Artspace Feasibility Report 2009 1

Saint Anthony Park is notably the geographic center of the Twin Cities -- a historic mixture of industry, educational institutions and quaint residential neighborhoods. "Natives" all know this neighborhood as being rooted in the arts as well. However, this may be a well-kept secret to many outside the neighborhood. It has spawned several notable nonprofit arts organizations such as the Textile Center and the Northern Clay Center, now both in Minneapolis and been a home to other small and midsize arts organizations, most recently the Gremlin Theatre at 2400 W. University Avenue.

The Central Corridor light rail line, scheduled to begin operation in 2014, will cross the southern part of Saint Anthony Park on University Avenue and is already beginning to have an impact on the neighborhood. Although the current economic climate has subdued speculative development, future development is around the corner and will soon change the face of the neighborhood. Primarily for this reason, the Saint Anthony Park Community Council invited Artspace to help assess the current arts environment and make recommendations for ways to preserve sustainable, affordable space for individual artists and arts-related organizations and businesses.

With financial assistance from a CURA Neighborhood Partnership Initiative grant, the artists/creative businesses in the neighborhood,  and Councilmember Russ Stark, the Saint Anthony Park Community Council invited Artspace to conduct a Prefeasibility Site Visit to begin the process of evaluating and making recommendations to secure space for the arts in the neighborhood. The visit took place January 26-27, 2009; Artspace was represented by Wendy Holmes, Vice President for Consulting and Resource Development, and Stacey Mickelson, Director of Government Relations. A follow-up driving tour of the neighborhood occurred on February 12, 2009, with Amy Sparks, Executive Director of the St. Anthony Park Community Council and artist and community member Catherine Reid Day.

Buildings

Chittenden-Eastman Company (C & E Building) 2402 W. University Avenue

The wood frame C & E Building was built in 1917 and rises seven stories on about three-quarters of an acre. It originally housed the M. Burg and Sons Furniture Company, then the Hill Furniture Company, then Burlington, Iowa-based Chittenden and Eastman mattress company, which left its name carved in stone across the entrance.

The C & E Building is 142,000 square feet with half of the space leased, predominantly to working artists for studio space and for nonprofit and arts-related businesses such as Graywolf Press. The artists who have their studios in the building also recently formed a co-op gallery on the ground floor, where commercial spaces have been difficult to lease. There are 30 to 32 artists with studios in the building, some of whom have been there as long as 20 years. Rent is below market - we were given a figure of $6 to $12 a square foot net - and includes heat and lights. Several of the tenants are full-time working artists with esteemed careers. Many have bonded as a group and are interested in staying together. Many have "grown up" in the building and feel a particular bond to the facility itself as well as to the neighborhood. Part of the Community Council's objective is to find alternative studio space should the building be sold.

The character of the building lends itself well to office, studio and commercial uses.  Housing is more of an issue given the lack of windows on the sides of the buildings combined with the restrictions that historic designation imposes. However, the current configuration of studio spaces is not optimal and access to light is poor in many cases. Some of the spaces are crammed into windowless corners. The building is a good candidate for redevelopment though a retrofit to accommodate life-safety and code issues will be expensive.

The Triangle Building, 2500 W. University Avenue

The Triangle Building, on University Avenue near the intersection of Highway 280, is a 76,000-square-foot structure. As at the C & E Building, rents range from $6-12/square foot. Although we did not go into any of the interior studios or creative business spaces, we did visit one office space and were told that 80% of the building has artists or arts-related tenants. Artistic activity in this building is flying under the radar.

Mattress Building, 550 and 558 Vandalia Street

This 250,000-square-foot building is near the intersection of University Avenue and Vandalia, a few blocks east of Raymond. As its name implies, its original use was that of a mattress company. The first floor of this vast building is currently being used for storage but is underutilized. The second and third floors have been converted into 1,000-square-foot studios; there are 10 studios on the second floor, 18 on the third. There are common area slop sinks and restrooms. Creative business and artist tenants include the Center for Mind-Body Oneness and a woodworkers’ guild. A storage space on the second floor could be ideal for a small theater space. The owner, Alan Peterson, is also the fairly recent owner of the C & E Building. Since the studio spaces are newly built-out in this building, plans for other kinds of use do not seem apparent though the ground floor and the potential theater space seem like ready-made opportunities to continue the artist/creative business build-out.

Neighborhood Driving Tour: South Saint Anthony Park

Amy Sparks and artist/consultant Catherine Reid Day hosted a tour of potential redevelopment sites in the neighborhood on February 12. Although we do not have in-depth knowledge of the circumstances of each property, there appear to be several opportunities for development in the industrial section of the neighborhood between University Avenue and Energy Park Drive.

Financial Leadership and Local Analysis

Financial Analysis

One of our key meetings was with a group that represented community and financing resources from across sectors. Rick Beeson, President of Park Midway Bank, hosted the meeting at his office. Attendees included representation from the Local Initiatives Support Corporation (LISC), the University of Minnesota, the City of Saint Paul, Council member Russ Stark representing the City's 4th Ward, the Central Corridor Funders' Collaborative, the Minnesota Citizens for the Arts.

Many of the group participants spoke of the near-term opportunities in the Saint Anthony Park neighborhood created primarily by the Central Corridor light rail line. The line will run through the neighborhood along University Avenue. There was a lot of interest in preserving artists' space as well as a recognition that this "arts-friendly" atmosphere has created a positive "brand" for Saint Anthony Park. LISC mentioned the potential of seeking planning dollars to take next steps in identifying a specific project that focuses on the artist population and is mixed use in nature.

Since the community meetings and tours, Artspace has followed up with LISC and the Central Corridor Funder's Collaborative to identify resources that could be available for feasibility and site identification/due diligence work. In addition, we have had fruitful conversations with DFL Legislator Alice Hausman, Chair of the Capital Investment Committee (bonding), who is sponsoring a $250,000 bill for planning and predevelopment of a community arts center. While the neighborhood will ultimately be in charge, Artspace is advancing conversations to see if there are specific resources that could be allocated for any kind of arts development in St. Anthony Park.  While there is no one path to take, the creation of a community task force to focus on the development and preservation of sustainable, affordable space for artists should be formed.

Membership should include artist leaders, the Community Council, at least one elected official and/or their staff, a member of the financial community, etc.

Local Leadership

The participation of City Councilmember Russ Stark at the finance meeting and the presence at every meeting of Joe Spencer, Director of Arts and Culture for the City of Saint Paul, were positive indicators of potential City endorsement of a project for artists. If Artspace is to pursue a project in this neighborhood, support from the City of Saint Paul will be critical in our success. That support can come in a variety of forms, including but not limited to site acquisition, CDBG funding, HOME funds, Low Income Housing Tax Credits (LIHTC) funds, and a Federal Home Loan Bank deferred loan.

Findings

During a Preliminary Feasibility Visit, Artspace gathers information in five main areas: project concept, artist market, site feasibility, financial feasibility, and local leadership. While these are not the only factors we consider in making our recommendations, they help us frame the discussion.

If the community is clear about what it wants – that is, if the project concept has been determined – we evaluate that concept in the context of the other factors. For example, if the concept involves adapting a particular historic building for use as an artist live/work project, we consider whether the building in question is structurally sound, suitable for the intended use, available at a price we can afford, and so on. If the project concept hasn’t been determined, we weigh the variables and offer recommendations to help the community decide how to proceed.

PROJECT CONCEPT and CURRENT SITUATION

Many communities have a clear project concept in mind before they contact Artspace. Buffalo, New York, for example, was interested in a live/work project to catalyze development in an economically challenged neighborhood. Fergus Falls, Minnesota, wanted to find a use for a long-vacant historic hotel on the city’s main street. For Santa Cruz, California, where real estate values are among the highest in the country, the goal was to keep artists from being priced out of the community.

Although real estate prices are not exorbitant in Saint Paul, they will become increasingly out of reach along University Avenue where much of the arts activity is happening. While owners may not be able to “flip” their properties in this economy, higher end commercial, retail, and residential developments will be possible once the Central Corridor line goes into operation.

One concept is to secure stable, affordable space for artists in this neighborhood to build on and preserve the growing artist population – especially the studio space—located in the C & E Building, the Triangle Building, the old Mattress Factory Building at 550 and 558 Vandalia as well as the large Carleton Artist Lofts and the Dow Building. Artspace toured all of these buildings to get a sense of the arts activity in the neighborhood. Informally, we counted more than 100 studio spaces in three buildings and know of other buildings with studios as well. The Carleton Lofts adds another 200-plus residential units for artists only in three historic, recently renovated buildings with shared working studio spaces. The size of the artist population in this neighborhood could be significantly larger than at first glance. We were told of many more spaces for artists and creative businesses throughout the neighborhood. Saint Anthony Park reminded us of what is now the Warehouse District of Minneapolis, where hundreds of artists lived and worked until the mid-1980s, when most were displaced by increased property values. Therein lays both the opportunity and the challenge for Saint Anthony Park. The community has hummed along without much ado until recent development opportunities began to increase the neighborhood’s visibility and perceived value with the coming of light rail.

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Findings Page 2

What happened in the Minneapolis Warehouse District, and what could happen in Saint Anthony Park, is widely known as the "Soho Effect" after the New York neighborhood that became an arts district in the 1970s only to lose most of its artists as rents shot up in the 1980s. As the artists move in, the property values often rise, creating an inverse relationship between the number of artists in an area and an area's affordability.

A recent study by economist Ann Markusen of the Humphrey Institute also reveals a slight increase in the out-migration of artists in the Minneapolis/ Saint Paul area. This could be due to a combination of factors, including the availability of affordable space and length of time an artist stays in the area.

General Thoughts on Cultural Development

For the past 20-plus years, Artspace has been at the forefront of the creation of long-term, affordable space for individual artists, their families, arts organizations, and creative businesses. As such, we think it's important to note the following:

1. Multi-tenant, multi-use creative spaces generate positive economic revitalization and development. Each project provides job opportunities both before and after construction. Each artist is, in effect, his/her own cottage industry, an entrepreneur contributing to the job market and helping to employ others along the way.

2. Artspace's projects create permanent, community arts space that provides resident artists with opportunities to interact with the public and creates opportunities for the larger arts community to showcase members' work.

3. Creating permanently affordable live/work space helps to build an authentic community of local artists who collaborate with each other as well as with other local, national, and international artists.

4. Artspace's projects are catalysts for streetscape improvements and general beautification around our buildings.

5. Artists are known to be pioneers and as such are willing to move into older industrial areas of a city, creating "buffer zones" between these areas and the residential areas nearby.

6. Creating live/work space also helps to preserve cultural and historic heritage, a key component of any potential St. Anthony Park project.

7. Artspace artists are known for collaborating with the larger educational and cultural/business communities, often as teachers, adjunct professors. and/or volunteers for youth and cultural organizations.

8. Artspace sometimes partners with for-profit developers that may have incentives or quotas to meet in the affordable housing realm. Affordable housing for artists can be seen as an amenity to those doing market-rate housing and other developments.

Market and Analysis

ARTIST MARKET

Approximately 40 artists attended one or both of two sessions we held to learn more about individual artists’ perception of space needs and to understand more about the depth of the artist market in Saint Anthony Park. We were overwhelmed with the number of studio/work spaces that are sprinkled throughout Highway 280/University Avenue side of the neighborhood. Informally, we know of at least 100 studio/work spaces for artists, some of which are shared by multiple artists. We believe a more formal count of these spaces should occur to help give the community more political power and influence as well as to better understand the need.

SITE ANALYSIS

During a preliminary feasibility visit, Artspace’s primary goal is not to select a site but to understand the types of buildings being used for the arts and to more fully understand the ownership dynamic. In this case, we also wanted to learn more about potential developable properties, whether underutilized buildings or land. Accordingly, we toured several buildings and conducted “drive-by” inspections of several others. Here is a summary of our thinking about the buildings we toured.

Next Steps

Saint Anthony Park impresses us as a prime candidate for an artist-focused project. The driving force behind a project for artists in the neighborhood is to find stable, affordable working space for individual artists. A project that only has working studio space will require many more private resources and often can be difficult to fund. We find a combination of residential (live/work) space in conjunction with working studio space is highly complementary and helps to achieve multiple community goals and provides access to a variety of funding tools. We know from our waiting lists for live/work spaces in Lowertown that the demand is high for residential space for artists. Hence, marrying the two concepts seems most prudent to leverage the most resources. There is a concern, especially among the C & E artists, that using housing to get studios is very limiting. Also, live/work space is not feasible for older, more established artists who already own their own homes (many in the neighborhood) and have chosen not to do art in their homes for a variety of reasons. Studio-only space is working in other parts of the Twin Cities and many artists in the neighborhood would like to strive for that here.  Although the creation of artist working space is laudable and certainly needed, it may not be realistic in this economy to focus on studio-only space, exclusive of other kinds of space that also serve creative people and leverages public support.  We would hope for the neighborhood and city that all kinds of space for the creative economy can be either retained or created in St. Anthony Park.

We are confident that there is a market for a minimum of 50 units of live/work housing as well as 20-plus working studios. While we do not have an in-depth knowledge of the real estate opportunities in this community, we drove through the neighborhood with Amy Sparks and Catherine Reid Day to look at potential sites. There appear to be several potential candidates for a project involving adaptive reuse of an historic building plus new construction. We would like to have a better indication of support from the local cultural leaders, from the City Council and Mayor's office, from the philanthropic community and from state and federally elected officials.  The more layers of elected official support, the better.  Since our meetings, Stacey has met with Alice Hausman who had specific suggestions about how to leverage state funds for the arts in St. Anthony Park.  All this to say, the support that has already been rallied needs to continue and spread to other potential stakeholders.  We all need to understand where the potential resources are for a development of this kind.  Part of our continued follow up has been to uncover those sources.  Specific recommendations include:

1. Quantify the number of artists living and working in the area. Perhaps an intern could work for the Council to count the number of spaces and buildings. We understand that there are more spaces in buildings that we did not see. The reason this information is important is that it will help the neighborhood create economic impact statements about arts activity and employment.

2. Continue identifying opportunities for creative sustainable affordable space - available properties, buildings as well as vacant or underutilized land. Think broadly and don't let environmental issues get in the way. Many such issues can be overcome with the right funding tools. Examples of good building sites are vacant or underutilized parcels, buildings with 45,000 square feet or more with large windows, 11 foot + ceiling height and freight elevators.  Many times artist space is created in an opportunistic way.  Are there areas, blocks slated for redevelopment, properties that have been difficult to develop, city-owned parcels that through redevelopment could solve a municipal issue and catalyze a development renaissance.

3. Build case for support. Use this report to present information showing what sustainable, affordable facilities for artists do for the neighborhood and the larger community?  What will happen if nothing is done? Demonstrate to the City that converting industrially zoned land into "Traditional Neighborhood" zoned land would be beneficial.

4. The Saint Anthony Park Community Council should have a section of its website that is arts-focused and perhaps connects to the websites of artists who are in the neighborhood.  Consider a resource for artists looking for space in the neighborhood?

5. Discuss the proposed plan with potential and current partners including the Mayor's staff.  Talk about the impact on the neighborhood, the numbers of people served, increased tax base if underutilized properties or buildings are redeveloped as part of the plan.  Come to the elected officials and staff with specific information and talk about solutions to keeping and creating artist space.  Build a case for why they should care.

6. Continue to follow up with LISC and the Central Corridor Funder's Collaborative to identify resources that could be available for feasibility and site identification/due diligence work.

7. Consider creating an Arts District, a formally designated area that is properly zoned to compliment artist uses and may include other incentives.  It is important to recognize, however, that cultural districting might have unintended consequences of driving up real estate prices/rents and forcing artists out of an area.

Community leadership is the number one determinant of a successful project. In our experience, there are usually 4-5 "leaders" who move projects forward. Those leaders typically come out of a combination of the neighborhood, the city, the arts community, planning department, and the list goes on.  Many times the initial "idea" of creating sustainable space comes out of the arts community but the push to make it happen comes equally from other parts of community.  There is no one way that works but generally speaking, the project needs to become the passion of a few key individuals who have a vision and determination for moving the concept into reality.