an office on Greene Street, where they changed their name. A year later, they set up shop in the raw Desbrosses Street space, and began to build GreeneStreet's film center. The company was originally backed by arts patron and Jones Apparel Group chief Sidney Kimmel. "He was great for our development phase," Mr. Penotti said. Though Mr. Kimmel is no longer a GreeneStreet investor, both partners were careful to emphasize their good relationship with their original sugar daddy. Their investing partners of the past two years, whom Mr. Penotti and Mr. Stevens described as "extremely private," are Louis Bacon, Christopher Pia and Michael Garfinkle, three principals from the Moore Capital Management hedge fund who took personal positions in GreeneStreet. Mr. Bacon, the futures and currency trader, was in his single days a fixture on New York's club scene, but has since become increasingly reclusive and increasingly wealthy. The company has three more films slated for release in 2002. There's Just a Kiss , a feature directed by Mr. Stevens, starring Ms. Tomei. It was purchased by Paramount Classics and will be released this summer. The Château , starring Paul Rudd and directed by Jesse Peretz (son of New Republic publisher Marty Peretz) will be distributed by IFC in March. Then there's Swimfan- "We're changing it," Mr. Stevens said grimly of its title - a teen thriller starring Traffic 's Erika Christensen and Bring It On 's Jesse Bradford. "We didn't want the girl from 90210, " Mr. Stevens said, dating himself. "Or Buffy, " Mr. Penotti added quickly. The film was just purchased by 20th Century Fox 2000 and will be released in the summer.  This year, GreeneStreet will go into production on a 70's coming-of-age film, The Italian , with GreeneStreet tenant Frank Pugliese directing. And Molly Gunn 's production offices will soon move in. The film is about an Upper East Side socialite who takes a job as a nanny to earn the respect of her boyfriend. Mr. Dillon will star in the GreeneStreet project Tough Guy: The Eddie Maloney Story . If there's one consistency within the GreeneStreet crew-Ms. Tomei, Mr. Dillon, Mr. Dunne-it's of being, like Mr. Stevens, hype victims who never quite lived up to their imagined star potential. "It's not like we're looking to reinvent people's careers," said Mr. Penotti, acknowledging that many in the stable have been around the Hollywood block. "We're just looking for people to work with who are very talented, and let their work speak for itself. "These people are artists who have integrity," said Mr. Stevens-who said that running the company has "killed my acting career." "We've all done terrible movies, sure … but there is a sense with these artists that they are not just trying to become stars, and have really struggled to make the right choices, to do art and make a living. Now hopefully we can provide them with a place where they can do both."