Visitor numbers at the Scala have been fewer than the company expected
A council has approved an £86,000 bail-out plan to rescue an arts centre, 15 months after it had a £3.5m facelift.
The Scala in Prestatyn has a deficit of £84,000 and minutes from a Denbighshire council meeting show it is expected to lose £86,000 this financial year.
The Scala would need to apply for the money, and certain conditions apply.
Rhiannon Hughes, chair of the Scala board, said the authority was "supporting the Scala as it works to secure its future and we welcome that".
The council said it wanted five seats - three councillors and two officers - to sit on the Scala board, and it would then become a "local authority-influenced company".
Mrs Hughes, a former council leader, said the five new board members had been accepted at a meeting on Monday.
The original Scala first opened in 1913, but the cinema closed in 2000.
In February 2009, it re-opened as an arts centre and said it was Wales' first all-digital cinema.
However, it has failed to generate the visitor numbers it hoped for, with 6,000 fewer than its 50,000 target in the past year.
A report to Denbighshire council reveals "it would take a number of years for the company to become viable".
Chris Bond, general manager of Scala Cinema and Arts Centre, told BBC Wales the company had expected a first-year deficit of about £60,000, but this had increased to £84,000.
In addition, the company was also given an £80,000 loan from Denbighshire council in December, as well as a £50,000 grant last year.
Reasons given for the reduced visitor numbers include the recession, an under-estimation of the venue's operating costs and bad weather.
The council met in private earlier this month to discuss the matter and the minutes of that meeting are now available.
They show the council's cabinet approved an "additional budget allocation of up to £86k" to support the company, subject to several conditions.
However, the money will only be allocated if applied for by the Scala, as and when needed, and strict conditions apply.
The council would also want a revised business plan from the company by September, and long-term proposals by December.