The sites of the
Morning Post building (on Flinders Street) and State Migration Office (on Russell Street) were purchased in 1927 by Rufe Naylor, with the goal of building a sister theatre to his
Empire in Sydney. In 1928 the site was purchased by
Stuart F. Doyle, managing director of
Union Theatres, for development as the
State Theatre. The Union's State Theatre was in competition with the
Hoyts'
Regent Theatre, nearby in Collins Street, to be the first truly extravagant 'picture palace' in Melbourne. The State won the race after seven months’ construction time, opening on 23 February 1929, three weeks ahead of the Regent. When it opened, it also had the largest
seating capacity in Australia, holding 3,371 people. Opening night was nothing less than spectacular, and presented the silent films
The Fleet’s In starring Miss Clara Bow, and
The Cameraman starring Buster Keaton. The first ‘talkie’ was
The Doctor's Secret, premiering on 6 April 1929. Eberson pioneered the design of such 'atmospheric' style theatres, usually with 'courtyard' walls in elaborate eclectic Spanish Baroque / Renaisance styles, often featuring statuary, and moving clouds projected on the ceiling. Eberson also designed the
Capitol Theatre in Sydney built the year before, with an interior that is almost exactly the same as Melbourne, but mirrored; they are amongst only a few atmospheric theatres built outside North America. The very elaborate Moorish / Arabic style exterior is quite rare amongst all 1920s picture palaces, with only the
Fox Atlanta, the
Avalon Chicago and the
Omaha Riviera being comparable. A dual-console
Wurlitzer organ of style 270 was installed, the first to be built 'west of Chicago', featuring 21 rows of pipes and a grand piano attachment and oboe horn. It was removed from the theatre in 1963, and subsequently installed in the Moorabbin Town Hall (now
Kingston City Hall) by members of the Victorian Division of the
Theatre Organ Society of Australia. In 1962, the building was renamed the
Forum Theatre. In 1963, recognising the changing trends in attendance, cinema chain
Greater Union converted now-oversized auditorium into two smaller separate cinemas. The Dress Circle balcony was blocked in, creating the upstairs
Rapallo Theatre (with a new entry from
Russell Street) while the Stalls level retained the Forum Theatre name and Flinders Street entry. In 1981 further renovations took place, including the renaming of the cinemas to Forum I and Forum II. In 1985 it was purchased and used by
Revival Centres International, a Christian organisation, and fell into disrepair. In 1995 it was purchased by
David Marriner's Staged Developments Australia, who redeveloped it for use as a film and concert venue operating as
Forum Melbourne. It became part of Marriner Group's portfolio of theatres, including Melbourne's
Princess Theatre and
Regent Theatre, and joined by the
Comedy Theatre in 1996. The theatre was listed on the
Victorian Heritage Register in 1978 and classified by the
National Trust of Australia in 1994. In 2013, the Marriner Group proposed an apartment tower to be built on the adjacent site to the north which they had bought, which was 32 levels (107m) in an area where an advisory height limit of 40m applies, and which would cantilever over the stage tower of the theatre, with restoration of the facade of the Forum as part of the project. This was approved by then Planning Minister
Matthew Guy, but opposed by the City of Melbourne and local objectors, who took the matter to VCAT and won. An appeal by Marriner to the Supreme Court was not successful. In early 2024, the Marriner Group applied for a permit from Heritage Victoria for urgent works because some decorative elements of the exterior were unstable and likely to fall. ==Current use==