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Targeting Investment in the Arts: Part 3

Topic CDFIs

Artists value the process of remaking space and help reveal the potential for recovery inherent in many urban neighborhoods. In both the redevelopment of discrete buildings and incremental renewal of large districts, they provide entrepreneurial energy to the task of preserving something old through the development of something new.

In Baltimore, Reinvestment Fund is developing a strategy to target investment in the arts to low-income communities in Central Baltimore, where it can catalyze and build on other complementary efforts. For one year, our Creative Placemaking Fellow, Rebecca Chan, was charged with the task of developing best practices for financing the arts in distressed neighborhoods in ways that build community among both new and existing residents. Her case study is Baltimore and what follows is the third in a four-part series on her work. This work is supported by The Kresge and Surdna Foundations’ Catalyzing Culture and Community through CDFIs, or C4, a joint initiative intended to help support and expand CDFIs involvement in creative placemaking.

Part 1: Understanding Baltimore’s art scene. Read it here.

Part 2: Developing a strategy around arts and culture investment. Read it here.

Part 3: Shifting Policies and Program to better support the cultural ecosystem

In Parts 1 and 2, we became acquainted with the artists and artist-driven activity that is happening in and around Baltimore, as well as the physical spaces and neighborhoods in which this activity thrives. In Part 3 we will look beyond strategies for individual projects, instead sampling ways in which shifts in policies and programs might help move the needle on arts-based development. Numerous policies and programs affect the arts and cultural communities of Baltimore and cities like it, not all of which are explicitly focused on incentivizing arts and cultural activity. In no particular order, here are five policy and programmatic shifts that could help arts-based community development activity take root.

1) Revisit Arts & Entertainment District tax incentives: The state of Maryland designates Arts & Entertainment (A&E) Districts, three of which are located in Baltimore city. There are an additional 21 A&E Districts scattered throughout the state in rural, suburban and urban areas, all with unique management and stakeholder groups. Designation is based in part on a having an existing concentration of arts and cultural resources, and designated districts are accompanied by three tax incentives targeted towards working artists, businesses, and developers to further incentivize and build on these cultural assets.

The A&E District program is administered by the Maryland State Arts Council, which collects data on the districts on an annual basis and conducts studies on the economic impact of the districts. With the program now in its fourteenth year, it would be useful to harness this data as well as the on-the-ground insight gained from respective district management to refine A&E District policies to encourage the preservation of existing cultural communities, incentivize the stabilization of existing art spaces, and more strategically align the program with other policies and incentives aimed at community revitalization.

Specifically, the existing policies that define the A&E District program could be fine-tuned in two ways: First, expanding the legislative definition of “qualifying artist” and “artistic work” to account for more contemporary artistic practices and emerging disciplines; and second, adjusting the A&E District real estate tax credit to prioritize the preservation of existing art and cultural spaces and/or rehabilitation of existing buildings for arts and cultural use, rather than new construction. By expanding the definition of artist to include the types of practices we saw in the first part in this series, and recognizing that arts and cultural spaces take on various forms as observed in part two, the incentives would be more useful to the targeted populations they are intended to incentivize.

Another strategy to consider would be to better integrate A&E District policy incentives with broader community development and sustainability programs. For example, capitalizing on the need to preserve and reuse historic building stock found in the majority of A&E Districts, and the fact that all the designated A&E Districts also overlap with designated national or local historic districts. With the state of Maryland awarding competitive, points-based historic tax credit aimed at “sustainable communities,” one specific approach to consider would be to award more points to historic tax credit applications slated to occur in an A&E District. This kind of small adjustment to existing incentive programs would better align redevelopment in historic districts and cultural districts, and support broader arts and cultural-based community development efforts.

2) Adopt a citywide cultural plan: A cultural plan identifies a city’s needs around arts and culture, and builds an overall strategy that aligns the cultural community’s goals and priorities with citywide goals and interest areas. To date, many cities have adopted cultural plans or are in the process of creating one, including some of the larger U.S. cities such as Chicago, Seattle, and Boston, as well as smaller cities such as Providence, Rhode Island, and Grand Rapids, Michigan.

A cultural plan can articulate specific goals and protocol for the horizontal integration of arts and culture into the practices of non-arts agencies. As it pertains to arts-based community development, having one part of a cultural plan that addresses needs around physical space for production, presentation and participation in the arts would potentially provide a roadmap for how and where resources are deployed for creative spaces, and benchmarks for implementation. It would also more efficiently connect grassroots, neighborhood-based needs around arts and culture with the action of city government, local philanthropy, and private development.

3) Translate existing real estate, small business, and other technical resources to meet the needs of artists, designers, arts administrators and others working in the creative sector:  Many artists and creative enterprises are viewed as small businesses for tax purposes, yet navigating small business resources and other procedures related to owning, renting, and operating real estate can be a challenge for the uninitiated. Revising materials available at small business resource centers and similar entities related to resources, incentives, and other procedures for small business and real estate development would be helpful in building a better understanding of the menu of existing resources and opportunities available for artists, arts organizations and other creative entrepreneurs, both nonprofit and for profit, outside of traditional grants for arts and culture.

Take, for example, a publically issued request for proposals (RFP) for a city-owned property. An experienced real estate developer understands the process and is most likely accustomed to reading and responding to an RFP for a property, while it is unlikely that an artist or other creative professional has the experience of successfully navigated an RFP for city-owned property. In this case, having a better navigable RFP process might enable more artists and creatives to understand how to go about acquiring a property, and produce more competitive applications in the process.

4) Develop cross-sector arts and culture leaders: Related to the need for literal translation of business and real estate development resources, there is a huge need for project managers and other leadership that can translate the benefits of arts and culture as it relates to community development goals at the local level. These are individuals who are not necessarily trained as artists or cultural producers, but understand the needs of the cultural community and the impact that an arts and culture project can have on a neighborhood. Additionally, these individuals can communicate the nuances of community development, and other procedures and technicalities of development projects to the artists or creative individuals involved.

More broadly, the need for this kind of expertise also speaks of the importance of shifting the culture of developers, financial institutions, funders, and city government, from having a basic appreciation of arts and culture to understanding the benefits that this activity and the individuals driving it, can have on broader community development goals.

Where is this kind of leadership housed? Certainly it is useful to have a person with this skillset on a development team for a discrete real estate project. However for broader impact, having a staff person will this skillset at a local redevelopment agency or community development corporation to guide projects, field questions about specific programs or incentives, and provide general project support would be hugely helpful. In Baltimore, such a position would be analogous to the Baltimore Development Corporation’s (the nonprofit corporation contracted with the City of Baltimore to provide economic development services) dedicated Main Street programs or food systems coordinators.

5) Be aware of policies and procedures that do not explicitly target arts and culture, but still have an impact on the cultural life of a city: At the local level, changes in seemingly innocuous policies and procedures around special event permitting or use and occupancy permits can have huge impacts on the cultural community’s ability to host festivals, temporarily occupy a vacant storefront, or convert an underutilized building into a studio space. These barriers are magnified when it comes to issues of housing policy or transportation. Similar to the aforementioned need for arts and culture coordinators housed in RDAs or CDCs, having city councilmen and other local advocates that can guide policy and understand its effects on a city’s cultural ecosystem is a tremendous resource to the arts and cultural community.

All these policy and programmatic recommendations will require savvy advocates, strong cross sector partnerships, and years of hard work to put into place. In the next and final post, we will shift from big picture policy change and drill into more immediate strategies to invest in arts and culture-based community development.


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