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The Palace Theatre opened on 19 December 1896. It was owned by George Adams and built as part of his Tattersall's hotel complex, designed by architect Clarence Backhouse. It was initially intended as a variety house with a capacity of around 1000 people.
The theatre had a frontage of 56 feet (17 metres) to Pitt Street and a depth of 125 feet (38 metres). In addition to the main doors, the auditorium had side exits onto to a private alley. This allowed theatre patrons easy access to the hotel bar while complying, technically at least, with the legal requirement at the time that theatre and hotel had to have separate entrances.
Operationally the theatre had, in the basement, the usual configuration of dressing rooms, 'green room' for actors relaxing and/or entertaining and working areas. The stage of this new theatre had the latest equipment, including an engine room providing electric light, and the Palace was the first theatre in Australia to have all its lights, including those in the dome, concealed behind glass panels. The generating equipment for this display was initially beneath the vestibule, but it was moved off site in 1905 to minimise the fire risk.
The Palace was a visually exciting theatre. The brick and plaster exterior was itself a display of theatricality. There were baroque arches and cornices and a French-style roof pavilion with an Indian cupola on top. The Palace's first lessee and director, the well-known scenic designer Philip W Goatcher, who was also responsible for the interior décor, continued this theme in a style which architectural historian Ross Thorne dubs 'Indian Gothic'. There were press claims that this interior design was unique but the American-born Goatcher seems to have derived much of the style from the Broadway theatre in Denver, Colorado, which had opened in 1890.
The lobby, the toilets and the small dress circle foyer were all in the baroque style, with the foyer featuring a ceiling painting of floating, lightly clad nubile females. The auditorium was ornamented in embossed and painted sheet steel, with the eight posts supporting the dress circle leading, by way of vaults, up to the arched ceiling. A gold Buddha sat at the top of the curved proscenium and the side boxes were like miniature Indian temples. A colour scheme of old gold and peacock blue contrasted with a vibrant front stage curtain made in a mosaic of small pieces of hand-painted satin. This work was reported to have cost £1000.
Despite this intriguing display, the Palace did not prosper. It attracted only short-term leases with a wide variety of entertainments and developed a reputation as 'a hard luck house' where shows, for no apparent reason, did not do well. In 1920 it came under the long-term control of the newly amalgamated JC Williamson's and J & N Tait, which remodelled the interior in 1923 to a less flamboyant style. They converted it to a cinema in the 1930s. It was also briefly used as a mini-golf course. Following World War II, its use fluctuated between live theatre, often in association with the Australian Elizabethan Theatre Trust and Garnet H Carroll, and cinema presentations. Soon after a production of the musical Little Mary Sunshine, it closed in 1969 and the building was demolished in 1970. Returning to its original associations, the Palace now rests under the Hilton Hotel.
Eric Irvin, Dictionary of the Australian Theatre 1788–1914, Hale and Iremonger, Sydney, 1985, pp 291–2
Ailsa McPherson, 'The Lost Theatres of Sydney', unpublished lecture, Sydney, 2005
Philip Parsons (ed) with Victoria Chance, Companion to Theatre in Australia, Currency Press in association with Cambridge University Press, Sydney, 1995, p 423