Most recently used for record storage, the cavernous bottom level of City Hall in Texarkana, Ark., got its start as a venue for pageants, concerts and plays.

The theater was rediscovered when Texarkana’s repertory company was researching new performance venues, and a local group is hoping to preserve that history and restore the arena as a functional community center.

“We didn’t even know the thing was there,” said Jimmy “Smitty” Smith, president of the Arkansas Municipal Auditorium Commission.

Construction began on the building in 1928 and its grand opening...

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