In a perverse sort of way, I'm glad Auckland City councillors are going ahead with a daft plan to build a $1.65 million giant screen in Aotea Square in time for the Rugby World Cup. It means they won't be able to cry poor when I suggest that for not much more, they could buy the wonderful old Mercury Theatre, which has just gone on the market.

The chairman of the council's arts committee, Greg Moyle, said the screen would "be a great asset for Aucklanders and will bring people together to experience a wide range of live screened events ranging from sporting events like Rugby World Cup 2011 to cultural events like Diwali".

How much greater then, to rescue an asset than can bring Aucklanders drama in the flesh, not just electronic facsimiles of events happening far away.

Mr Moyle, rather cautiously, tells me that "council don't really have a budget to buy the Mercury" but concedes that as it's for sale, "we should look at it." He sees it as "an excellent home for the Auckland Theatre Company" or, "failing that, we should be talking to tertiary education institutes because maybe it could become a school of performing arts".

I snuck in for a look on Friday, and despite the dim lighting and genteel decay, it still gives off the special aura that old theatres have and new ones don't. A big plus are the new seats the present owners, the Equippers Church, recently installed.

My first visit to what was then The Playhouse was on a school trip to a Moral Rearmament rally. An odd thing for a state school to pack its kids off to. Luckily, I was so blissfully ignorant of the godly side of things, it all went over my head. But I loved the make-believe. Then came the wonderful Mercury Theatre years, when from 1968 to 1988 this off-Karangahape Rd venue became the hub of Auckland's dramatic - and operatic - life.

How they pumped the shows out, a dozen or more a year from pantomime to grand opera. Shakespeare shared the spotlights with modern greats like Athol Fugard and Tom Stoppard and local playwrights like Roger Hall and Renee Taylor. I won't even start on the actors and directors for fear of leaving someone out. The Mercury was home, and we loved it, even if the carpets were threadbare and the plumbing and front-of-house facilities quaint.

Nearly 20 years on, scratch an old Mercury customer and you'll find an unrequited nostalgia for the old venue. It had an intimacy and sense of occasion that the Maidment and certainly the SkyCity and ASB theatres lack. And now it's up for sale, for - to use real estate optimism - "somewhere north of $2 million."

With its new seating, the place is probably in better condition than it was when the receivers unceremoniously booted the players out in 1988. How much needs to be spent to resurrect it as Auckland's premiere playhouse, and who will provide it, is - to borrow from the Bard - the question. But it's one we can't walk away from.

Built in 1910, it's a Category A scheduled building on the district plan and a Category 2 on the Historic Places Trust's list, so it's stuck more or less at being a theatre venue. As luck would have it, the city has a gap in its facilities for just such a building. In August 2008, a venue study by Horwath HTL, commissioned by the council to help set policy, concluded that "the key findings of the study are that there is an urgent and high-priority need for a 250-350 seat flexiform theatre and a 500-600 seat drama theatre".

The Q Theatre project now under way resolves the flexiform theatre problem. The Mercury, which is configured as two venues, one of 550 seats, the other of 150 seats, is a good solution to the other need. With a little work, the two theatres could be combined into one 700-800 seat space.

Auckland Theatre Company officials are viewing the Mercury this week. It's no secret they're rather keen on pursuing a new theatre as part of the Queens Wharf redevelopment.

There's also a feeling, both in the ATC and the city council, that the K Rd site is not salubrious enough, or central enough. I'm leaning towards the pragmatic solution. We have a bird in the hand. In Auckland, that's usually as good as it gets.