Design from architect Gregory Henriquez for the restored York Theatre. (Henriquez Partners Architects)

The York Theatre, a nearly century-old Vancouver building that citizens campaigned the last 27 years to save, now appears to have a future.

Vancouver developer Bruno Wall has agreed to spend $12 million to restore the East Vancouver theatre after buying it on Friday from a developer who wanted to level it.

A partnership involving Wall Financial Corporation, Henriquez Partners Architects, Jim Green and Associates, and the Vancouver East Cultural Centre was announced Monday in Vancouver.

"One of the most amazing things about working on this project is how, at each step, everybody along the journey said yes," said Heather Redfern, executive director of the Vancouver East Cultural Centre.

The York's beauty may be concealed by a layer of garish pink paint, but it has great value as a theatre, she said.

"I mean the real value is that it was actually built as a performing space, not as a movie theatre. It's got a full fly tower and phenomenal sight lines. It's very intimate. It's got a large balcony," Redfern said.

In return for its capital investment, Wall Financial gets a density transfer — an agreement with the city that allows the firm to build a structure with more square footage in another location in the city.

The 97-year-old theatre, on Commercial Drive, was built in 1912 as the Alcazar and has a proscenium stage. It served as the home of the Vancouver Little Theatre Association for 54 years, giving a start to actors such as Dave Broadfoot, Don Gerrard, Joy Coghill and Bruno Gerussi, according to Heritage Vancouver.

Its name was changed to the York Theatre in 1941, in the 1980s it was a punk venue and later, it became the Raja cinema.

Tom Durrie told CBC News he's been fighting for the theatre since 1982.

"Today is actually the culmination of a dream — a dream that started actually 27 years ago," he said. "In 1982, there was a threat of demolition of the York Theatre, and I, along with some friends, formed the Save the York Theatre Society.

"Even at that time, there were over 200 people who paid their $5 each to be members of the Save The York Theatre Society. So there has always been community support for this project."

Architect Gregory Henriquez plans to restore a 363-seat theatre and add a two-storey glass lobby. The venue will be run by the Vancouver East Cultural Centre.

"We're saving the original 1911 theatre portion of it and the entrance, which is on Commercial Drive, and restoring it to 1937, which is when the Art Deco facade was added," Henriquez said.

"And then we're going to add on to the front of it a two-storey glass lobby that will look right onto the street and enliven the street day and night."

Vancouver Mayor Gregor Robertson says the deal shows council is serious about the arts.

"It is indeed a reflection of City Hall's commitment to the arts community and recognizing not only the community and social importance of the arts, but the economic importance of arts in this city," he said.

With files from CBC's Paul Grant