El Barrio’s Artspace P.S.109New York, NY
Just last week, Artspace was notified by the New York City Department of Housing Preservation and Development that our El Barrio’s Artspace project (commonly known as PS109) has received a tax credit allocation that will generate approximately $24 Million in equity funding to the project. With this essential funding in place, we hope to complete our financial closing by year-end and begin construction this winter. While there will be many tangible benefits to emerge from this project, one of the most immediate will be the creation of nearly 500 jobs during our two-year construction phase. In these hard times, we cannot say enough about what a great partner the City of New York (its departments and individual leaders) has been in moving El Barrio’s Artspace forward.
This moment highlights two essential elements of the Artspace model, as it has been successfully adapted for 30+ projects from coast-to-coast. The first is leverage. The total 10-year project budget for El Barrio’s Artspace (capital + community engagement + capacity building for key partners) is $53 million, an intimidating sum to be sure. Nonetheless, key partners were wiling to step forward early on with seed investments that gave us the credibility necessary to ultimately secure the bulk of the funding through tax credits.
On the private side, these partners included the Warhol Foundation, the Ford Foundation, ArtPlace, Bloomberg Family Philanthropies, JPMorgan Chase and others. On the private side, these partners included Council Member Melissa Mark-Viverito, the Department of Cultural Affairs, U.S. Representative Charles Rangel, Manhattan Borough President Scott Stringer, and others. With large projects, it is always essential that someone – or some network of partners – is willing to take the leap of faith when a project is more vision than reality.
The other element of our model on displace is sustainability. What we’ve learned over 30 years is that the capacity of a project to deliver on its mission over time is directly tied to how that project is originally financed. Our projects need to be affordable to their users and we cannot depend on on-going, annual fundraising to make ends meet. This means that we need to keep mortgages as low as possible and to structure the operating model so that even modest rents/leases can support building upkeep and reinvestment.
In almost every Artspace project, there is pressure to cut the budget and/or to start before it is fully funded – generally with some vague promise that the money will arrive later. While it is always tempting, we’d much rather ensure long-term, multi-decade viability than open 6 – 12 months earlier. We get urgency, but we are in for the long-haul, and there are too many counter examples out there of fabulous projects that have struggled just a few years after opening.
While named above, one last shout out to ArtPlace, which provided the final philanthropic investment before our tax credit application was reviewed. Without ArtPlace’s timely and significant support, our application would almost certainly have been denied. As such, it is also fair to say that ArtPlace’s investment was essential to securing an additional $24 million investment in the arts. Thank you!