The Capitol Hill Arts Center is supposed to be an arty paradise--an exciting for-profit experiment, a multidisciplinary arts center, and a socially responsible business. A few weeks ago, I got an anonymous e-mail alleging it's actually a fucked-up, dysfunctional mess and its CEO and artistic director, Matthew Kwatinetz, is a bullheaded tyrant. According to the tipster, CHAC staff and tenants would corroborate.

It sounded interesting. CHAC has, in fact, built a remarkable following for an organization that's only three years old, but it has also lost a litany of players since its 2002 opening, from key staff to organizations and events: Seattle Poetry Slam, theatre simple, SexLife Live!, Raqs Serpentine, et al. Others, like the design business Substudios, are thinking about leaving. Most significantly, Static Factory Media (an artist-development company with a recording studio and record label), which joined with CHAC to run the downstairs venue and bar, has announced it wants out.

The rest of the story is a tangle of passionate, unverifiable opinion. Sky Darwin (who claims to be a CHAC cofounder, although Kwatinetz maintains he's the only founder) describes the organization as "opaque, glacial, and host to some very strange internal politics." He's not alone.

Karen Finneyfrock (Seattle Poetry Slam host and another self-identified cofounder): "It could have been the greatest thing ever, but then came the power grabs and money squabbles."

Amani Loutfy (formerly of Static Factory): "I think everyone feels mistreated, on all sides."

Michael White (Lower Level technical director): "The first generation or two of CHAC supporters and laborers seem to share a feeling of betrayal."

Matthew Kwatinetz: "We have made concessions to try and make the partnerships work…. We try to keep communication open and serve our mission and our communities."

How did "the greatest thing ever" turn into this spirited game of he said/she said? There are the usual control issues, personality conflicts, and minor off-the-record sordidness, but many of the battles might have been avoided were it not for a simple architectural fact: CHAC's beautiful brick house was built in 1917 and was never soundproofed.

In working together on the Lower Level bar, CHAC and Static Factory have quibbled over contracts, money, and branding, but noise has been a real killer. Sound resonates through the building: theater noises disrupt recording in the studio and background music in the bar can bleed into the theater.

"Some unsuspecting artist might beat on a drum or turn up the turntables and five minutes later an infuriated actor would run downstairs, yelling at whoever was closest to the sound," said Finneyfrock. "The conflict was simple, but the way it was dealt with created huge resentment."

New bar acts were hard to coordinate and established ones felt squeezed out. Some have left for greener pastures, like the Poetry Slam, which got a better deal at the Mirabeau Room. "What we get is so much more, it's hard to compare," said Finneyfrock. "We're paying half as much to the venue, they provide the sound person and bouncer, and we've don't have to pay 10 percent of our door charge."

Promotional support has also been a point of controversy. Finneyfrock and others say the lion's share of CHAC's PR efforts go to the theater. Kwatinetz disagrees, saying CHAC spends twice as much for Lower Level promotion as it does for theater. Static Factory, which poured heart, soul, and dough into the bar, feels like an emphasis on theater cost them an investment and a home. "But without Static Factory, CHAC, and especially the Lower Level, would not be possible," said Darwin. "I believe they were used." CHAC counters that it bore the majority of the bar-construction costs (a claim Static Factory doesn't dispute) and has been fair and flexible in trying to find a solution to the noise problem.

Of course, this is a story about arts in Seattle, a nest of resentment and backbiting, where everyone is suspect except the person you happen to be talking to. Maybe Kwatinetz is a tyrant (or a visionary--it's a fine line) or maybe the disaffected departed mistook CHAC for a democracy instead of a business. Maybe CHAC just realized it wants to be a theater, and broke a few music-loving hearts in the process. Nobody, least of all the participants, can agree.

Two weeks after the anonymous e-mail, I sat in CHAC's theater watching Death of a Salesman, surprised by the aptness of Miller's themes: self-delusion, fraught family romance, remarks overheard through thin walls. More simply: Nobody's clean and people gathered under one roof always fight, lie, or both.