1) The Mark Hellinger was a movie theatre when it opened and therefore has a substantial lobby which was used to impress the people waiting for the next performance. In the 1920's, huge lobbies were the rage. On Broadway (west, I guess) in Los Angeles, some of the bigest theaters in the world have lobbies you could play football in.
2) Many New York theaters have no lobby because when the were built, shows often played several performances a day (or continuously, in the case of Vaudeville) and people just bought a ticket and walked in and stayed until the show cycled back around to where they came in (the origin of that phrase, BTW). The legit houses didn't have huge lobbies because the audience liked to mill around outside and watch the arrivals of the rich and famous, then rush in - usually during the overture - to take their seats.
3) I love the Shubert. It's such an amazing theater and so, so storied. You are out on the street, you walk through a door and BAM you're inside with the great history of Broadway; all the amazing shows that played there.
4) Canny producers actually liked houses with little between the audience and the people out on the street. They would open the doors as soon as the curtain dropped and ensure the curtain calls were visable to passers by, as if to say "look what you missed." It's like fast food restaurants that vent the cooking smells onto the street IN FRONT of the restaurant to entice passers by.
5)Before the curtain went up during "Hellzapoppin" in the 1930's, a Western Union Pageboy would walk through the audience, trying to find "Mr. Gedalfin" (name chosen so that, hopefully, nobody would reply) trying to deliver a small potted plant. Several times throughout the show, the kid would walk through the theater calling "Message for Mr. Gedalfin..." each time, the plant got larger-and-larger. At the end of the show, the audience filed out of the theater through the lobby, where an ENORMOUS potted tree was punked down, with the pageboy high up in its branches, still tiredly calling out for Mr. Gedalfin....
(see, it really was a lobby story)
http://www.broadwayworld.com/board/readmessage.cfm?thread=972787#3631451
http://www.broadwayworld.com/board/readmessage.cfm?thread=963561#3533883
http://www.broadwayworld.com/board/readmessage.cfm?thread=955158#3440952
http://www.broadwayworld.com/board/readmessage.cfm?thread=954269#3427915
http://www.broadwayworld.com/board/readmessage.cfm?thread=955012#3441622
http://www.broadwayworld.com/board/readmessage.cfm?thread=954344#3428699