This time with a Rmb50bn art centre that includes an aquatic theatre.

Years after it changed from a scruffy underground hotbed of studios into a trendy district for galleries, boutiques and offices, Beijing’s famed 798 art district now faces another transformation: into an upscale luxury and cultural area.

“The Beijing government has thought about improving 798’s quality in terms of environment, function and utility for a long time. Bungalows in the art district now will be replaced by skyscrapers,” project general manager Wang Jianjun says. “[It] will be the biggest art centre in China with the best service.”

The Beijing Municipal Government signed an agreement with Melco International Development Company to establish and international cultural art centre on 29 September, the Macau Daily newspaper reported. Wang said that the Rmb50bn ($8bn) project will have around 1.2 million sq. m of space and be located within and near the current 798 boundaries. Designed by I.M. Pei’s son Li Chung Pei, the project’s first phase will begin in early 2013, and will include a “laser stage”, a “primitive art community”, a gallery, a luxury hotel and apartments, and facilities to examine and trade art. A “House of Dancing Water” aquatic theatre will be modelled on a venue of the same name in Macau, but will be more than twice the size of the original.

The proposed art centre has already been heavily criticised by the public for its proposed heavy use of water in drought-prone Beijing, for destroying the character of 798, and for its misdirection of public funds and potential for corruption.

On the Chinese microblog platform Weibo, the theatre impresario Meng Jinghui stated that Rmb50bn could build 25,000 nicely-sized theatres around China. “The National Theatre cost Rmb3bn, the Beijing CCTV Tower Rmb5bn. An aircraft carrier only costs Rmb10bn, and a battalion Rmb50bn-65bn,” said Fang Fang, the director of Beijing’s Star Gallery. “What are they trying to build with 50 billion?”