Wellington City Council has pulled out of a controversial $32m deal to re-open the Reading Cinemas complex.
The council has ended negotiations to finalise the proposed deal.
Mayor Tory Whanau and councillors were briefed on the decision over the Courtenay Place building earlier today. She said the outcome was "disappointing, but the right one".
The cinema, owned by a multinational company, closed in 2019 after seismic issues were found, and has sat vacant on the capital's main entertainment street ever since.
Wellington City Council chief executive Barbara McKerrow said staff worked "extremely hard and endured great pressure" to negotiate an arrangement.
"We always signalled that we would halt negotiations if we were not able to reach a formal agreement in a timely manner. We've reached that stage."
The mayor and councillors voted last year to give staff the go-ahead to undertake due diligence and negotiate a $32 million deal that would fund a comprehensive refurbishment of the building, including earthquake-strengthening.
"Senior council staff reached a position where they did not believe they would be able to reach the best possible outcomes for Wellingtonians and the decision was made this week to not pursue the proposal further," a spokesperson for the council said.
Mayor Tory Whanau said today: "I've said many times that I supported officers to find a creative and innovative solution about what to do with the Reading building.
"However, I want to be very clear that this was never a done deal.
Whanau continued: "It would be heartbreaking for the site to sit unused for too long so I urge Reading to continue to explore development deals."
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