Last fall, Larry and Fred Frank of Frank Productions were stunned when city officials pulled support for the Franks’ plan to build a 2,000-seat music venue on the 1000 block of East Washington Avenue.

A fixture in the local music scene for 50 years, the concert promoters had hoped to build their first brick-and-mortar venue in Madison, Larry Frank tells Isthmus. But with the project scrapped amid unresolvable concerns over the proposed venue’s impact on traffic and parking in the nearby Tenney-Lapham neighborhood, they began to look for options out of state.

“We were considering Nashville,” Frank says. But a newly announced agreement with Gebhardt Development has brought a new plan for a 2,300-person, 35,000-square-foot Frank venue back to Madison, where it will be a part of a $69 million development on the 800 block of East Washington Avenue.

“This is going to be a state-of-the-art facility,” Fred Frank says. “This is going to allow Madison to compete against [venues] in Milwaukee and Minneapolis.”

The proposed concert hall’s layout will be unique among Madison venues by emphasizing open floorspace, says Charlie Goldstone, president of Frank Productions’ concerts group. The main floor features a lower pit area in front of the stage with standing room for about 1,500 people and an upper balcony with a capacity of about 800, including 300 permanent seats.

Asked whether the venue’s capacity and location would pose a competitive threat to comparable venues like the Orpheum or the Capitol Theater, Larry Frank says “definitely not.”

“We’re building this venue for 10 years down the road,” he says. “As Madison grows, we want to make sure we’re the right size.”

The Gebhardt project, known as the “Cosmos,” will also house offices, retail space, the Madison Culinary Center, an American Family Insurance building, space for entrepreneurial hub StartingBlock Madison and a 600-stall parking structure that would be owned and operated by the city parking utility.

The Cosmos will be the latest of several new Gebhardt projects in the Capitol East District — the Madison-based developer also built the $39 million Constellation residential and commercial building and is in the process of building the $90 million Galaxie project, which will house apartments and a Festival Foods grocery store.

Gebhardt first pitched the Cosmos redevelopment to the city last fall — around the time the Frank’s venue lost support. The original proposal included plans for a smaller, 1,500-person venue that would have housed the headquarters of T Presents , a Brooklyn-based independent event promotion company founded by Madison native Toffer Christensen.

But last week, the developer revealed new project details that showed that the plans for the music venue had changed. Gebhardt CEO Otto Gebhardt tells Isthmus that his company decided to part ways with T Presents after a financial analysis found that Christensen’s plan for the venue “just wasn’t sufficient.”

“We had to look for something else to fill the space,” Gebhardt says. “It had nothing to do with the Franks replacing T Presents.”

Gebhardt considered other tenants, including a movie theater, before he ran into Larry Frank two months ago and asked if Frank was still interested in a music venue on East Washington.

But Christensen says his two-year relationship with Gebhardt — a period during which the two partners had worked closely on project design, buildout costs and purchase price — began to sour about six weeks ago when it came time to finalize the agreement.

“We presented an accredited [certified public accountant] evaluation expert’s favorable analysis of our business plan, proof of funds of over $15 million from our primary investor and had bank financing lined up,” Christensen writes in an email. “The deal terms were shifted on us at least three times.”

Christensen says he asked to meet with the developer to discuss the new requirements and even offered to put an additional 25% of the down payment into an escrow account.

“Everyone on my team had felt something fishy may be going on,” Christensen writes. “At one point [I] texted the developer’s architect saying, ‘I feel like I’m being Franked here,’ to which he did not reply. The developer then sent us a letter saying he was ceasing negotiations and provided no founded reasons for doing so.”

Christensen has accused Gebhardt of unethical business practices and urged a city committee to reject the developer’s proposal, but Gebhardt says he’s “disgusted” with the allegations.

“It’s absolutely untrue,” he says. “We stuck with [T Presents] — maybe longer than we should have — and put a lot of time into this. To say we were not negotiating in good faith is false.”