But Dunedin’s mayor says no promises were made to fix up Sammy’s, and other options are being investigated.
"I think that they shouldn't get in trouble for it because they're showing the city fathers that there's a need that’s unmet," he said
The city had "absolutely" lost momentum on efforts to address problems faced by musicians and venues.
"It’s gone backwards," he said.
The building has sat idle since the Dunedin City Council bought it in 2017.
It is closed because it is unsafe and no decisions have been made on its future.
Mr Muir said it should be invested in by the city and a trust formed to run it.
Dunedin needed an creative ecosystem where young musicians could progress to larger venues.
A restored Sammy’s would fill the void between bars and stadiums, as well as give international acts a reason to visit.
The past had shown high-quality venues helped to contain negative student behaviour.
The city using its musical heritage to promote itself was "beyond hypocritical" without investing in its future.
Mayor Aaron Hawkins had broken promises about the future of the venue and no longer seemed interested in engaging with or representing the music community, Mr Muir said.
Save Dunedin Live Music lobby group spokesman David Bennett said the future of Sammy's was "100%" in the council’s hands.
The group had been working hard behind the scenes and engagement with the council had been "very positive".
Talks were coming to the pointy end and it was time for the council to start delivering, he said.
Mr Hawkins said the council had consulted on future uses for the building, but never made any promises about its future.
An update on the development of a live-music action plan was due in July and the council’s relationship with the live-music scene was better than it had been in years thanks to the work of Save Dunedin Live Music.
Members of the music community should start by getting in touch with that group if they felt they had not been as involved as they liked, he said.
The building was bought to prevent it from being demolished and it remained a hazardous space despite some interim repairs.
Negotiations had begun with a developer looking to build a new black-box venue at the stadium which would change the conversation if it went ahead.
The entrepreneurial spirit of those playing in the Sammy’s building over the weekend was appreciated, but breaking into buildings was not OK, he said.
Senior Sergeant Anthony Bond said a complaint about the gig on Sunday had been received and was being investigated. Police had concerns about people entering abandoned buildings as they were dangerous and the incident served as a reminder to take heed of warning signs.
People should now be able to enjoy live music at licensed premises with the move to Orange setting, he said.
