But a mayoral candidate says the plan is "unrealistic" and the Dunedin City Council has other ideas about professional theatre.
Karen Trebilcock said her first goal was to stop the council taking it to a vote to sell the premises, which has been inactive since 2018.
The council recently took the Fortune Theatre off their strategic asset list, which allows the council to discuss selling it.
The council also has about $17 million set aside in its long-term plan to help strengthen and upgrade community and professional theatre in Dunedin.
Ms Trebilcock said the Fortune Theatre was "staring the council right in the face, and they choose to ignore it".
She had been granted permission by council staff to inspect the interior of the Fortune Theatre yesterday.
"I don’t think people were fully informed or even knew what it was like inside.
"They were told that it was mouldy and damp and there were holes in the floor — and we’ve seen [yesterday] that it’s not like that at all."
Ms Trebilcock said she believed if her group could seed $500,000 then they could get under way with a "six-month plan" of refitting the theatre.
Her plan for the theatre was to turn it into a 180-seater, and upgrade the interiors to host local and professional productions.
Cr Carmen Houlahan, who is running for mayor, said Ms Trebilcock’s plan was "totally unrealistic".
Selling the Fortune Theatre had not come up as an option before the council yet, but she expected staff to prepare a paper outlining all the options very soon.
"I certainly was devastated when the Fortune Theatre closed down and I’m nostalgic about it.
"However, moving forward, the Fortune, in all reality, is not a realistic building any more for theatre. It’s always had a problem with mould."
Ms Trebilcock said there had been "discussions" with Dunedin Venues Management Ltd, which runs Forsyth Barr Stadium and the town hall, about possible co-operation and event ideas.
"Having Dunedin Venues, which also run the Town Hall, doing the ticketing and the admin would certainly help the budget."
In the past playwrights such as Roger Hall, A.K. Grant, Tom Scott, Anthony McCarten and Greg McGee had hit shows with the theatre.
Cr Houlahan said there would be plenty more opportunities through the council’s upcoming investment in venues such as the Athenaeum and Playhouse Theatre, along with available seeding funding for professional theatre groups.
"That will create work for the sector and work for people that are involved in those projects, and see us through to the next 20, 30, maybe 40, 50 years.
"The future’s looking very bright."
Southern Heritage Trust member and council candidate Jo Galer said the trust would consider whether to officially support the Fortune Theatre project.
However, the issue spoke to a lot of people’s concerns about keeping the city’s heritage, she said.
"It’s a Heritage NZ category-one church that was converted into a very quirky and very cool theatre that a lot of audiences absolutely miss like nothing else.
"I think it’s worthwhile that we at least implore the council to reconsider the need for this."
Ms Galer acknowledged there would be "a lot of work" to bring the theatre up to standard — which meant removing all the mould.
"So we’re realistic about it, but let’s just try. And I think that’s what this visit [yesterday] was all about — it was reconsidering it before it’s too late."
Dunedin Mayor Jules Radich said there were a number of options on the table in the long-term plan which pertained to theatre, but the Fortune Theatre had been taken off the register.
The building had been "cleared out and cleaned up", he said.
