MANY years ago Dennis Chester, then going to university in Edinburgh, would stare in wonder at the chaos of Market Street. Dozens of businesses would pick up their fresh fruit and vegetables and more produce would be delivered. It was colourful and vibrant, and, in his words, a scene of mayhem.

For 40 years, Mr Chester has run a club, venue and bar on Market Street. Its name has changed over the years but it is at present called Electric Circus. For the past two years, he and his wife have been in cordial discussions with their neighbour, The Fruitmarket Gallery at 45 Market Street, about significant change to the venerable old street.

The gallery, a leading venue for contemporary art, has long looked to improve and revamp and expand its building but it is perched, like its neighbour, on the edge of Waverley Station. It is almost impossible to expand backwards onto the station, and, given the nature of a World Heritage site, is reluctant to extend upwards. So the gallery, led by director Fiona Bradley, would like to expand sideways into Mr Chester’s building, 36-39 Market Street.

Both buildings are owned by the City of Edinburgh Council and are leased. Mr Chester and the gallery agreed that the latter should take over the former’s buildings lease, an arrangement given the green light by councillors last week.

But for the time being, and possibly for the next two years or so, Electric Circus will remain open. As news of the Fruitmarket expansion broke (in The Herald), Mr Chester says some people thought Electric Circus was to close imminently.

It is not being forced to close; the plan to hand over the lease was agreed between both parties; also by the council. He says: “If it all goes to plan, Edinburgh gets a fabulous gallery. I love galleries. I think it is a win-win scenario. We want this to happen and it would be a fitting end to 40 years in Market Street for us.”

However, Mr Chester’s plan depends on The Fruitmarket raising the money needed to expand and re-imagine its gallery. The revamp of the gallery, which has held shows by artists such as Martin Creed, Phylidda Barlow, Jim Lambie, Louise Bourgeois, Christine Borland and Nathan Coley, will cost about £11 million. It is a difficult financial climate. Although the Fruitmarket has a little over £1m in capital funds from Creative Scotland, a large chunk of the funding will, it hopes, come from the Heritage Lottery Fund (HLF). This will be its second application for HLF funds, as the first was turned down earlier this year.

But if it succeeds, the gallery will, now it has been agreed with the council, expand next door to the building occupied by Electric Circus and, the council hopes, create a “premiere cultural space” in the heart of the city. Mr Chester believes it is “95 per cent” likely to happen: and he hopes it does.

But the building and expansion process is not likely to take place, even if funds are secured on time, for another two years. So until then, as Mr Chester underlines, it is very much business as usual, as it has been since 1978 at Electric Circus.