The old Fairland Grocery store is one of the biggest spaces in Kensington Market, and if hospitality group Beats, Eats and Life gets their way, it will soon be Toronto's newest place to watch live music.

J. Joly, one of the founders of Beats, Eats and Life, describes their vision for the 1950's family grocery as, "a significant venue for cultural, and especially music-forward, independent artists."

They say the plan is to open up a small restaurant in the front of the building, and convert the rest into a multi-purpose space, which would include a live music venue.

"We expect to do a lot more stuff around rehearsal rooms, recording studios, vinyl presses and stuff like that, within the space," Joly said.

J. Joly is one of the founders of the organization that wants to transform the building that once housed Fairland. (John Lesavage/CBC News)

This is not the group's first attempt to bring art to the Fairlands building.

This past summer they proposed an adult playground called Fairland Funhouse which was to include an art maze and virtual reality exhibits.

While it was supposed to open last August, that project has been put on hold until the spring.

The plan would be to incorporate some of those ideas into the new project.

Where things fall apart for the residents of Kensington Market, is the size of the liquor licence Beats, Eats and Life is applying for.

They want a licence for 612 people, which would accommodate the entire space, and not just the small restaurant they are proposing for the front of the building.

Dominique Russeel is with the group, Friends of Kensington Market. She says residents fear Fairland will become a nightclub if the current tenants win their bid for a 612-people liquor licence. (John Lesavage/CBC News)

"Six hundred people has a huge impact," said Dominique Russell, a member of a group called 'Friends of Kensington Market.'

Russell says many residents are concerned that this will become more of a nightclub atmosphere.

"There's residents within five metres of that building," she said. "If you think about that as a licensed venue, it would be one of the biggest licensed venues in the city, in one of the densest neighbourhoods."

The two sides met for several hours Tuesday to discuss the issues. Lawyer Ryan MacIsaac was there to represent Beats, Eats and Life.

Hospitality group Beats, Eats and Life would like to transform the old Fairland into a multipurpose cultural centre. (John Lesavage/CBC News)

"We've been clear from the beginning, no nightclub, we do not intend to open a nightclub," MacIsaac said. "In order to make that a sustainable, viable business model, we do need to have liquor sales."

That may be the plan now, but Russell says people are concerned that plans could easily change if they are granted a liquor licence of that size.

"What we're concerned about is the long-term impact of a liquor licence of that size in the market. It's a concern as well for the character of the market," Russell said.

Tuesday's meeting ended in a stalemate, with neither side willing to budge. MacIsaac says Beats, Eats and Life will now take their appeal to the next level.

"There will be a hearing before the licence appeal tribunal, most likely in late February, early March," he said.