THE Mitchell Memorial Theatre is expected to operate at a profit when it re-opens after a £4.3 million overhaul.

Councillors were yesterday told the revamped 319-seat theatre was forecast to record a surplus of £6,000 in its first year of operation, rising to £22,000 after five years.

That contrasts with figures which show the Hanley community theatre recorded a deficit of £34,750 over the last financial year and has a predicted £88,130 shortfall in 2010/11.

That covers the period from May last year, when the theatre closed for refurbishment.

It is expected to re-open by April 2011.

Stoke-on-Trent City Council's Mitchell Memorial Youth Theatre Committee yesterday heard work was currently ahead of schedule and below budget.

Officials said operating profits were expected to come from increased rental costs for community and arts groups, as well as hiring the building out as a conference facility.

It was decided to scrap a special rate for 'founder' groups to hire theatre facilities.

Community Voice councillor Peter Kent-Baguley, who proposed the motion, said: "We need to be clear about the names and costs of categories so we can move on and start taking bookings."

Fellow committee members agreed and, as a result, it will cost £160 per day for non-profit organisations working with the under-25s, £225 for over-25s, and £325 for commercial hire.

It will cost £500 to rent the building for a conference.

The dance studio and meeting rooms will be available for hire at lower rates.

And councillors were told the prices were "competitive" in comparison to other city venues.

Creative groups, such as dance and music companies, can rent workspaces in the refurbished Cartwright House at a rate of £6 or £8 per square foot – compared to the £12 to £18 charged elsewhere in the city.

The smallest workspace is 300 sq ft, which would cost groups £1,800 or £2,400 to rent annually.

Council lawyers will look into agreements to ensure the authority does not lose out in terms of rising utility costs.

Committee members were keen to retain the theatre's community past, and ensure it was run in a more business-like way.

Conservative and Independent Alliance councillor Hazel Lyth, whose cabinet remit covers leisure and culture, said: "I think there is a balancing act in what we need to do in bringing 21st century techniques to some of the less commercial and profitable areas."

For that reason, officials are currently recruiting an interim manager to run the theatre until it is taken over by a trust.

They also agreed to further look into establishing an electronic box office system at the revamped venue, rather than continuing the current, more informal, methods.

There will be a £12,300 marketing budget for the first year and plans for a cafe-bar at the theatre will go before full council next week.

Councillors yesterday heard "cautious" estimates of a £49,452 annual turnover, not including staff costs. Other income is from sponsorship.