The $12 million plan to upgrade the Taita Community Centre, including the Walter Nash Stadium, has suffered a setback.
The city council's first funding application, a request for $800,000 from the Lotteries Commission, has been unsuccessful.
Community services manager Matt Reid last week put a brave face on the decision.
He has repeatedly warned councillors that finding the $3m it needs from grants would be a significant challenge.
The Lotteries application can be resubmitted, and he remains optimistic.
''We were up against a lot of high-merit applications. They made it clear to us that they did not want their decision to, in any way, downplay how important the project is to the community.''
The Taita Centre upgrade has resource consent and detailed planning is underway. There are still numerous funding options to be explored, Mr Reid said.
Mr Reid ruled out staging the development, or concentrating on one aspect such as the stadium upgrade. He said that would raise the overall cost, due to the loss of the economies of scale, and the design makes staging impractical.
Cr Max Shierlaw asked if there was a Plan B on funding, and if Mr Reid had a date in mind for reporting back to councillors on the viability of the project.
Mr Reid said it ''was too early to have that discussion'', and fundraising efforts would increase next year.
Mayor Ray Wallace called on council officers to take a positive approach and said councillors must remain committed to the project.
The council has budgeted $6m and agreed to underwrite a $3m loan. The remaining $3m was to come from grants.
- Hutt News