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A plan for a new 800-seat theatre in Dunedin has been rejected in a report, which instead recommends the city's theatres be overhauled at a cost of more than $14 million.
The report leaves the future of the Athenaeum building, which the council bought in 2007 in part to provide for a new theatre, unclear.
The report writers, Deloitte, and a "touchstone group" of Dunedin arts personalities used for consultation, did not all agree with the finding an 800-seat theatre was not needed.
But Regent and Mayfair theatre trust heads were delighted with the recommendation to spend money upgrading the theatres.
A council report late last year proposed a theatre be built at a cost of between $17 million and $35 million, depending on the final size, with annual operating costs of up to $500,000.
The council decided in a close vote in January to order a report on the proposal, despite some arguing the budget was stretched, and there was no more room for large capital projects.
That report was released this week, and will be debated on Tuesday by the community development committee.
It concluded the best option for the city was to modify existing theatres.
"We do not believe the construction of a purpose-built mid-size theatre can be justified in Dunedin."
It noted the population of the city's catchment area was only 150,000.
"In addition, we are not able to identify a significant number of touring shows that Dunedin was currently missing out on.
Therefore, we believe the 'gap' is not sufficient to warrant constructing an additional theatre."
The report writers also believed building a new theatre would have "a significant impact" on the financial feasibility of other theatres.
The report suggested three options:A new theatre.
Modify existing theatres to meet the technical and performance requirements of promoters, performers and audience.
The status quo.
Option two recommended an upgrade of the Regent Theatre include alternative seating configurations to reduce capacity for shows that were too large for the Mayfair but did not require a theatre the size of the Regent.
It also recommended money be spent on the Fortune Theatre, though how much was not known.
Otago Theatre Trust chairman Michael Shield agreed with the report's finding an 800-seat theatre was un- necessary.
"I don't see how it would be viable, given the number of performance nights in Dunedin."
There were ways to successfully create a smaller space in the Regent, and those would be investigated as part of a redevelopment the trust was planning.
Former May- fair Theatre Trust chairman Les Cleveland said he thought the recommendation to spend $7.3 million upgrading the theatre was "wonderful".
It would allow the Regent and Mayfair to be the two main theatres, and the Mayfair badly needed an upgrade.
Incumbent trust chairman Geoff Patton was also delighted with the recommendation.
Peter Entwisle, a member of the touchstone group, said he supported spending on the Mayfair and Regent, but said Deloitte had concentrated on a "greenfields" site, and had not considered the option of the council buying the former His Majesty's Theatre, now Sammy's.
While that would involve costs, he said the expenditure was necessary.
The council bought the Athenaeum in late 2007, based on the perceived need for a mid-sized performance venue in the city.
Dunedin Mayor Peter Chin said yesterday the building was tenanted and was a valuable site.
• The report
The favoured option (2):
No new mid-size theatre
Regent Theatre: $6.9 million upgrade, operating costs $60,000, interest and depreciation $1.3 million.
Mayfair Theatre: $7.3 million redevelopment, operating costs $35,000, interest and depreciation $500,000.
Fortune Theatre: Significant maintenance likely, cost not yet known.