The romantic notion of the starving artist – threadbare wardrobe, minimal furnishings, beans-and-rice sustenance – may finally have had its day, thanks to an undeniable trend that has emerged over the past couple decades. Art can be big business, and not just in cosmopolitan Meccas like New York and San Francisco. Across the United States, small and midsized cities are harnessing their creative energy to jumpstart their local economies, with often striking results. Across the board, the country’s nonprofit arts and culture industry has grown by 24 percent over the past five years – generating over $166 billion in economic activity a year.
In April, the Ford Foundation announced a $100 million program to develop artist spaces across the country. Luis Ubiñas, the foundation’s president, in addition to proclaiming the need to preserve and extend the United States’ cultural richness, cited the economic potential of artist communities in the foundation’s decision to commit such a large sum to the program. “We … believe that this investment in arts infrastructure will advance the well-being of our communities because artists and art spaces can play a significant role in boosting local economies,” he said.
It’s a reversal of the commonly held notion that artists drain resources, rather than attract them. Cities that have taken heed of this trend have been rewarded in multiple ways — first by rehabilitating and developing uninhabitable areas of the city, and second by attracting tourists, business, and well-heeled residents to those areas. One seminal example is New York’s Soho and Tribeca neighborhoods, which now exceed the famed Upper East Side and Central Park West neighborhoods in rental and real estate prices.
Artist Relocation Programs
Perhaps no city has been more successful in exploiting the economic potential of the arts than Paducah, Ky. The western Kentucky town of 27,000 got the formula just right when it implemented what has come to be known as an artist relocation program. Nine years ago, artists were lured to the blighted downtown neighborhood of LowerTown by the prospect of free home ownership and creative autonomy in developing their properties.
Mark Barone, a working artist who is largely responsible for establishing the program, initially contacted the city simply to get landlords to bring their buildings up to code. But as his effort continued, his vision evolved, and he eventually proposed a program that would revitalize a 30-square-block swath of LowerTown. What emerged from that initial effort has become a national model for how a struggling city can reinvent itself as a cultural destination.
Paducah ultimately hired Barone to spearhead a program that offered artists full financing on loans and$2,500 toward architecture services or related fees. Best of all, he sold them historic live-work spaces for a buck. In exchange, the artists had to renovate those landmarks and bring them up to code.
“When you’re going into these blighted areas, the incentive package has to be good enough where [the artists] can overlook the blight,” said Barone. “And if it’s not, you’re not gonna get anyone to come.”
In this case, the incentives worked: The first year, eight artists moved to LowerTown. In year two of the program Barone says that number increased to around 20. Today, over 100 artists live and work in the neighborhood. And they have shown a willingness to invest in their adopted community – the city spent about $3 million on the project in its first five years, while the artists themselves invested $35 million in the neighborhood’s buildings. As a result, LowerTown today has been transformed into a thriving community of galleries, shops and cafes. It’s just the kind of place that attracts visitors and tourism.
A study conducted last year by Americans for the Arts found that Paducah’s arts scene brought in $27.8 million in 2007 (an impressive number even before the recent recession), almost $22 million of which was generated by nonresidents. From that, the state government collected $1.3 million and the local government $473,000. “The property values in Paducah went up, tourism went up, the tax base went up,” said Barone. “All these things went up because of what we did. In the second year of the program, tourism went up by $10 million, and it kept going up thereafter.”
Paducah is hardly different in its skeleton than countless cities across the country. It suffered from both a loss of the economy that had helped it prosper (in this case, a uranium enrichment plant), and perhaps more substantially, from suburban flight. LowerTown, which is the oldest neighborhood in the town, was once a thriving, self-contained neighborhood. But as its older residents passed on, the next generation showed little interest in returning from their larger homes outside town. LowerTown’s homes were gradually chopped up into apartments and largely neglected. It’s a story repeated across the country.
Now, many of these cities are mimicking the Paducah strategy. Evansville, Ind., Pawtucket, R.I., and Oil City, Pa., provide just three examples of smaller cities that have wholeheartedly embraced the idea of the artist relocation program.
Eventually, Barone was lured to Syracuse, N.Y., where he is attempting to replicate Paducah’s success. He has also recently started a consultancy aimed at helping communities nationwide achieve prosperity through the arts. He is careful to note, though, that every city is different. “It has to be geared toward each community,” he said. “You can’t just shove the Paducah model into another community.”
The Other Model: Real Estate Developers
Paducah represents one of two approaches that have emerged for revitalizing urban districts via the arts. The other involves outside developers – most often on a nonprofit basis – coming in and renovating anywhere from one building to an entire city block. The biggest of these organizations is Artspace, which got its start in 1979 when it developed a live-work space for artists in St. Paul, Minn. “They were empty warehouses,” said Wendy Holmes, Artspace’s senior vice president of consulting and strategic partnerships, of the future artist lofts. “Now there are 118 units of live-work space and 50,000 square feet of commercial space. Those two buildings became a huge catalyst for other developers and the city to invest in other properties nearby.”
Since then, Artspace has completed 25 developments, from Seattle to New York City to tiny Brainerd, Minn. And there are currently 15 more in the works. A characteristic Artspace development opened in 2007 in Buffalo, N.Y. The Artspace Buffalo Lofts have 60 live-work units plus 9,000 square feet of commercial space for arts-related businesses, carved out of the historic Electric Vehicle Building. Buffalo officials say it’s still too early to determine the Artspace Lofts’ impact on the Midtown area in which they are located. But Erika Mitchell, a performance and textile artist who has lived in the lofts for over two years, has seen a positive influence on the surrounding area in her time there. “I’ve noticed less crime and with ongoing art events held in the galleries, it keeps community residents engaged and involved in the arts, as well as area youth,” she said.
"Every individual artist is a small business."
–Catherine Gillespie, Chair of the Buffalo Arts Commission
A look at Artspace’s earlier projects may also provide an indicator: That first development in St. Paul, the Northern Warehouses, was worth $715,000 in 1987, the year before Artspace began work on it. In 2008, it was valued at over $4 million. The property generated $39,080 in local taxes in 1987, versus $97,676 in 2008, despite reductions in the effective tax rate during that time. The Northern Warehouses became a catalyst for the larger redevelopment of the neighborhood – area artists today consider LowerTown a hub for the arts in the St. Paul-Minneapolis area, according to a recent survey.
Unlike the Paducah model, Artspace retains ownership of the buildings it renovates, working to ensure below-market rental rates for artists. Rents at Buffalo Artspace Lofts currently range from about $300 to $800 per month, which Holmes says is well below the market rate for the area. Still, some, including Mark Barone, worry that rental can be a drawback to the long-term impact of artist developments. “Ownership is key. I don’t believe in rental – there’s no stability in it,” he said. Artspace maintains that its model does help create permanent arts communities. “We’re creating affordable housing for artists … and keeping rents below market in perpetuity,” said Holmes.
Nonprofit developers like Artspace work closely with city government to make a project a reality. 80 to 90 percent of project funding usually comes from a tax dollars, according to Holmes, with the remaining portion coming from the private sector. (Microsoft’s Paul Allen’s foundation was a supporter of a 2004 development in Seattle, for example.)
Barone agrees, adding that knowledge of how the arts work is also essential. “We’ve always known that the arts are a huge economic engine if you understand it,” he says. “And if you can do it in western Kentucky, you can do it anywhere.”
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