Together in eclectic dreams: behind the scenes at Summerhall

There is, almost surprisingly, a publicist for the project. But even that's not straightforward as it's Paul Gillon, who used to do press for abstruse Icelandic singer Bjork. Gillon comes out with statements like: "When it seems like you can say what Summerhall is, then we will change it."

We meet just ahead of the start of the Edinburgh Fringe, and McDowell is on a brisk tour of the strange and surreal warren that is Summerhall, a dizzying two-acre hotchpotch of architectural styles, ranging from a New Brutalist modernist tower block to an Edwardian Baroque college building and a horseshoe-shaped church.

The site is changing moment by moment. When McDowell peers into one room, installed with packed cabinets of avant garde art, he says: "I'm sure I looked in here yesterday and there was no sign of this." Walls are freshly painted in grey and some fittings have been stripped away but, on the whole, the set of buildings he bought for £4 million last year retains the look and smell of a veterinary school. McDowell prizes this. As he traverses the former histology lab, a room striated with old wooden desks and punctuated with gas taps and bowl sinks, he spots a young man holding a small pot of paint. "Are you sure that pot's not going to drip on to our lovely wood there?" McDowell asks. The man reassures him. "We love this institutional aesthetic," McDowell says. "Well, what's not to love?"

Venue 26 of this year's Fringe is unlike any other. Indeed, it is unlike any other arts complex in the world. It is also a permanent village, a growing community of artists, techno-geeks and other creatives. The closest comparison McDowell has come across is the Helsinki Cable Factory, which covers a far greater area and houses more artists, but that, as he points out, is not a programmed venue. Summerhall is almost bewilderingly vast and labyrinthine. For the newcomer it feels as if one enters its maze of corridors at one point, only to surface somewhere else entirely. There are airy labs, beautifully preserved lecture theatres and tiny, vertiginous spiral staircases which seem to disappear into the ground. In five years' time, one imagines, a story will surface about a person who has been living there, darting, unspotted, down corridors and vaulting through rafters.

At one point I am taken to the Secret Exhibition, a show that is accessible only to those who buy five tickets for shows at the venue. Obviously I'm not allowed to say which "major contemporary artist" this features, or where in the Summerhall anthill it is, but the journey is dazzling and makes the building the star.

One of the things McDowell is happy to tell me is what Summerhall is not about, and that is comedy. "Entertainment," he says, "should be a secondary outcome rather than a primary goal. We aim to challenge audiences, and audiences like to be challenged." As a Fringe venue it is so defiantly anti-stand-up that McDowell has proposed that next year the venue runs its own series of comedy nights, with the proviso that the acts can be performed in any language that is not English.

"So you can do it in Mongolian, Serbo-Croat, whatever language you like," he says. This, he believes, will support his contention that what most people take away from a stand-up night is "the form of the art, not the content". But his real problem with comedy is not its merits as artistic form, but its take-over of the Fringe in recent years.

"Theatre has shrunk," he says. "Music has shrunk. The Fringe has become very one-sided, and other arts have to up their game to retrieve the image of the festival as something for all the arts, not just comedy."

I had heard that McDowell had been harbouring a plan like this for many decades. "Yes," he says, "but you don't know what it will be until you get the opportunity." That came in the appearance on the market of the former Royal (Dick) Veterinary College just at the right moment. In some ways, the site has dictated what it has become, the scale of possibility, the grandeur of vision. It already has its own microbrewery, a Damien Hirst-style bar, plans for a cafe at the front, a literary library with a magazine, The Arts Journal, publishing out of its offices, and the 1960s' tower block has been turned into something called the Tech-cube, hosting digital start-ups, It hopes to house about 300 artists in studios by the end of this year, and 400 by the end of 2013. During next year's Fringe it plans a creche. It feels like a place where the pottiest ideas are considered, and realised – a women's art exhibition, for instance, that only women are allowed to view.

While its scope and shape may be somewhat defined by the mismatch of buildings, there's also a sense that the project is so wildly unconventional and ambitious it must be deeply imprinted with McDowell's view of the world and how to do things. An eccentric, Belfast-born polymath, who is rumoured to have inherited a multi-million fortune, his conversation is littered with cultural references – at one point he looks up at some exposed rafters and says: "Remember, this is the 500th anniversary of the Sistine Chapel – well, that's not exactly the Sistine Chapel but it's almost as interesting." He also has the air of someone who came of age in the 1970s and arrives dragging bits of' the decade in his wake.

Here is a man who studied art at London's Slade School of Fine Art and applied economics at Cambridge University and forged a career as an applied economist. But he was also once an assistant to the German artist Joseph Beuys – and lost two stone when he worked for 100 days on the Free International University at Documenta 6, the major exhibition of art that takes place every five years.

Summerhall has more than a little Free International University about it – McDowell defines it as a "site dedicated to the arts, research and education". Beuys, he believes, "would have loved this". He pauses then adds: "But I haven't found anybody yet who doesn't."

McDowell's specialism as an economist is "risk dynamics". One assumes he knows, then, what a financial gamble he is taking – or, since he has inheritance to squander, doesn't care. "We're not intending to lose much money," he says. Indeed, he hopes Summerhall can be an example of what the private sector can do in the arts.

But Summerhall is also coloured by long-running friendships and relationships, as well as new ones. McDowell was deputy chairman for the Richard Demarco European Art Foundation for 20 years, a period during which, he recalls, "Demarco's collection was mostly homeless, and certainly not getting any public money and therefore reliant on the generosity of others". So it's not surprising it seems like a haven for the radical, international and adventurous spirit of which Demarco has long been an advocate and it houses the million or so pieces of his collection. Like the Traverse, which Demarco co-founded, it also aims to give the Fringe a more permanent base. And it is bringing in the kind of shows that the one-time centre of physical theatre, Aurora Nova, once did. For many this is a welcome return. Previewing Summerhall's Fringe programme, theatre critic Lyn Gardner wrote: "To be honest, I'd take a punt on pretty much everything here, which draws heavily on Fringe spirit and the legacy of Richard Demarco. Hurrah."

McDowell points out that a project of this scale and ambition is "too big to micromanage". There are about 14 people on his management team, including Rupert Thomson who has created the dazzling 40-show theatre programme for the Fringe. "The whole idea is that it should be organic," McDowell says. "Nobody is an island and every person and organisation based here should find ways of participating with everybody else from time to time, even the artists with studios." The hope is that it will have the feeling of a small village. "We like that idea," he says, "and we like the fact that there are streets and so on, so you can feel it is that, and not feel that you are coming into just one building."

Somewhere at the centre of Summerhall is the Dissection Bar, where, this morning, coffee is being offered in pint glasses. They have run out of cups. The coffee is good, and you can also get bottles of Summerhall beer. But the absence of a cup seems to sum up something about the place. It is a giddy storm of ideas and projects, all of which seem to be coming together so rapidly that some of the details aren't quite there. And new ideas are still popping up all over the place. It's not clear whether McDowell is joking or very slightly serious, when, as we do our tour, he points to the area under the seats of a theatre and asks: "Can we do an exhibition under there?"

But no-one seems to be worrying. The occasional note of incompletion is what gives the place some of its absurdist vibrancy. The same feeling is there a week later, when, on the night of a private viewing, there is only a small fraction of the 30 exhibitions open.

It is as if the place is growing before our eyes like some speeded-up natural history film. One of the men pacing the corridors and frantically trying to pull the whole thing together is Paul Robertson, art dealer and owner of a 9000-piece collection of avant-garde work, Heart Fine Art. Sleep-deprived after 48 hours of non-stop work, he talks of pushing linoleum around at 4am, then energetically spews out a volley of stories as he guides us around a show that contains 3% of his collection. The works include, for instance, one of the editions of Marcel Duchamp's The Bride Stripped Bare By Her Bachelors. "I've never been involved in anything I love as much as this," he says, as he ushers us on to take a look at an exhibition by American artist Carolee Schneemann he is setting up,

The dealer, a former Labour party propagandist who was a consultant to Jack McConnell, is one of the big players in the creation of Summerhall. Perhaps because of this, he is privileged enough to have a "whole floor" of space in the building, including a living room and kitchen. He even has a bed, although he only uses it for a quick lie down. When he needs a sleep he nips to his home around the corner. Although he has known McDowell for only a year, he says he would "walk over coals for him". One of the stories he tells is of how he first met Richard Demarco at the Venice Biennale last year, bumping into him at the airport. Not long after, he was invited to his birthday party. There he met McDowell, shook hands with him, and declared: "You need to know me."

Robertson conveys the same feeling that McDowell does: these people are in the business of making the impossible possible. Of course this isn't always achievable – and, as McDowell points out, some things, such as his notion of a fabulous elevated walkway connecting the buildings, simply aren't going to happen. But the odd miss isn't what counts. What matters is that Summerhall seems like a small oasis, away from the bureaucracy that has afflicted much of the state-funded art world, a private sector place, seemingly without boundaries, where there are more green lights than red ones.

Will it work? Certainly, word of mouth is snowballing. Indeed, I forgot to mention the second rule about Summerhall, which is that you do talk about Summerhall, Or, at least, if you are in any way connected to the artistic and creative community, you talk about the strange vortex that seems to be developing off the corner of The Meadows, as more and more creative types are drawn towards it. You get caught up in the idea that perhaps a building like this could bring about some mini-renaissance in Edinburgh. You hear the rumours (some of them wild and preposterous). And you spread them. n

Visit www.summerhall.co.uk.