The 48-seater Kino cinema closed its doors in January this year.
When the Bermondsey Square development was approved in 2005, a condition was imposed limiting the use of the former Kino unit to "cinema and arts club / exhibition space".
Now the unit's landlords have applied to Southwark Council to allow the empty unit to be used as a shop, restaurant or gym.
Oval Real Estate argues that a cinema is no longer viable and that Kino had been unable to break even despite not paying rent and service charge.
According to a document submitted with the planning application: "During the applicant’s ownership, rent and service charge was not paid and accounts were produced showing the company could not break even, despite not paying property costs."
The planning statement continues: "Not only is the space considered to be prohibitive to a successful cinema operation, but the location was also deemed by the market agents to present a barrier for an independent cinema to survive in this unit.
"Following the rise of online streaming and numerous viewing platforms, along with the long-term effects of covid on the hospitality sector have made it a difficult market [and] cinemas in locations without strong transport nodes face a greater challenge."
The three Labour councillors for London Bridge & West Bermondsey ward - Cllr Sunil Chopra, Cllr Sam Dalton and Cllr Emily Hickson - have tabled an objection to the planning application, urging the council to keep a cultural space as part of the Bermondsey Square development.
"The former Kino Bermondsey cinema on the site was much loved locally, and considered a great centre of independent arts culture since 2009," wrote the three councillors.
"The 21 per cent rent increase imposed by Oval Real Estate over a two year period, on top of a massive rise in service charge payments up to a yearly total of £86,000, forced the closure of this revered local institution at the start of 2023.
"Local residents and groups are desperate for this space to continue as a cultural hub which provides great public benefits.
"We understand that a cinema is not the only way to achieve this and that therefore some flexibility is required, however the change of use application would pave the way for another shop or restaurant, not bringing residents together and explicitly serving any community purpose."
They added: "We urge this change of use planning application to be rejected, and for the planning department to work with local residents, groups, and councillors to protect the cultural and public value of this site."