TIP Strategies is a privately held Austin-based economic development consulting firm committed to providing quality solutions for public and private‑sector clients.
This blog is dedicated to exploring new data and trends in economic development.
By: Emily Badger
Via: Fast Company
It worked for St. Paul, Minnesota, where artists revived an old warehouse district–and got to stick around to reap the benefits of what they helped create.
The process whereby artists cycle through the rundown neighborhoods of American cities has become so entrenched it even has a dirty name: the SoHo effect. Artists venture into an area where no else will. They help make it desirable, chic even. Then, as rents go up, they’re forced to move out. Neighborhoods appreciate over time. But artist income seldom does.
“I remember that very deeply in my soul back in 1986, we felt that was unfair,” says Kelley Lindquist, who became the president of a nonprofit called Artspace in 1987. “It was insulting for people to sometimes say, ‘Oh, artists like to move, they’re bohemians!’ Who likes to be on the street and renegotiate a lease and carry all their equipment and try to create a new community and basically start all over?”
This is the lopsided social contract cities often have with artists: We count on them remake abandoned neighborhoods, but we offer no provisions for them to remain a part of what they helped create. Enter Artspace. The Twin Cities-based organization has pioneered what sounds like the ultimate niche idea: It’s a nonprofit real estate developer for artists. Its flagship project, the Northern Warehouse in the Lowertown district of St. Paul, Minnesota, has been housing artists for more than 20 years in the heart of a neighborhood that’s undergone vast transformation. Today, as widespread civic enthusiasm for “creative” projects has begun to spawn skepticism, the Northern Warehouse may be one of the clearest case studies of the role of artists in rejuvenating decayed neighborhoods—and sticking around afterward.
The city of Minneapolis’ arts commission founded Artspace in 1979 to help connect local artists to affordable space in the city’s warehouse district. But the same artists kept coming back, priced out of their homes and studios, in need of yet another space. When Lindquist took over a decade later, the local arts community began to focus instead on the only permanent solution: They needed to control the buildings. Since then, Artspace has completed 30 live/work developments in 21 U.S. cities, with two more opening this fall, two more under construction, and another dozen in the pipeline.
Lindquist recalls that in the ‘80s, four other organizations–in Seattle, San Francisco, Washington and New York–were toying with a concept similar to Artspace’s (at the time, the five had been given a grant by the Apple Foundation to network with each other). Artspace is the only one of those original five that has survived to this day.
“I do honestly think that there is a prairie spirit here,” Lindquist says, laughing. He sometimes thinks about why this idea got off the ground in Minnesota when it didn’t elsewhere. “Living in Minnesota is pretty rough,” he says. “There can be easily six months of the year that would seem pretty hard to live in and intolerable to a lot of people. But I think it forced those of us here to try harder, and to be a little more experimental, a little more risk-taking on how do we keep our culture vibrant?”
Artspace has intertwined missions serving artists and small arts organizations and leveraging the properties that house them for “creative placemaking.” In its most literal sense, the term refers to building communities around arts and cultural activities. But “creative placemaking” has also become shorthand for the more ambitious–and harder to measure–idea that the arts can also lead to economic development. Over the last decade, many cities have fallen in love with the idea that if they can just lure artists and other creative types, economic vitality will follow. The tricky part is proving that an influx of artists actually causes everything that comes afterward: the higher property values, the new restaurants, the middle-class families.
“In a lot of ways, I think Lowertown is perhaps the most cut-and-dried example you’ll ever get of artists who really created a tipping point,” says Laura Zabel, the executive director of Springboard for the Arts, a long-running tenant of the Northern Warehouse. “Because there was such a vacuum here before.”
On the edge of downtown St. Paul, Lowertown was long a hub for railroad warehouses. If you wandered into the area 20 years ago, Zabel says, “there was sort of a feeling that you fell off a cliff.” Few people lived there and most of the buildings were empty. The Northern Warehouse had been built for the Northern Pacific Railroad. In the ‘80s, the bottom two floors were still occasionally used by arts organizations. But the top four floors were uninhabitable after the roof caved in. When Artspace eyed the property in the late ‘80s, those top floors had been vacant for 20 years.
Artspace converted the building into 52 live/work loft spaces for artists, with complimentary commercial space on the first two floors. The project was financed with a mix of historic and low-income housing credits, private investment and philanthropy grants. As a result, the building’s mortgage is so low that Artspace can charge tenants well below market rate. To qualify to live and work here, artists must make less than 60% of the area median income. Rents range from about $500 to $1,000, depending on income, for spaces as large as 1,600 square feet. When Artspace recently commissioned a study of the area, market rate for a two-bedroom in now-booming Lowertown was $1,300 a month.
“I’m not sure [Springboard] would still be around if we didn’t have this space,” Zabel says. Her organization, which is about to expand, pays $1,100 a month for 2,200 square feet. This is a common refrain throughout the building. “I’d probably be nowhere,” says painter Matthew Rucker, who estimates that he makes 90% of his annual income during the two weekends a year when the Northern Warehouse hosts an art crawl. “I can honestly say that I owe almost all of my current success to living in this building.”
The Northern Warehouse has also created for its tenants something like the creative cacophony of a coffee shop on a much larger scale. The people who live and work here are sculptors, singers, graphic designers, composers, writers, painters, even magicians. And they constantly interact through the building’s co-op, at art crawl events, in Springboard’s artist resource center. Justin E.A. Busch, a writer and composer, says his six years in the Northern Warehouse have been the most productive of his life because of both the private working space he has here and the people who share the building with him. He produced one CD, for example, with a neighbor who’s a singer.
In a traditional apartment, that might never happen. “Even if your next-door neighbor in an apartment building is a singer,” he says, “it’s a different atmosphere knocking on a stranger’s door and saying ‘I can’t help notice you’re a singer!’ Here, you know everybody is an artist.”
Outside the Northern Warehouse, galleries and restaurants have sprung up throughout the neighborhood. The best farmer’s market in the city now runs year-round across the street. Artspace has developed a second, 66-unit property next door, the Tilsner. Today Lowertown is one of the fastest growing neighborhoods in the city, and there is even talk of a new minor-league baseball stadium there.
This, of course, has the artists on edge, being attuned as they are to the fear that artists will always fall victim to their own success in a redeveloping neighborhood. The artists who live in Artspace’s properties will at least be safe in perpetuity. Artspace recently refinanced the Northern Warehouse, and it remains on stable financial footing as a permanent space for artists for decades to come. One might hope that its permanent presence might keep some of the neighborhood’s character intact, regardless of whatever else happens.
If that’s the case, the Northern Warehouse model suggests that it’s possible to break the SoHo effect but still leverage the urban pioneering instinct of artists. Artspace doesn’t prove that artists can power the economy of whole cities. Its success–born out of an intricate model that emphasizes the long-term stability of an arts community–hardly translates to a blanket endorsement of the equation that artists = urban prosperity. But it seems to be doing something pretty effective in the Twin Cities.