The backers of a conservatorium of music at Canterbury University say Christchurch will miss out unless the council funds the building.
A hearing is being held on Tuesday on a proposal by Christchurch City Council to fund a $20 million building on the Arts Centre site and lease it to the university.
Critics says the conservatorium does not fit with heritage values and the council should not be involved with funding.
Some residents who made submissions on Tuesday say there has not been enough consultation and feel the council has already made up its mind on the issue.
University Vice-Chancellor Rod Carr says the proposal is simply to take advantage of the council's access to cheap loans and there would be no cost to ratepayers.
He says that without council funding, the conservatorium will have to be built at the Ilam campus, rather than the city centre.
Supporters of the conservatorium say it will breathe new life into Christchurch, in spite of criticism that the building is too big and inappropriate for the site.
Further hearings on the funding proposal will be held on Friday and next week.