Real estate company

City launches real estate company to save and create art spaces in Seattle

Now, in an effort to combat cultural displacement and gentrification, the city is taking the rare step of creating a “mission-driven” real estate development corporation so it can create, buy, manage and lease property for arts and cultural spaces – which could include a wide range of venues and organizations, including galleries, bookstores, non-profit dance companies, and cultural community centers. The new entity would also likely develop and run a new “Creative Economy Centre” on the second floor of city-owned King Street Station.

In preparation for years, the new organization, dubbed “L’Agence de l’Espace Culturel”, aims to be the missing link between the city’s cultural sector, the world of commercial real estate, local government and wealthy benefactors. , and will focus on the preservation and development of spaces for communities. of color.

“There are a lot of people who want to make investments in affordability and stabilization of cultural space,” says Matthew Richter, cultural space liaison for the city’s Office of Arts and Culture. “Right now their only option is kind of one-by-one, go help someone buy a building or fund someone’s occupancy costs or give a grant. There is no organized and cohesive mechanism to influence sector-wide issues. That’s what we hope to bring to the table.

The Cultural Space Agency will be a type of intermediary organization called a public development authority, or PDA, a hybrid between a private company and a government organization, also called a “public company”. The independent legal entity will be governed by a community board approved by the mayor and city council, will be accountable to the public through open meetings and open records laws, and may receive public funds and property owned by the city. At the same time, it will also be able to receive tax-deductible donations and generate income (by renting out property, for example), although it will not engage in for-profit business activities.

An intermediate council submitted the documents needed to establish the PDA to the mayor last week. If the mayor approves, after a 30-day public comment window, the PDA will be created. The Office of Arts and Culture is committing $1 million to fund start-up costs for the next two years, $500,000 of which is reserved in the 2021 budget currently under deliberation, and will add money to this pot through the through fundraising and philanthropy.

The city has already started conversations with investors and philanthropists. If all goes well, the organization could hire its first position, an executive director, in the first quarter of 2021.

Creating a PDA is an unusual move. Although Washington State has established PDAs to preserve and restore the history and culture of Seattle’s Central District, Pioneer Square, and Chinatown-International in recent years, the last time the city established its own PDA was in 1985, to develop the downtown Seattle Art Museum.

“The public development authority brings the power of government, the agility of the independent sector and the partnership opportunities of social impact investing to tackle the same problem,” says Richter.

With the move, the city is following in the footsteps of King County, which established the 4Culture agency in late 2002 in response to the post-9/11 economic recession and budget cuts to King County arts offices. Other local PDAs manage the real estate in tandem with a sibling nonprofit, including Historic Seattle, the Pike Place Market Preservation and Development Authority (which owns and operates the market), and Community Roots Housing, which also oversees the space 12th Avenue Arts at Capitol Hill.

The Cultural Space Agency could work similarly by developing and owning mixed-use buildings and renting ground floor space to cultural organizations at reduced rates.

But he can do much more. It could buy the ground floors of large apartment complexes for rent from organizations, such as the Hugo House literary center arrangement on Capitol Hill modeled. Or it could acquire and redevelop existing cultural spaces for or with cultural partners, and act as a sort of property manager.

The upside: As a middleman, the Cultural Space Agency could negotiate lower rental rates, secure leases where smaller organizations might not have the assets or credit, and act as a buffer to make cultural organizations less vulnerable to rent increases or evictions.

“The affordability crisis in this city is one we all feel,” says Tim Lennon, executive director of the LANGSTON Central District nonprofit arts association. “As we approach the next boom – whenever that happens – we’re just going to be more and more expensive. This Cultural Space Agency is a tool that we can use to really make sure that the heart of this city can physically remain in this city.

A major project right off the bat would likely involve the second floor of King Street Station, which faces Jackson Street, which is currently vacant and controlled by the city’s Department of Transportation. The city’s arts and economic development departments have developed a proposal to solicit $2 million from philanthropic and private sector funders to create a creative economy hub, arts and career development center.

If the Cultural Space Agency finds the funds, it could redevelop the King Street space into a youth-focused arts venue that would include space for the non-profit Indigenous theater company Red Eagle Soaring, a skills center Seattle Public Schools, the Totem Star music mentorship program, a public gathering area and gallery and gift shop showcasing local makers, and more.

Other buildings and venues that could fall under the Cultural Space Agency have not been named, although a report commissioned by the city in 2019 notes that the city has a number of cultural facilities that could best handled by a PDA, such as the Spectrum Dance Theatre. building in Madrona, Bathhouse Theater in Green Lake, the Langston Hughes Center in the Central District, the Pratt Fine Arts Center and the Seward Park Clay Studio.

While this arrangement may be beneficial, the end goal is to ensure that cultural organizations can actually own the buildings and spaces they occupy as the ultimate protection against displacement.

The city recently confirmed the transfer of three properties in the Central District – a former fire station on 18th Avenue, Fire Station 6 and the Central Area Senior Center – to community groups after years of promises.

Thanks to the new agency, a similar process “could be done much more efficiently, much faster,” says LANGSTON’s Lennon, who has been working to create the PDA for years.

The PDA could receive city-owned property without financial compensation and either redevelop it, co-own it with another organization through a limited liability subsidiary, donate or sell it to a community partner, or sell it for the market and use the proceeds to buy more space for local organizations. (A 2019 city report on the feasibility of a PDA notes that the city has nearly 100 properties considered “surplus.”)

The traditional measure of a PDA’s success might be how much it grows its balance sheet, Richter notes, but with the Cultural Space Agency, “the measure is going to be the degree to which it shrinks its balance sheet,” he says. “Can we own less and less every year?

These decisions will be made by a PDA management board, made up of community partners. Currently, the agency is led by an interim board consisting of Cassie Chin of the Wing Luke Museum, Sarah Wilke of the Meany Center for the Performing Arts at the University of Washington, Vivian Phillips, arts consultant, Coté Soerens of Resistencia Coffee and Lennon from LANGSTON. . The group plans to launch the search for an executive director (and decide on his remuneration) early next year and hand over the baton to a new board.

The city’s $1 million arts and culture fund only covers start-up costs, so various fundraising campaigns will begin next year. Other future revenue streams could include local philanthropy. As a PDA, the Cultural Space Agency can also receive larger funding that smaller local organizations might not have access to, such as federal dollars and grants from major players like the Kresge Foundation and Mellon Foundation, and redistribute money to local partners.

The city will hear public feedback on the proposal throughout the month and says it hopes to hear from people about which spaces they would like to see funded.

The proposal, submitted to the mayor’s office last week, spans a five-year process. But with venues closed and shows canceled, the sector is having some of its toughest times. The PDA could help the cultural sector — especially historically underfunded communities of color hard hit by the COVID crisis — emerge from the crisis in a new way, Lennon says.

“If we look at the post-COVID world, there will be a lot of empty buildings in town,” he says. “We cannot survive as a sector if [these] are simply subject to market forces. Lennon thinks the Cultural Space Agency will be able to ensure that cultural organizations will stay (and grow) once the city regains its power as the pandemic recedes.

“Even in this kind of interim period,” he adds, “there will be an organization entirely focused on ensuring that when we come out of this, people who were already kicked out of town will have someone else. who will fight for them.”

This article has been updated to indicate that the city council will not vote on the creation of the PDA. It only requires the approval of the mayor.

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