Efforts are being made to find more funds to help restore a coastal landmark after a bid for Lottery cash was turned down.
Plans are in place to transform the Spanish City Dome, in Whitley Bay, North Tyneside, into a leisure and entertainment hub for families.
The scheme, led by North East firm Robertson, includes proposals for an activity centre in the Grade II-listed dome, as well as food and retail outlets, a gym and community space.
The surrounding area will have commercial developments including a 60-bed hotel, a care home and apartments.
But fears have been raised about the project after an application for cash from the Heritage Lottery Fund (HLF) was turned down.
The total cost for the restoration of the Dome and associated external works is estimated to be £8.1m.
Around £1.2m has already been secured from the Government’s Coastal Communities Fund to create a public piazza in front of the 1910 Dome, providing a focal point for open-air activities.
It is estimated that £3.75m will be generated by the value of the residential development sites and the commercial income from the Dome.
That leaves a gap of around £3.15m. It had been hoped the HLF would help to pay towards the costs.
But, although the scheme had support, the cash bid was rejected as £52m worth of applications had been received for just £12m of funding. Now North Tyneside Council says other sources of money are being explored.
A spokesman said: “The regeneration of the Spanish City site has definitely not stalled – in fact the elected mayor and cabinet at their recent meeting confirmed their commitment in taking it forward as part of the borough’s coastal regeneration plans.
“However, due to a Government funding decision, the timescales of the next phase of the work are being revised.
“A HLF bid for the Dome was submitted in December 2012.
“Although the bid was recommended for approval by the local HLF office and the national board of trustees, in April the council was told that this bid had not been successful due to the high number of bids received.
“The HLF board of trustees has invited the council to resubmit the Spanish City proposal under a new Heritage Enterprise Fund priority, which is targeted at funding heritage restoration projects for commercial uses that are not economically viable without grant aid to bring properties back into productive use.
“The application under the new Heritage Enterprise funding stream was submitted last Thursday.
“We should hear if we have been successful with this stage one bid during December this year.”
The Whitley Bay Chamber of Trade said it was important to get the Dome work completed.
A spokesman said: “The Chamber does appreciate that this is a massive investment, but there is potential and would give Whitley Bay such a big boost if funding could be found to kick-start bringing the Dome back to life.”