The Arlington County Board approved plans Tuesday to redevelop part of Virginia Square, making way for the construction of a 12-story residential building and a black box theater to serve the county's nationally known Arts Incubator program.

The board voted unanimously to rezone property at 3901 N. Fairfax Dr. from lower-density commercial to higher-density mixed-use. The board voted 4-1, with Vice Chairman Jay Fisette (D) dissenting, to approve development plans for the site near the Virginia Square Metro station, which is currently occupied by a funeral home and parking lot.

Developer Trammell Crow Residential plans to build an L-shaped residential building with 135 condos (including seven affordable housing units) that would wrap around the existing funeral home. The building will include 2,648 feet of ground-floor retail space, three levels of underground parking, a public plaza that will take up one third of the property, and a 75-seat black box theater that would be managed by the county and located in the center of the ground floor with frontage along Fairfax Drive and Quincy Street.

Black box theaters have flexible stages and seating, depending on the show, and are painted entirely black, giving them their name. Officials with Arlington County's Cultural Affairs Division said the theater will be another building block in the Arts Incubator, an innovative government program that has been supplying space, advice and support to county theater, dance and music groups since 1990.

In 1996, the program became the first of its kind to win an Innovations in American Government Award from Harvard University's Kennedy School of Government and the Ford Foundation. Chosen from more than 1,500 applicants, it was hailed as a model for arts support in a time of declining government funding.

Today, the program has an annual budget of about $800,000.

The new black box is designed to meet the specific needs of the county's small professional theater companies. Officials said they hope to find two resident companies to share the theater, with the idea that each would eventually grow strong enough to occupy its own independent space.

"A lot of small theater groups operate in Arlington, and they're all stretched for space," said Norma Kaplan, Cultural Affairs Division chief for the county's Department of Parks, Recreation and Cultural Resources. "They want longer runs, and we can't accommodate them. This will give us a new resource to help them expand."

Many of the companies have relatively small annual budgets averaging $250,000, Kaplan said, making it hard for them to run their own theater space.

Kaplan said the county's arts commission will appoint members to work with her to develop a request for the proposal, which will be sent to resident theater companies and George Mason University, which is interested in theater space for its students. Groups will be asked about their programs, budgets and how they would use the space. The Arts Incubator program operates six theater facilities of varying sizes (from 75 seats to 750 seats) and pays most of the associated costs.

Current plans call for the county to lease the black box space to two theater companies, which would pay the county a 10 percent ticket surcharge -- as other arts companies do -- as well as pay for any management costs associated with the theater.

"They're always strapped for cash," Kaplan said. "This provides them a very low-cost space to continue to develop but a step up from working in a shared facility [among other arts groups]. They figure out what it's like to run their own space."

Kaplan expects interest in the space to be high.

"I know we'll be able to fill [the slots] easily," she said. "Not only will it help the two groups who go in, but it will leave space open in the other facilities for the other groups. This helps everybody."

Officials said the theater could be open as early as 2007.