arts Blog

Innovative Strategy Goes Online to Counter Nonprofit Displacement Threats

Top photo: Jen Lewin Studio’s “The Pool” at Lafayette Square, New Orleans. Photo credit: Marcus Alfred.

Oakland, Calif. – There’s an innovative solution for arts and cultural nonprofits facing displacement in cities and communities across the country. A new online resource that shows how it works.

Today, the Kenneth Rainin Foundation launched the Rainin Arts Real Estate Strategy website to provide an accessible tool for exploring this cutting-edge approach to address the increasingly urgent problem of nonprofit displacement. The collaborative strategy connects resources in the community to the real estate needs of arts and cultural nonprofits.

“This model is a game changer for protecting our most valued arts and cultural assets.”– Shelley Trott, Kenneth Rainin Foundation Director of Arts Strategy and Ventures
Shelley Trott, Rainin Foundation Director of Arts Strategy and Ventures, said “This model is a game changer for protecting our most valued arts and cultural assets.  We’re eager to share it with other communities.”

Artists and cultural nonprofits are facing displacement at an alarming rate due to rising real estate values in many urban centers, along with city planning challenges and other pressures. Rents in the three US cities with the largest number of artists per capita—San Francisco, Los Angeles, and New York City—are skyrocketing.

A Proven, Replicable Solution to Address Nonprofit Displacement

The Rainin Arts Real Estate Strategy mobilizes a coalition of public and private partners, who team up to support long-term, sustainable solutions and create affordable, safe spaces for arts organizations. The new website offers a clear window into how the model works, and how it can benefit these nonprofits and the communities they serve. Now gaining momentum in the Bay Area, it makes creative use of existing financial tools to leverage public and private resources as a means to revitalize and sustain the cultural vitality of local communities.

Citing the success of two projects in San Francisco and a more recent initiative in Oakland, Trott is enthusiastic about the potential for this collaborative approach to find similar success elsewhere. “We’re discovering what works,” Trott says, “and a proven, replicable model like this couldn’t be more timely.”

“A proven, replicable model like this couldn’t be more timely.”– Shelley Trott, Kenneth Rainin Foundation Director of Arts Strategy and Ventures

How the Model Stabilizes Nonprofits

At the center of the model is a real estate holding company like the San Francisco-based Community Arts Stabilization Trust (CAST). The first of its kind to serve the cultural sector, CAST is a nonprofit, stand-alone entity that works with multiple partners to purchase real estate on behalf of arts organizations. CAST also helps to strengthen their capacity to purchase and manage a facility of their own. Other key partners include a community development financial institution (CDFI), foundations and other donors, banks and other businesses, and local government agencies.

In 2013, a $5 million grant from the Rainin Foundation provided seed funding to create CAST in partnership the Northern California Community Loan Fund—a CDFI with a long history in community development projects.

The Rainin Arts Real Estate Strategy recognizes that the arts drive vibrant and diverse communities and are critical to neighborhood health and well-being. But cultural organizations’ current business models do not provide the capitalization, flexibility, and organizational capacity needed to survive and sustain themselves in a rapidly changing real estate marketplace.

Trott described CAST’s role this way, saying “CAST freezes the cost of real estate when it purchases property, carving out an alternative market for nonprofit arts and culture organizations. When a cultural organization buys a property seven to ten years after it’s purchased by CAST, it pays the original purchase price.”

Addressing Nonprofit Displacement in San Francisco

CounterPulse’s building at 80 Turk Street in San Francisco. Photo credit: Kegan Marling

CounterPulse was among the first pilot projects to secure a lease with an option-to-buy agreement from CAST for their new home in San Francisco’s Tenderloin District. CounterPulse, which opened to the public in 2016, has raised more than half of the $6 million capital campaign to purchase their home. Once they complete their loan payments and own the property outright, CAST will redistribute the money to another art nonprofit in need of help finding a home.

“…we are truly elated to have a permanent home to create art with and for our community.”– Julie Phelps, CounterPulse Artistic Director

CounterPulse Artistic Director Julie Phelps said, “Our partnership with CAST has enabled our organization to build capacity and contribute to the neighborhood’s vibrancy without the threat of displacement. With an additional outpouring of generosity from people and businesses in San Francisco that recognize the value of the arts, we are truly elated to have a permanent home to create art with and for our community.”

Shelley Trott agrees, “When we cement the valuable presence of artists and cultural spaces, the entire city benefits. We hope fellow funders, city governments, and arts organizations are inspired by our success and explore our website to learn how their communities can leverage this strategy.”

Visit the website and download the whitepaper report at krfoundation.org/artsrealestate


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