The Auckland Theatre Company is continuing to push for a $35 million theatre on the city's waterfront, despite having secured only a tiny proportion of the funding.
The company goes to Auckland Council on Thursday for a review of the $10 million loan.
When the company asked the council in 2011 for financial help, it agreed, on certain conditions.
The council now says the company has come close to meeting only one of those conditions - the way the theatre is designed.
It also says that, despite raising $460,000 from theatre patrons, the company has failed to raise any significant funds.
Penny Webster, the head of the council's strategy and finance committee - which is responsible for granting the funding - is still confident the Wynyard Quarter project will go ahead.
The project includes a 600-seat main theatre, a 200-seat studio theatre, an open-air stage, bars, restaurants and parking. It could be finished by July 2013 if resource consents are granted.