The church has said no to the plan in a move branded "a shame" by local MP Ingrid Leary.
The Holy Cross is a large complex of buildings, some 150 years old, that are leased by the church to Taste Nature Social Enterprise, a charity chaired by Taste Nature cafe owner Clinton Chambers.
Mr Chambers had hoped to achieve a double win — delivery of the charity’s work while also restoring a historic building — but must now find a new base.
The Catholic diocese’s Dunedin operations manager, Paul Olsen, said: "Clinton’s proposal is Clinton’s proposal and won’t be happening at Holy Cross. So that’s the start and end of it."
The Holy Cross complex includes a large chapel, commercial kitchen and dining room and accommodation for 100 people.
Parts of it are in disrepair, including a lecture theatre with buckets in it to catch the rain.
Mr Chambers had hoped to run projects that would have helped bring the building back to life, including growing organic food in the Holy Cross back garden, cooking healthy food in its kitchen and serving it up in the dining room. There was a hope the unused chapel would become a venue.
He had also planned a pre-apprentice building course that could have helped repair the building.
Integrative medicine practices were also planned, ranging from osteopathy to yoga.
Mr Chambers is no longer the man to help fix the buildings and expressed concern about its future.
"The Holy Cross has so much potential and is a great resource just sitting there unutilised. It is an old building and needs major investment."
Mr Chambers had previously worked for the Catholic Church at the Holy Cross. He was employed in 2015 to set it up as a place to stay and it was advertised as providing motel-style accommodation. Accommodation had also been provided for some homeless people.
After 100 years, the church abandoned the Holy Cross in 1997 as a teaching centre for priests, moving its seminary to Auckland.
Mr Chambers said his charity was focused on three pillars of social change — education, health and conscious consumerism — and working within a Maori world view. The charity wants to help people grow and eat organic food, look after their health in natural ways and be conscious of their consumer habits in a time of climate change.
A new base is being sought in Dunedin for the charity’s work, which Mr Chambers said was still "definitely going ahead".
He said he was open to suggestions, anywhere between Mosgiel and North Dunedin, and remained an "eternal optimist".
"When one door closes another opens. We have a good, strong concept that is workable and sometimes challenges are a catalyst for change. We just have to adapt and are flexible enough to do that."
Ms Leary said it was a "such a shame" Mr Chambers’ dream was not happening at the Holy Cross.
"He has a successful track record in business and big vision that aligns his values of a circular sustainable economy and empowerment of young people in a way that makes good business sense.
"It’s such a shame that things didn’t work out with this building. However, I have no doubt he will realise his dream in a different way in the fullness of time."
Mr Olsen refused to say what might happen to the building next as it was "commercially sensitive". — additional reporting Mary Williams
