The State Theatre opened in the 1920s, showing silent films with a live piano player on stage. It remained primarily a movie house right through the 1960s, when a crumbling infrastructure and the spread of multiplexes brought an end to feature films. The theatre showed porno films in the 1970s and early 80s, before shutting its doors in 1984.
In the early 90s some local businessmen bought the State and invested in some minor renovations. They began to book national touring acts (I remember Bob Dylan did 3 nights there in 1994), but had a tough time making a go of it and the theatre shut down again.
It was resurrected in the late 90s by the owners of Stone Coast Brewing and started booking rock shows again. The owners were faced with two big obstacles: a building that needed major (expensive) renovations to make it a first-class facility, and the task of convincing touring bands to make the trek north from Boston, which is usually the northern terminus for touring bands. Bands are usually willing to make the trip if their cut is guaranteed by the promoter, but it can be very difficult to fill the State when a mid-level rock band is playing on a Tuesday night in January, and the promoter ends up losing money.
That said, I think if someone could afford to do the major structural and cosmetic renovations that are necessary, the State could be the premier rock venue north of Boston. It is the perfect counterpart to the Merrill, which is a gorgeous 2,000 seat venue, but one not suited to shows where people stand up.
By the way, if anyone remembers the Stone Coast Brewery over at five corners, that was THE best small venue in the city in the 90s. The sound was top notch and I saw some great bands come through there. The restaurant downstairs was kind of blah, but upstairs it was all beer, cigars and rock!