Chicago Architecture Biennial 2015: artist Theaster Gates has converted a derelict bank building in a low-income Chicago neighbourhood into a cultural venue with galleries, event space, and libraries for books and vinyl records (+ slideshow).

Called Stony Island Arts Bank, the project is the latest by Gates, a social activist artist and urban planner known for purchasing and transforming dilapidated structures in the city's South Side district into cultural facilities.

Encompassing more than 17,000 square feet (1,580 square metres), the new arts centre will host the opening event on Saturday for the Chicago Architecture Biennial.

During a press preview, Gates commended the Biennial organisers for thinking beyond Chicago's architectural icons.

The city has an "amazing history of racism, segregation, and a history of red-lining and housing covenants that work against the poor and black and brown people".

Gates calls the Stony Island Arts Bank "a laboratory for the next generation of black artists and culture-interested people; a platform to showcase future leaders," according to a statement.

"I feel great that we have a mayor and an administration that is thinking about what it means to be a city of neighbourhoods, and trying to create new opportunities for more complex architectural forms to emerge," Gates said.

The three-storey facility contains exhibition space, libraries, a reading room, and offices for the Rebuild Foundation, a nonprofit that Gates started in 2010 with the aim of merging art practises with community redevelopment.

The organisation's in-house design team oversaw the building's renovation.

"We changed what we needed to, but we didn't want to erase history," said Mejay Gula, an architectural designer who started working for Gates in 2010. The most significant structural modification involved replacing the floor between the second and third levels.

Dating to 1923, the original Neoclassical structure – made of wood and steel and clad in white terracotta – was designed by architect William Gibbons Uffendell and was known as the Stony Island Trust & Savings Bank.

Located in a once-thriving neighbourhood, the building fell into disrepair over the decades and has sat vacant since the 1980s.

Gates purchased the property from the city in 2013 for $1 (£0.66). To help fund its refurbishment, he salvaged marble components from the structure and crafted them into 100 rectangular blocks he dubbed "bank bonds".

Each block was inscribed with the words In ART We Trust, and he sold them at Art Basel in 2013 for $5,000 a piece. The organisation also hosted fundraising events for the renovation project.

The ground level contains a double-height atrium flanked by columns and topped with a ceiling lined with patterned cream-coloured tiles. The rear of the space is outfitted with a repurposed oak bar.

The second storey features a 23-foot-high (seven metre) library filled with books from the former library of Johnson Publishing, which specialises in texts on African-American culture and publishes Ebony and Jet magazines.

The shelving in the compact room is lined with vertical wood beams that were acquired from a salvage warehouse. "We always are trying to use reclaimed material," noted Gula.

The second level also houses a reading room and an area for the storage of 60,000 antique glass lantern slides. Featuring images related to art and architectural history – from the Paleolithic period to the modern era – the slides were donated by the University of Chicago and the School of the Art Institute of Chicago.

The third level contains offices, additional exhibition space, and a wood-panelled room with a collection of vinyl records by the producer and DJ Frankie Knuckles, considered the "godfather of house music". Gates acquired the albums after Knuckles died in 2014.

The top level also houses a small collection of racist collectibles, called "negrobilia." The items once belonged to Edward J Williams, a prominent African-American banker in Chicago, who acquired them "in an attempt to remove offensive materials and stereotypical images of black diaspora from circulation," according to the Rebuild Foundation.

The Stony Island Arts Bank will be regularly open to the public Tuesday through Saturday starting on 6 October. In conjunction with the Chicago Architecture Biennial, the venue is hosting an installation by Portuguese artist Carlos Bunga that consists of tall columns made of cardboard.

Michelle Boone, Chicago's commissioner of cultural affairs, said the arts centre is a significant addition to the South Side neighbourhood, where she grew up.

"I have spent my life driving back and forth past this derelict building," she said during Friday's press event. "So to sit here in this space, surrounded by so much cultural heritage and beauty, is really meaningful."

The new arts centre is located near Gates' Dorchester Projects – a collection of four vacant buildings that have been converted into community venues. "The Bank is our fifth and by far our most ambitious project to date," said Ken Stewart, CEO of Rebuild Foundation.

The Biennial, which opens 3 October 2015 and runs to 3 January 2016, features installations, exhibitions and special events. More than 100 designers from around the globe are participating.

Photography is by Steve Hall and Tom Harris/Hedrich Blessing.