Elena K. Holy refers to it as “the P.U. era,” for post-“Urinetown,” the time after that musical, a breakout success at the 1999 New York International Fringe Festival, went on to Broadway and became a hit there, too.

For the next several years, in the sweltering heat of August, cars would descend from Midtown Manhattan, depositing industry big shots outside the festival’s sometimes scruffy downtown stages, where they would be allowed to skip the lines to scout for a smash.

“There was this point in our history where we really could’ve turned into just an inexpensive backers’ audition — just only Broadway-bound musicals with commercial ambitions,” Ms. Holy, the festival’s producing artistic director, said recently at FringeCentral, the festival’s pop-up headquarters at a former karaoke bar on Second Avenue.

The festival, known informally as FringeNYC, chose not to take that path. This year’s version, which opened on Friday and runs through Aug. 25, encompasses a diverse mix of 185 shows, mostly theater but also dance and other performing arts, at spaces scattered across Greenwich Village and the Lower East Side.