The club, tentatively dubbed "Skye," is slated to open in the late spring to early summer of next year at 149 E. Franklin St., where Barr-Ee Station was formerly located.
Property owner Dan Markscheid said Skye will feature a first-floor dance area, a second-floor cocktail bar and a rooftop level that will offer patrons peace and solace.
Markscheid, who also owns Gotham and Alley Oops TreeHouse, said Skye would have its own unique atmosphere.
About 80 percent of TreeHouse's customers are UNC students, who also form the majority of Gotham's patrons, but Markscheid said Skye will cater to a slightly older age group.
"It will not be exclusively a student crowd," he said.
"I don't want people going in with preconceived notions."
Markscheid said the club will be aimed at an over-21 crowd but will offer entertainment for everyone ages 18 and above.
Skye will be the first ground-level club of its kind on Franklin Street, which Markscheid said will add to its appeal.
"When we open, I'm sure it'll be a big hit because of its location," he said. "We have a very nice reputation with the people in town."
Planning is still in its early stages, but Markscheid said he already purchased a $13,000 low fog machine and has contracted with High End Systems to provide lighting.
"We will try to create a positive, festive atmosphere," he said, adding that no other clubs in town have such advanced equipment.
Markscheid has yet to hire a disc jockey, but he said one possibility is a UNC graduate known for his work at various fraternity parties.
He also said the club will feature mainstream dance-oriented music, including hip hop and popular tunes. Hard-core rap will not be included, he said.
Markscheid said the dance floor will be open three or four days a week, but the martini bar will be open six or seven days.
Markscheid said there has been no opposition to Skye so far, but if any did develop, he said it would not be founded.
He said the club will attract people who now must drive to Raleigh in order to find an older-crowd dance club.
"This type of establishment can only benefit the whole area," he said.
"If a place is good, it's going to attract more people to (area businesses)."
Robert Humphreys, executive director of the Chapel Hill Downtown Commission, said he agreed.
"We are confident that they are going to build something nice," he said.
"I think it will be an interesting addition."
Markscheid said he is eager to move forward with his plans and already has begun clearing out the building.
He said Skye will be the most expensive but most exciting venture he has yet undertaken.
"I feel like I've been working toward this my entire life."
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