Upgrades would be required to make the building at 231 Stuart St usable again, a council report said.
Dehumidifiers and sensors were being used to control moisture, which had been a problem in the building.
The property — which has a category 1 rating from Heritage New Zealand Pouhere Taonga — has been regarded as a strategic council-owned asset, but its strategic value for the council is considered to have diminished since the 2018 closure of the professional Fortune Theatre company.
The property has since been vacant and the council voted 12-1 yesterday to seek public feedback about both removing it from a schedule of strategic council-owned assets and potentially selling it.
This is set to be covered in the council’s 2025-34 draft long-term plan.
Built in 1870, the building was a church for more than a century, before the Trinity Methodist congregation held its last service there in 1977.
It was then a home for professional theatre for four decades from 1978, but lack of financial viability forced the company’s closure.
Dunedin deputy mayor Cherry Lucas said the building could hold potential for a new owner.
It was being maintained and its interior kept dry, but this was costing significant money and the council was not in a position where it could afford to restore the building to its former glory, she said.
The council report said the property generated no revenue and it had an operating budget of $122,000 for rates, electricity, insurance, depreciation and maintenance.
Cr Brent Weatherall said the property should be sold to enable it to have "the love it deserves".
"Our city is fortunate to have a number of skilled developers who I’m sure would queue for the opportunity to put new life into this stunning building."
Cr Carmen Houlahan said it was a sad day for arts in the city, but 231 Stuart St had not been a working theatre for years.
A new theatre needed to be built for professional practitioners and "we need to get on and get it done", she said.
Cr Lee Vandervis, who voted against the resolution, said he did not believe private ownership would provide the best future use for the site.
A slimmed-down management structure for a professional theatre could work there, he said.
Cr Vandervis said it was one of the city’s best examples of built heritage.
"If we are to wash our hands of the ownership of this building, we have no way of guaranteeing it won’t be demolished."
Council chief executive Sandy Graham said there would be a high degree of interrogation of any application to do anything to the exterior of the building.
Cr Steve Walker said it was a stunning building, but also "a bit of a dog" for producing theatre.
Council property services group manager Anna Nilsen said there had been damage to some of the floor and stairs because of moisture.
"We have gone in and got that under control," she said.
Dunedin theatre practitioner Karen Trebilcock told the council she believed a viable theatre could operate at the Stuart St site.
It could be a comfortable theatre accessible to various groups and operating five days a week for much of the year, she said.
