Friday, December 26, 2014

Artists As New Partners in Community Development

My daughter, Lily, described to me how she feels as an artist when urban developers use her as a way to gain attention for their latest city redevelopment scheme (and claim tax credits), but don't ever invite her or other artists to join as equity partners. Lily is concerned that art-makers of various kinds will never be able to improve their lives if all they get is access to specialized space, like performance space, rehearsal space or reduced rents.  Lily lived and worked in Baltimore for a decade, deeply invested in various art scenes, and has been on the periphery of several city efforts (like those in other cities) aimed at triggering redevelopment by encouraging investment in new arts districts.  The city lets developers know that certain abandoned buildings, in strategic locations, are for sale as long as proposals include a mix of affordable housing, commercial activities and art spaces (either subsidized units for artists, rehearsal spaces for arts groups or public performance spaces).  Developers submit bids, hoping that the sale price of the building will be low. They try to put together plans that will yield sufficient returns for them to convince insurance companies, pension funds and banks to invest in what they have in mind. Sometimes the city can add one-time federal state or local grants to help keep costs down. The arts community is rarely invited to be part of the earliest discussions.  For that to happen, individual artists or arts organizations would have to be given access to a great deal of information,  be offered technical assistance and the same level of respect that full fledged partners receive.

Nobody wants to think of themselves as the reason that someone else gets to make a lot of money. What usually happens is that a developer makes a deal with the city, gets the required approvals (while admittedly taking the necessary financial risks), finds the investment capital they need and then announces to the arts community that there will be some opportunities they might appreciate.  When a dance company or a community arts center (future gallery?) wants to design the space being offered, they are usually told that the deal has already been made and that the specs are locked in.  When artists ask whether there are low interest loans available to buy what is otherwise being offered only as rental space, they are told that the deal with the city requires that the housing units or the commercial space not be sold (meaning that they want the continued return to capital). In other words, by the time the arts community is notified it is too late to alter the design of the space and no longer possible for the artists involved to become equity (or sweat equity) partners.

Here's an alternative model. It all begins even before the city government promulgates its Request for Proposals (RFPs).  The city invites individual artists, arts organizations and related arts associations (including foundations) to hear about the city's desire to create one or more arts districts (or to emphasize art-related uses in other commercial and residential buildings). It offers to host a series of workshops for artists who want to understand more about the financial, design and other aspects of community development. Then, the city reframes its usual RFPs to indicate that it will only accept proposals in which development teams include artists or arts organizations as equity partners. The artists don't need to contribute cash upfront to be equity partners. They can earn equity shares by operating and maintaining revenue-generating performance spaces, cafes, restaurants, book stores, galleries, rehearsal spaces and teaching programs. Developers often forget that many artists work second jobs and have professional capabilities in other industries. (And, part of being  successful artist is being a creative problem-solver.) If the city proposes a co-equity model, developers and artists would have substantial incentives to seek each other out.  The city could also appoint an appropriately skilled individual or arts organization to serve as an ombudsman to ensure that any and all deals worked out between developers and artists are as fair as possible.  This same Arts Ombudsman would perform an annual "audit" for the city to ensure that all promises are being fulfilled. No one would need to take (or pay for) legal action to make sure promises are met.  Co-equity housing programs, such as those pioneered in California, have demonstrated that the inflation in property values, when split between property owners and renters, create co-equity opportunities. I'm proposing that the same idea should be applied to arts-oriented city development. If an arts organization co-owns (and, thus, operates) performance and rental space inside a mixed-use development, it should be able to count on receiving a portion of the increased value that it helps to create.

There are examples all over the world of arts-oriented development contributing to the revitalization of struggling central cities. To date, though, the success of such efforts have benefitted real estate developers more than artists. Artists have not been invited to be real partners. It wouldn't be hard for cities to turn this around, ensuring a fairer outcome for arts-makers, without in any way inhibiting the prospects for economic success. Moreover, arts organizations and individual artists are likely to be good investments as well as capable partners with a passionate commitment to their city.


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