Auckland Council is yet to loan $15 million for the upgrade of the city's historic St James Theatre and no public money is at stake in the troubled project.

Noel Reardon, council heritage manager, said no money had yet been loaned and nor would it be until certain conditions were met.

He was commenting after it was revealed this week that there were funding issues with the 309-unit, 39-level apartment tower to be built alongside the historic theatre on Queen St.

"The council is still in discussions with the owner regarding the terms of the loan, therefore, no financial contribution has been made at this stage," Reardon said.


The council had also imposed a series of conditions which had to be met before the money would be paid, he emphasised.

"Broadly speaking, the conditions include security for the council's loan, the loan being drawn down on agreed milestones, transparency around matching funding, and terms around when the loan becomes a grant. The council is now working through the specific details of those conditions with the owner," Reardon said.

"The council is hopeful that the apartment building goes ahead and that the restoration of this historic building will proceed. The council is still prepared to contribute $15 million to the restoration, subject to appropriate conditions, and we are waiting on a response," Reardon said.

Steve Bielby, co-developer of the project which is the apartment tower and the theatre's restoration, said people who paid deposits were being asked for more money.

Relianz, the developer, had significant issues obtaining and implementing satisfactory finance to allow the St James Suites project to go ahead, Bielby said.

But he is hopeful work will begin, following demolition work on the site.