The Otago Theatre Trust told the annual plan hearing yesterday outdated technical resources at the theatre meant productions could bypass Dunedin for Invercargill or Oamaru.
Chairman Michael Shield told the hearings committee it could no longer meet technical or safety aspects of stage production.
One problem the theatre faced was with its counterweight system, with only 24 counterweights operative, when, for example, the Royal New Zealand Ballet required 47, and Dunedin Operatic 50 to 55.
Because of that, Dunedin audiences saw only a fraction of the stage effects seen in other centres.
As well, the fly tower was not high enough for scenery cloths.
The council owns the theatre, and spent more than $2 million in 2006 on redeveloping toilets and the Regent Chambers.
Technical manager Nelson Miles said late yesterday the trust had been considering the matter since 2005, and yesterday was the first time it had announced its need for funding.
Mr Miles said the counterweights, which allowed scenery and lighting to be put in place on the stage, were outdated and unsafe, and added to the time required for transition between shows.
It was also below the industry standard that was expected.
The $4.7 million would also pay for the flytower to be raised, the stage, which was slumping in places, to be replaced, and the basement level to be opened up.
The trust's submission said the viability of the theatre was at risk.
"The trust can not take on this project alone and needs the Dunedin City Council, as owners of the building, to partner them in bringing the stage-house facilities up to the current industry standards."
The auditorium upgrade would include new seating, fire protection, flooring and carpet.
Asked by Cr Paul Hudson how urgent the work was, Mr Shield said the counterweight work was crucial.
"We have our own money to call on, but not $4.7 million."
