Something is happening in Thomas Street - in fact, several things - and one of the catalysts for change, as he likes to see himself, is Harry Crosbie. The Docklands entrepreneur may be on "the wrong side of town" with his new venue opposite John's Lane church, but there is no doubt that he's in his element.

Vicar Street, a bar and live music venue - called after the side-street on which it is located - is the kind of project that demanded guts. But its impact was immediate, mainly because nothing even remotely like it has been seen in the Liberties since the time of Dean Swift. Almost single-handedly, it has lifted Thomas Street onto a new plane.

It would be hard to miss. The front stands out proudly at an important corner on the street, its presence marked by the totems of artist Patrick O'Reilly's "Kings of the Boundaries" - five colourfully painted ferro-concrete heads mounted on steel poles on the footpath. They succeed admirably in drawing attention to the place.

The really inspired decision by Holohan Architects, who designed the £3.5 million scheme, was to create a four-storey glazed projection at the corner, mounted on stainless steel bow-strings and rubber suction pads.

This shows off the double-height bar to best effect, though one might have done without the ubiquitous Guinness sign. "Entertainment is primarily a night-time activity and we believed that light was critical to the success of Vicar Street," says Gar Holohan, who specialises in leisure-related projects. "We toyed with the idea of a mezzanine, but in the end we came down in favour of creating a bar with strong features in the full volume of the space."

Harry Crosbie, described by his architect as a "creative genius but also a businessman", put in a huge baroque fireplace facing the glazed screen. He bought it at the "throw-out" sale after the 1974 fire at Powerscourt House and had actually been using it as a barbeque in the back garden of his former home on Shrewsbury Road.

Mr Crosbie says he wanted "something big and swaggering" and the Siena marble fireplace from Powerscourt was "just the thing." Mounted on a granite base, with outsize gilded lettering spelling out VICAR ST above, it grabs the attention of passers-by, particularly at night-time when there is a fire blazing in the grate.

The interior is emphatically not from what Mr Holohan calls the "Dial-an-Irish-Pub" design school. It is utterly contemporary in style and made of the best quality materials - oak-planked flooring, black Kilkenny limestone bar top, large wooden tables, an incredibly tall bar unit and all the walls wainscotted in simple fielded panels.

These are reminiscent of the Clarence Hotel, in which Mr Crosbie has a major interest, and should last as long; it is impossible to imagine anyone in his right mind throwing it all out. The giant scale of the place is also emphasised by full-length portraits and by a very large early 19th century French silk tapestry that once hung in Versailles.

The U-shaped bar is lit by lamps with outsize cylindrical aluminium shades - "we made them out in the back yard", according to Mr Crosbie - and the expensive-looking bar stools are extraordinarily comfortable to sit on. "It's about doing things properly and with style and not chasing the last buck," he says proudly.

His idea was to create a "big, buzzy bar" and he has certainly succeeded. By day, it has become virtually a canteen for the National College of Art and Design, whose transfer to Thomas Street more than 10 years ago created hardly a ripple. By night, it is packed by a clientele that likes to drink and chat in high-quality surroundings.

"People who wouldn't be sussed about architecture pick up on quality," as Mr Crosbie puts it. "I think they enjoy volumes and it pays you back. The idea was that we would build it in a generous way. And though obviously it has to be commercial, we haven't crammed things in. You don't have to be miserable and mean in development terms." The back of the bar opens onto the foyer of his new venue - a 760-seat "warm black box" with seating around tables on the ground floor and tiered seating on a U-shaped balcony above. Sightlines are excellent and no seat is more than 44 feet from the stage. Over £200,000 was invested in a first-class, "CD-quality" sound system.

Hewn out of a shed-like warehouse, Vicar Street was designed to be a funky venue, a small intimate place where performers of all kinds - including rock bands - "can rehearse or do an experimental gig or just play for the craic", as Mr Crosbie puts it. And the acoustics are so good that it is possible to play without any amplification. "I've spent years and years looking at shows and what people want is intimacy," he says. The other thing they want, apparently, is to have a drink during the show. Even seats on the balcony have their own pop-up tables, so there is no distinction between them and seats on the floor. Service is very discreet, to avoid nuisance.

Vicar Street is also a multi-purpose venue. Tables and chairs can be taken out and put into storage to turn it into a television studio, recording studio or even a dance-hall. It can also, more obviously, be used as a theatre - though completion came too late for it to be included as a venue in last year's theatre festival. The original intention was that Christy Moore would launch Vicar Street by playing nightly for a full month and, thereafter, once a week. But he had to pull out at the last minute, so the promoters have had to "build up our business as opposed to having a business", says Mr Crosbie, who expects it to be in profit by the middle of this year.

He really enjoys the "real and raw" atmosphere of Thomas Street. "It's not prettied up for tourists. This is the Dublin I was brought up in, I understand it and feel comfortable with it. For me, though I've admired it all my life, Temple Bar is too dense, there's too much going on, and it's become a pastiche of itself. I just don't like it anymore."

The whole idea behind Vicar Street, he says, was "to identify a new part of Dublin which hadn't `happened' yet". However, it would not have been possible without the benefit of urban renewal tax incentives, because the sums simply didn't stack up.

"I could have made more money building warehouses, but there's no fun in that."

Performers at the venue have been impressed by the backstage facilities, which not only include well-appointed dressingroom suites, but also a garden and a roof terrace where they can relax at night-time and be inspired by a spectacular view of the great stocky spire of Pugin's Augustinian church right across the street.

The building is finished in red brick on a limestone base with zinc panels over the entrance to the upper floors. Around its frieze are the words of a U2 song: "Listen as hope and peace try to rhyme. Listen over marching bands playing out their time."

And up the street, by some extraordinary miracle, St Catherine's is being turned back into a church!