The Friends of Abbeydale Picture House had hoped to buy the 1920s Grade II listed former cinema, but were unable to raise enough money before it was sold at auction today.
The landmark property on Abbeydale Road, complete with snooker club and car park, reached its guide price of £150,000 and sold to an unidentified private bidder at the auction at Sheffield United’s Bramall Lane stadium.
Clive Jaques, Friends chairman, said: “Hopefully it has sold to somebody that is going to look after it and put it to some sort of public use.
“We don’t want it to be just sitting there.
“We’ll just have to watch this space.”
The Friends group was originally formed in 2002.
It bought the building in 2005, exactly 85 years since the Picture House first opened, with the aim of creating a community space for arts, theatre, live music and cinema.
The venue has been used for plays, arts classes and drama clubs.
However, the Friends group went into administration and the building was transferred to receivers.
The Friends group had been trying to raise enough money since then to buy back the building back at this afternoon’s auction, where it was being sold by Yorkshire Bank on behalf of the receivers.
Mr Jaques, a printer from Beauchief, said: “The money that we were looking for didn’t come to fruition.
“The bids we put in, we didn’t get, so we were not able to bid on it.
“We’ll move out some time in November and that will probably be the end for us.
“We’re a bit gutted.
“Seven years we have been working on it and occupying it.”
The 47-year-old added: “In a way, it hasn’t really sunk in.”