A report commissioned by the Mayfair Theatre Trust has given the 95-year-old South Dunedin theatre a "clean bill of health" and recommended a $7 million complete makeover, Mr Cleveland, who heads the trust, said yesterday.
On Monday, Dunedin city councillors at a community development committee meeting were told a new mid-sized theatre seating between 550 and 800 people was "necessary and feasible" and might cost $17 million to $35 million.
While councillors were concerned the facility might be unaffordable, they voted to consult with those running other theatres - including the Mayfair trust - and debate the issue again in January as part of long-term council community plan budget deliberations.
The Mayfair began life as a cinema.
It was purchased by the Otago Opera Company about 40 years ago and is run by the Mayfair Theatre Trust.
The trust's report, compiled over the past year with the help of theatre professionals, engineers, architects and accountants, was due for release next week, Mr Cleveland said.
But he outlined its main recommendations yesterday, saying city residents might favour the council contributing to an upgrade of the Mayfair instead of building a new theatre.
"It is right and proper that all options are evaluated by the council, but our view is that between them, the Regent and the Mayfair can meet almost every [musical theatre] need."
The report recommended a five-stage upgrade.
• Making all working areas safe and code compliant.
• Rearranging and enlarging the foyer; installing new toilets and a lift.
• Remodelling the basement dressing rooms; installing new lighting, electrics and sound facilities.
• Creating a link from the neighbouring workshop building to the stage to allow easier access for sets and props.
• An "extreme make-over" for the auditorium and public areas, including painting and carpeting.
The Mayfair was "a charming theatre" but was shabby, Mr Cleveland said.
"We are at the stage now we need to take this big step."
Council city life manager Graeme Hall said yesterday the council was aware of the Mayfair report and had contributed $5000 towards it.
The council had not ruled out upgrading the Mayfair instead of building a new theatre.
"No decisions have been made. We need to do more consultation and get full information."
Other options included a new theatre either on the Athenaeum site in the Octagon, which the council purchased a year ago, on the Filleul St car park, or on some other site not yet identified.
The preference of user groups was for the theatre to be as close to the Octagon as possible.
The council had been discussing theatre options for nine years and it was time a decision was made, Otago Festival of the Arts director Nicholas McBryde said yesterday.
"I'm excited by the fact the report has got this far and might go further . . . Let's hope something beautiful happens."