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The Octagon theatre was the preferred option in the council’s 10-year plan consultation document, with an alternative option of redeveloping the Mayfair Theatre.
Submissions heard yesterday either supported the latter or options not presented, such as redeveloping the former Sammy’s music venue.
Oxo Cubans founding member Craig Reeves said the Athenaeum was a "non-starter".
The size and location of the Mayfair Theatre was a much better fit for a mid-size venue.
"It’s blindingly obvious to those that actually work in the business that the Mayfair Theatre is streets ahead."
Mr Reeves also questioned why former live music venue Sammy’s was not being considered.
"In an ideal world, a place like Sammy’s, developed well with a vision and a community aspect would be the best choice."
The Chills manager Scott Muir said the council’s feasibility study into new performing arts venues for Dunedin highlighted the lack of a mid-size live music performance venue.
"I wonder why the council would propose building another theatre as opposed to building a music venue that could also be used as a theatre."
Mr Muir said the council should ring-fence the money proposed to be allocated to a theatre project and consult the creative community again about what was needed.
Dunedin resident Jeremy Anderson said neither of the presented options was right.
The location of the Mayfair Theatre in South Dunedin ruled it out, while the Athenaeum lacked parking and was too small.
"Dunedin doesn’t need another 400-seat theatre. It’s already got two."
Mr Anderson said the council should build a new temporary theatre that could be developed further in later years.
There were no submissions yesterday supporting the development of the Athenaeum.
The committee from the Athenaeum is to speak today to its submission, in which it says it has no position at present on whether the building should be developed as a theatre venue.