In 1978, Factory Records started in a two-bedroom flat in Didsbury, Manchester. It was driven by passion, not money. Sleeves were assembled in clouds of marijuana smoke, posters designed by art students. But when its founders moved into Charles Street, a lavish and expensive office, things changed. ‘The joy went out of it the day they hired an accountant,’ Stephen Morris of Joy Division, one of the first bands signed by the label, told the Guardian in 2018.

Almost thirty years after its demise, a £186 million arts venue is taking on The Factory name – and attempting to capture its culture-defining legacy. Since its announcement in 2014, the government has forked out £78 million in grant funding, and the National Lottery £7 million. This is, on the face of it, a noble effort to ‘level up’ and redraw the UK’s cultural map: when finished in approximately 2022, the space will be one of the largest purpose-built venues in the world, a permanent base for the Manchester International Festival (MIF).

Yet what is branded as a modern and innovative hub for Manchester does not necessarily serve its people. ‘Most people who live in the city will never go to The Factory,’ says Stephen Pritchard, an artist and academic specialising in community empowerment. ‘It’s for folks with money, which is a very small minority of the population.’

Expanding the artistic offering was seemingly never the core motive, anyway. Dance, theatre, music, opera, visual arts, popular culture, and innovative contemporary work may come together, but this is at its heart a gift to capital. The British government is increasingly using social institutions to mask urban regeneration, explains Nicholas Thoburn, a sociology and culture lecturer at the University of Manchester. ‘We should expect the same consequences of gentrification, but faster,’ he says.

Cities benefit from public funds, of course, and the venue is set to generate £1.1 billion in the decade after it opens, with an estimated 850,000 visitors a year. But it’s ultimately the developers who will profit. The St John’s and Trinity Islands districts of Manchester—expensive accessory housing developments currently underway—give us a possible glimpse of the kind of future with which The Factory is looking to align itself.

Both St John’s and Trinity Islands are backed by Allied London, which fashioned Manchester’s shiny Spinningfields site, labelled the city’s financial centre. Their total construction costs are expected to reach £1 billion, including hotels, showrooms, parks ‘for impromptu community happenings, relaxing, ping pong, chess and horticulture’, and 3,000 apartments – none of which will be social housing.

Locals, inevitably, will be priced out. Manchester faces a looming ‘growing crisis’ as its housing infrastructure fails to keep pace with expected job growth because of its ‘misguided’ developer-led regeneration approach, according to an Alliance Manchester 2018 Business School report. Nearly 50,000 new mostly-private homes are planned in central Manchester by 2040, but some 80,000 people are currently on Greater Manchester’s social housing waiting list, with only 2,000 affordable homes being built every year.

‘For any substantial development to not include social housing is deeply problematic, particularly in this period of upheaval,’ says Rowland Atkinson, an expert in social inequalities. ‘This is a city dancing with the devil. Genuinely, I cannot believe the investors are getting away with this. Even affordable housing is easily lost when sold. And I highly doubt these flats will be reasonably priced, anyway. Low-to-moderate income residents have not been considered.’

The community arts sector too failed to be included in The Factory’s £186 million vision. Last December, the venue received a £21 million cash injection from the Department for Culture, Media and Sport and Arts Council England. The council is also still working towards finding the rest of the funds—up to £32 million—by selling off land and bidding to organisations such as the Arts Council and private companies. Meanwhile, Laurence Young, a freelance theatre director and maker in Manchester, was recently forced to close a £200 hardship fund due to ‘sky-high’ demand.

England’s small art organisations face a dire future ahead, heightened—but not instigated—by the pandemic. ‘I know a lot of creators who have been forced to leave the industry,’ says Young. ‘It’s near-on impossible to get funding; large organisations just hoover it up.’ The theatre-maker maintains that culture is becoming ‘privileged’ and ‘far-removed’. ‘Grassroots artists deserved this money,’ he says. ‘They understand the city.’

This year-round home for MIF, ‘where we invent tomorrow, together’, does not resemble the style of ‘Madchester’ culture that it is appropriating. It is in fact these very developments that destroy the concept. In 2002, the Hacienda, a nightclub largely financed by Factory Records, was demolished to make way for a block of flats, controversially named The Hacienda Apartments. I ask Pritchard what he thinks of the approaching  ‘Factory’ name. ‘Terrible!’ he says. ‘Offensive, actually. Today’s ‘factory workers’ [the city’s working class] won’t even secure a job in its café.’

Last month, opera and theatre director Deborah Warner unveiled ‘Arcadia’ at The Factory, a one-night-only sound and light installation. It was inspired by an 1842 watercolour of Manchester by William Wyld, an overtly romantic depiction of the city’s smoking chimneys, accentuated by the golden light of the setting sun. The world’s greatest producer of cotton textiles was subject, at this time, to worker overcrowding and slum conditions, causing severe housing problems. With its spate of expensive developments, it may be this history that Manchester is returning to – not any kind of ‘levelled-up’ future.