In Bertolt Brecht and Kurt Weill's satirical opera, first performed in 1930, the city of Mahagonny appears instantaneously, as if by black magic. "Within a few weeks a city had arisen," reads Brecht's title card, "and the first sharks and harpies were making themselves at home." Such is the appeal of this Sin City, an amusement town devoted to pleasure and excess: if you found it, they will come.

This work would begin the creative partnership between Brecht and Weill, and would help to codify Brecht's aesthetic of "epic theatre" and manage to castigate both the excesses of Weimar Republic and the rise of the Nazis. But one of the most striking lessons of Rise and Fall of the City of Mahagonny, is that it is amazing what you can achieve without planning permission.

On a beautiful summer morning in Dublin, a new city seems to be springing up at ferocious speed. Through the open doors of the loading bay of the Olympia Theatre, pedestrians watch a bustle of motion and listen to the sounds of industry: people in high-visibility jackets clamber around a scaffolding, the quick whine of a drill and hollow clank of metal, the sharp scent of freshly sawn wood. It is almost a parody of a theatrical get-in, the time in which a new production enters its venue, crammed with construction and undertaken at double speed.

That, however, is a taste of the show to come, a co-production between Rough Magic and Opera Theatre Company, supported by the Sky Arts Ignition Award, which had always intended to make its Mahagonny out of the exposed apparatus of the stage.

"Mahagonny – does not exist," goes an early version of the opera, Mahagonny Songspiele. "Mahagonny – is not a location. Mahagonny – is just an invented locution." (The name means "spider web".) To see the Olympia Theatre begin to transform, however, is to feel Mahagonny spinning together. The auditorium has been gently reconfigured by the architects Sheila O'Donnell and John Tuomey, stripping out one bank of seats entirely to accommodate a 39-piece orchestra, while mingling audience seating and performance space to create an immersive environment.

From the moment an old truck breaks down, stranding its three enterprising fugitives – a widow called Leocadia Begbick, Fatty the Bookkeeper and the divinely named Trinity Moses – in the middle of nowhere, the orchestra, singers and lusty appetites of pleasure-seekers flood the space. They have you surrounded.

Parker’s plan

Lynne Parker, the artistic director of Rough Magic and the director of this co-production, had set her sights on the Olympia for the project. Her company had considered staging the opera, a cautionary tale of capitalistic excess with a solemn destructive moral. At one point, for maximum political resonance, they considered staging it in a Nama building before discarding the idea as too blunt.

“The Olympia auditorium is an Aladdin’s cave,” Parker told me late last year. “It has this beautiful, Victorian, opulent interior. I just thought, there’s a pile of riches sitting in front of me, why not use that? Why not build a city using the infrastructure of the building?”

Following years in which Irish theatre has restlessly sought to create work in non-theatrical spaces, this seems like a curiously satisfying conundrum: to create a site-specific show in a designated theatre space.

A few days before the get-in, designer Aedín Cosgrove considered the challenges ahead. “The characters enter the city of Mahagonny from Temple Bar,” she said, “so the ‘deserted place’ is the empty theatre. My brief, really, is that everything that gets created in this desert space is in some way inspired by the building of the theatre.”

This chimes with the Brechtian idea of the "epic theatre", first defined in his Notes on Mahagonny. It replaced the unbroken illusions of conventional theatre with a montage of juddering scenes, sternly informative projections, and "alienation" techniques to prevent audiences from being subsumed into a comfortingly fictive, faraway world.

Cosgrove, imaginatively ransacking the 19th-century music hall, has looked for a satisfying jangle of discordant elements. “Because it’s a rock’n’roll venue as well, the sort of things that might be lying around backstage can create quite different environments,” she says. Indeed, when the “sharks and harpies” arrive, including soprano Claudia Boyle’s prostitute, Jenny Smith, the most prominent prop onstage is a pristine flight case. Typically used to transport gig equipment, here it decants stiletto heels to the enterprising young women of Mahagonny.

Conceit versus reality

“The conceit for the show is that it is a production week [the last week of rehearsals] for a production gone bad,” says Rough Magic producer Diego Fasciati. “As the city begins to disintegrate, so does production week.”

In reality, Fasciati’s production week cannot afford to go any way but well. Opera is expensive and time-consuming, and, without the €230,000 award from Sky Arts, neither Rough Magic nor Opera Theatre Company could have staged the production. Even with their combined resources, the production will run for just six performances with no previews.

"This is not the normal set-up for us," says production manager Rob Furey, who, between keeping everything on schedule and fielding questions from all directions, seems both omnipotent and preternaturally calm. "We wouldn't normally have just 12 hours to build something of this size."

As we speak, sitting high in the Olympia’s dress circle, a triangular platform is secured to the upper reaches of the onstage scaffolding. “This piece they’re putting in right now is the ‘cheese piece’,” says Furey. “Until now, it’s only ever existed on paper and in our heads. It’s for the cast to stand on. We just gave it that name because it’s triangular.

“The nature of site-specific work means that there isn’t anybody in this room who hasn’t had to do something funny before, like build a garden on an elephant,” says Furey.

Still, he says, it’s been an anxious week, and delayed deliveries this morning don’t make things any easier. “The pressure for us is that when the cast come here tomorrow at two o’clock, everything is in place. We’re already behind on that. It’s all the little things and details. Flying things, stage trickery. There are lots of unknowns in the room.”

On the way down I see Aedín Cosgrove, who has arrived early to get a head start on her lights, which she and her team will be focusing until 3am. I hope it goes well, I offer. “Oh, it better,” she says.

Ready for the cast

As planned, the city of Mahagonny springs up overnight. The next day the cast relocates to the venue, whose frayed grandeur is accentuated with red velvet and exposed stage walls. The earnest noise of construction has ceded to the whoops and applause of the ensemble, as a cast member appears in costume for the first time, or stage manager Paula Tierney carefully outlines the correct procedure for using a staircase (this Mahagonny, unlike Brecht and Weill's, is firmly in line with fire and safety regulations).

Director Lynne Parker considers the contradictions of the undertaking: the loose approach necessary to adapt to the space, together with the precision demanded by opera. "The precision is all in the score and the text," she says. "That's the map. [Musical director] David Brophy is dealing with a subatomic level of precision and I'm trying to invent the wheel. There's still a spirit of adventure, but now we have to get it under control."

Brecht's contemporary, Walter Benjamin, may have been influential. "What is at stake today in the theatre can be articulated better in relation to the stage than to the drama," he wrote of Mahagonny. "It is a matter of covering up the orchestra pit." Parker's production eliminates all distance between the audience and the performer, so it is both immersive and surround-sound. Parker is fascinated by one of Brecht's remarks – if art imitates life, it does so with special mirrors – and wonders what those mirrors might be in a contemporary production. (One example might be the parallel Mahagonny, a partly promotional exercise created by Maverick TV, which imagines two contemporary characters lost in the debauched city through tweets, blogs and videos.)

“We haven’t used mirrors as much as I thought we would, but it’s still about how you look at things,” says Parker. “Brecht proposes an extraordinary new perspective which dislocates the audience and delivers a shock to the system. Then Weill provides an exciting and really theatrical score that also gives you an emotional rush.”

Before opening, Mahagonny already seems to have risen: in architecture, in neighbourhoods, in energy. All it needed were new inhabitants.

Rise and Fall of the City of Mahagonny is at the Olympia for six performances from June 13-22