The report filed by chief executive officer Aaron van Egmond states the cinema’s existence within the future shire hub is financially non-viable.  

The report also states that a third floor would have to be constructed in order for the cinema to remain within The Rex, which would cost $600,000. 

Daylesford Community Theatre president Gina Lyons described the report as “extremely disappointing” and said it did not explore the other avenues in which the cinema could remain a part of the shopping arcade. 

“We're disappointed because the one and only preferred option (to construct a third floor) is too expensive in their mind and other options haven’t been properly considered,” Ms Lyons said.  “It seems all of their eggs have gone into one basket when there are a range of other options which should have been explored.” 

The report comes after the council purchased the arcade in August for its $9.75 million Hub project.  

Previous owners of the building had given the cinema notice to vacate the premises, however council agreed to explore the possibility of maintaining the community-run facility within the hub. 

With works on the hub project set to begin in April the cinema was given a three-month notice to vacate the site in January, which was amended to ensure school holiday programming would not be interrupted. 

While council said in the report it is continuing to search for an interim home for the cinema during the renovation process and beyond, a location it yet to be identified. 

Mayor Sebastian Klein said while he understood the community’s concern, the project had to be financially viable. “At the end of the day we have to balance what communities want with the responsibility to behave as though rate payers money is a precious resource, because it is,” Cr Klein said.