The Armstrong Hall in Thornbury is to remain closed amid ongoing discussions over moving the venue's facilities to Turnberries Community Centre.
A £5million redevelopment project was given the green light a few years ago, but the financial impact of Covid-19 has reduced the likelihood of raising the necessary funds.
In June 2020 it was announced the hall would remain closed for the 'foreseeable future', with five jobs lost as a result.
The move to Turnberries had originally been rejected in favour of rebuilding the hall on its current site, but is now seen as the best way to safeguard the facility.
South Gloucestershire Council, the Armstrong Hall Trust and the trustees of the Turnberries Community Centre have been in discussions for the last couple of months.
A spokesperson for the Armstrong Hall Trust said: "One way or another a vibrant arts and culture building is needed in Thornbury.
"Plans were underway to take the first step on an ambitious fundraising programme for such a building on the Armstrong Hall site when Covid struck and the existing building was forced to close.
"News came quickly that several of the grant awarding bodies were diverting their money to keep venues they currently fund afloat, instead of supporting new projects like the Armstrong Hall.
"Since then the Armstrong Hall Trust has been working hard, trying to find ways to extend the life of the Hall by another few years.
"After the decision in 2017 to demolish and rebuild the Hall, maintenance work has been restricted to necessary work only, mostly carried out by the staff to save money.
"The Trust took the opportunity provided by the enforced closure to undertake professional condition surveys to identify what jobs must be done to keep the building dry and secure in the short-term. The trouble is even the minimum costs money."
Amateur dramatic groups are keen to return to the hall, but with questions over the size of audience that would be permitted there is no guarantee it would be financially viable.
Jayne Stansfield, chair of the Armstrong Hall Trust, said: “Without the income the hall cannot do the work necessary to reopen, and without opening, the hall cannot generate income.
"It is very much a catch-22 situation for all concerned.”
Repairs necessary to reopen the hall safely have been estimated at nearly £77,000, plus the work needed for electrical compliance.
A spokesperson for the Armstrong Hall Trust added: "The trust does not believe it is reasonable to spend this sum of money in the current circumstances. The trust has, therefore, reluctantly taken the difficult decision to keep the hall closed.
"The trust is utterly committed to providing a performing arts venue in the town. Any new build will need to provide flexible space to enable a wide range of theatrical and cultural events to take place in a state-of-the art building fit for the 21st century and fundraising activities to support this aim will resume as soon as feasible.
"The trust is continuing to explore all possible ways forward to achieve this. In particular, discussions began a few weeks ago and are ongoing between the Armstrong Hall Trust and Turnberries on an alternative way to achieve a new theatre space in Thornbury."
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules here