The Pagoda was designed and built in the early 1980s it was 75% funded by the government’s Inner City Partnership and 25% by City Council, at a cost of £228,000. It was felt to be essential for the city its Chinese community to have a purpose built Chinese Arts and Community centre, it was the first in Europe. Its function is to create harmony and understanding, hence the name Pagoda of a Hundred Harmony. Mr and Mrs Liao (known as Li) were brought over from China to manage the space and to create the Pagoda Chinese Youth Orchestra (PYCO) the first in Europe.

In 2009 with the first round of funding cuts by City Council PYCO became a separate entity within the Pagoda building trading as Pagoda Arts, a registered charity, with multiple funding streams.

The building continued to be run and funded by Liverpool City Council up until 2011 when all staff were made redundant with the exception of Mrs Li who continued as the arts & community officer at Pagoda. All of the original services to the community were continued by Pagoda Arts on a voluntary basis, maintaining the core ethos of the function of the building as a bridge between the Chinese community and Liverpool. It was agreed that Pagoda Arts would continue to manage the entire building in the interim.