The NSW Government will look at options for a new theatre at Barangaroo as it seeks to create more capacity in Sydney, Arts Minister Don Harwin has promised.
The Minister admits there is a shortage of theatres in Sydney and says he is committed to building more.
"I've been concerned that under the previous government and the arrangements they put in place for Barangaroo, and also some of the work done earlier in our term, that there hasn't been enough provision put in place for performance space in that Barangaroo area," he said.
"But the good news is there's still a capacity to look at something there and I've made a firm decision that I will ask my officials to look at the capacity for a new performance space in the Barangaroo area."
The State Government is also working on the business case for a 1,500-seat lyric theatre at Ultimo on the site of the Powerhouse Museum, which is moving to Parramatta.
A theatre venue was considered for the precinct nearly a decade ago but other competing cultural interests were seen as a higher priority, says Evelyn Richardson from Live Performance Australia [LPA], which represents producers and theatre operators.
"It gets a little bit like watching an episode of [ABC drama] Utopia over and over again," she said.
"There's only so many times you need to do a feasibility or an assessment.
"At some point you have to bite the bullet and say we're going to invest, we're going to get on with it."
Currently only The Lyric at Star City Casino and The Capitol in Haymarket can house large-scale Broadway musicals.
The squeeze is set to worsen as delays continue at the Walsh Bay redevelopment and the Sydney Opera House and Parramatta Riverside Theatres close for refurbishment.
Theatre Royal refurbishment concerns
The Theatre Royal in the CBD has been sitting empty for three years.
Under intense industry pressure, the state government secured a 45-year lease on the theatre before the state election.
"I am advised by my officials that we will have an operator in place before Christmas and the important thing is that's not going to be at the cost of the taxpayer," Mr Harwin said.
But operators interested in taking on the Theatre Royal will have to pay a $37 million construction contribution to the building's owners, Dexis, for entry and foyer works.
That is on top of costs to refurbishment to the auditorium of upwards of $40m and rent.
Sources have told the ABC a number of those in the mix for the tender have not yet complied with that requirement.
"I think that's a very big entry fee for a private operator coming into a venue," Ms Richardson said.
"Having an upfront fee where they're paying for things outside the refurbishment of the theatre I think is a big ask, and obviously that's currently being negotiated."
One theatre that is almost ready to open is The Coliseum based at Rooty Hill RSL in Sydney's west.
Executive Director Craig McMaster says bookings for the theatre, which is set to open in December, are strong and it is likely to be fully occupied into 2021.
"All of the major producers have been out here and we've been thrilled by how great the reaction has been," he said.
"I think what they're now realising is that this development is an incredible godsend to what has been a bit of a drought in Sydney."
