Preliminary Feasibility ReportSarasota, Florida

Prepared for

with funding support from

The City of SarasotaThe Sarasota Alliance for Historic Preservation

The Nancy Schneider Treib Memorial Fundof the Community Foundation of Sarasota County

National Endowment for the Arts

May 2014

ARTSPACE PROJECTS, INC.250 Third Avenue N., Suite 400

Minneapolis, MN 55401612.333.9012

www.artspace.org

Introduction

arasota is located on the Gulf Coast of Florida, an hour’s drive south of the Tampa-St. Petersburg metropolitan area. A quick glance at Sarasota’s “wiki” page tells you what you need to

know about how the community brands itself: “The area is renowned for its cultural and environmental amenities, beaches, resorts, connections to the Ringling family, and its school of architecture.” Indeed, Sarasota is teeming with cultural amenities rare in a community of 55,000 (though the North Port–Sarasota–Bradenton Metropolitan Statistical Area population is more than 720,000). These include an orchestra, opera, several theaters, a performing arts center, a new contemporary art museum (SMOA), the Ringling College of Art & Design, several art centers (one owned by the City), the Marietta Museum of Art & Whimsy, the Ringling Museum campus, and three other colleges and universities with art programs (University of South Florida, The Florida State University/Asolo Conservatory for Actor Training or FSU/Asolo Conservatory, and New College of Florida).

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These institutions are one reason why Sarasota’s population is younger than those of its nearby urban peers. Indeed, only 33% of its population is over the age of 65. In nearby Naples, by contrast, 50% of the residents are over 65. With thousands of students graduating with degrees in the creative realm, it is no wonder that Sarasota wants and needs to find ways to retain its young adults as well as to continue strengthening its focus on arts and culture for people of all ages. Nevertheless, the median age in the Sarasota metropolitan area is the

Sarasota’s City Hall, designed by Jack West in 1966, is a series of interconnected rectangular shapes. It is considered a prime example of the Sarasota School of Architecture.

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oldest of any mid- to large-size region in America, which supports the argument that non-residential studio space is a significant need.

More than 5,000 nonprofit organizations, 1,500 of which are focused on the arts, are based in the Sarasota area. The idyllic climate and the significant influence of the Ringling Brothers have fostered a supportive environment for artists and arts organizations. Sarasota has also built a deep philanthropic community.

Sarasota’s largest employer is the municipal and county government sector, followed by the school district, Boar’s Head meats, and the nonprofit sector. It was clear during our visit that entrepreneurs dominate the landscape, so that rather than having Fortune 500 companies, Sarasota is peppered with creative/entrepreneurial individuals who are self-employed or operate small businesses.

Sarasota is reinventing itself, as all dynamic communities tend to do from time to time. Part of this process is focused along U.S. Highway 41, long known as the Tamiami Trail because it connects Tampa to Miami. Before the federal interstate highway system was built in the 1960s, the Tamiami Trail was Sarasota’s major north/south thoroughfare, and it remains a busy artery. The primary issue that Artspace was asked to address is the possibility of creating space for artists as a catalyst project for redevelopment along North

Trail, a section of Highway 41 that was once Sarasota’s “Main Street.” Like other historic Main Street highways across the country, North Trail is still dotted with old motels that predate the interstate era; many are still in use. The North Trail Redevelopment Partnership, formed in 2009 by then-Mayor Richard Clapp as a task force

A vintage marketing piece for Sarasota, “the outstanding city on one of the most unusual scenic highways in the world” – that is, the Tamiami Trail.

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comprised of local citizens to study, understand and work to facilitate positive redevelopment of the North Trail, is working on everything from zoning (heading toward a form-based code) to streetscape improvements, from bus rapid transit to bricks-and-mortar projects.

Given these new directions and community assets, it is not surprising that the City’s Cultural Plan, dating from 2006, is being revisited. City officials recognize that by providing affordable, sustainable space for artists, Sarasota can build its creative economy on a foundation that is already strong. The key is immediate intervention, especially as it relates to affordability. And we had a strong sense that many stakeholder groups in the community understand that the creative economy is the very essence of what makes Sarasota a desirable place to live.

Artspace came to Sarasota at the instigation of a local citizen, Veronica Morgan, who has done much for the local preservation movement and who is deeply tied to leadership in the area. Working for more than a year, Ms. Morgan and the local organizing committee were able to bring to the table a dynamic assembly of people representing many stakeholder groups and interests. These included the North Trail Redevelopment Partnership, the Arts and Culture Alliance of Sarasota County, the Community Foundation of Sarasota County, the City of Sarasota, and the Sarasota Alliance for Historic Preservation. Our scope of work included a series of focus groups, visits to potential sites, meetings with key stakeholders, and a public forum. The visit took place April 9-10, 2014. Artspace was represented by Wendy Holmes, Senior Vice President, Consulting and Strategic Partnerships, and Stacey Mickelson, Vice President, Government Relations.

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This report contains our observations, findings and recommendations based on what we saw and heard over two days in Sarasota. It is also informed by knowledge we have gained working in nearby communities and experiences of other cities around the United States that have invested in affordable housing and other facilities for artists. We believe that those experiences provide a useful context for evaluating the feasibility and importance of artist spaces in Sarasota. In that regard, we offer the following thoughts and observations:

Multi-tenant, multi-use creative spaces generate economic revitalization and development. Every project provides job opportunities before, during, and after construction.

Every independent artist is, in effect, the owner/operator of a cottage industry, generating economic activity by selling products or services, purchasing equipment and supplies, paying taxes, and otherwise contributing to the local economy.

To create affordable live/work housing for artists1 whose long-term affordability is guaranteed by covenants is to create and sustain an authentic community of local artists who collaborate not only with one another but also with other local, national, and international artists.

Arts projects help preserve old buildings, stabilize older neighborhoods and revitalize vacant and underutilized properties. Arts projects also help preserve cultural heritage by providing places where cultural art forms can be passed from one generation to the next.

1 By “affordable live/work housing for artists,” we refer specifically to the kind of rental housing that Artspace has been developing around the country for the last 25 years. Artspace’s 28 operating live/work projects are apartment buildings in which each rental unit has additional space – typically 100 to 150 square feet – that is designed for use as a studio by the resident artist. Our projects feature other amenities as well, including high ceilings, large windows, wide doorways, and durable surfaces in every unit; and community rooms that serve as gathering places and galleries.

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Arts facility projects are catalysts for private and public investment, such as façade improvements and general beautification, in the surrounding area.

These projects create permanent community spaces that give resident artists opportunities to interact with the public through gallery events, demonstrations, performances, and installations, and give the larger arts community opportunities to showcase their work.

Artists are good neighbors and active community members. Many artists collaborate with the larger educational, cultural, and business communities as teachers, adjunct professors, and volunteers with youth and cultural organizations.

We acknowledge and extend our gratitude to the community and to the arts and business leaders who, through their planning and participation, laid the groundwork for a successful two days. Special thanks to Veronica Morgan, our feasibility study champion; Sarasota Arts Alliance Executive Director Jim Shirley; Downtown Economic Development Coordinator Norm Gollub; and Chair Jay Patel and Vice Chair David Morriss of the North Trail Redevelopment Partnership, for their visioning efforts and thoughtful input into the process. These local leaders are essential to the future success of any effort Artspace might undertake in Sarasota.

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Findings

uring a Preliminary Feasibility Visit, Artspace gathers information in six key areas: project concept, arts market, site feasibility, financial feasibility, local leadership, and sustainable community impact.D

If the project concept has been determined, we evaluate it in the context of other factors. For example, if the community wishes to adapt a particular building for use as an arts facility, we consider whether the building is structurally sound, suitable for the intended use, for sale at a reasonable price, and so on. We ask, too, whether the project concept appears appropriate to the needs of the community. Are there enough artists in the area who need and qualify for affordable live/work space to justify the time and expense of developing a project? Is the difference between market rate and affordable rents sufficient to make a live/work project an attractive option for artists of low and moderate income? Because our business model requires substantial civic investment as well as fundraising in the private sector, we ask whether the community has the financial resources and the will to make a significant philanthropic investment in the project. We ask whether there are local leaders willing and able to advocate for the project in a variety of ways. Finally, we ask whether the project, if built, is capable of making an important difference to the community in both the short and long term. While these are not the only factors we consider in making recommendations, they help us frame the discussion.

PROJECT CONCEPT

Many communities have a clear project concept in mind before they contact Artspace. Buffalo, New York, for example, was interested in a

The Ringling Museum of Art in Sarasota

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live/work project to catalyze development in an economically challenged neighborhood. Brainerd, Minnesota, wanted to find a use for a junior high school that was being replaced by a new facility. In 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.

In Sarasota, we found a shared desire among the City’s business, arts, community, and civic leaders to continue incorporating the arts into the economic mix and the overall plan for sustainable growth, while advancing and promoting the cultural and artistic traditions that are core to Sarasota’s identity. The City has begun laying the groundwork for this vision through form-based zoning, at least along Highway 41, which will allow for greater flexibility in land uses and density. Since Artspace’s primary focus was on the North Trail area, we were responding to the City’s desire for continued development along the corridor – especially developments that have the potential to be catalytic in nature. We recognize, too, that the key civic and community goals of any project are to catalyze additional growth and to retain and attract artists, thereby continuing to shape Sarasota’s future as a community deeply invested in the power of the arts.

The City is specifically interested in the

redevelopment potential of one or more of the two-story motor lodges along the North Trail. Although these properties would be expensive to acquire, the City’s vision for transforming them into arts facilities has considerable appeal. We are aware of one such motor lodge conversion to living space for artists: the Oasis on Grand in Phoenix, Arizona. There the developer converted a 99-room 1950s-era motor lodge into 60 units of living space for artists at a cost of $5 million. Although the individual units are small – they range from 322 to 714

A marketing piece for Oasis on Grand, a motor lodge conversion project in Phoenix, Arizona

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square feet (with rents from $409 to $689) – and lack studios, project amenities include shared working spaces and a community gallery. Oasis on Grand is considered a “gateway” project near a light rail corridor and an existing arts community.

Artspace’s model for developing live/work artist facilities utilizes Low Income Housing Tax Credits (LIHTC) as a primary funding tool. While this model ensures long-term affordability by subsidizing the living spaces on the front end, it is most effective in communities where the market rate cost of housing is high compared to affordable rents (which are set by the U.S. Department of Housing and Urban Development).

Sarasota appears to fit that description: affordable space for creative people has long been widely available, but affordability is increasingly becoming an issue. A case in point is Towles Court, whose “venerable moss-draped oak trees…have shaded and protected this historic enclave of bungalows and cottages for nearly a century,” as the Towles website describes it. What was once a live/work colony still has lovely working studio spaces, but rents have risen and for many if not most of Sarasota’s artists its spaces are no longer affordable. (See www.towlescourt.com for details.)

The specific project concept we are testing in this study emphasizes the creation of a mixed-use facility containing three kinds of spaces: affordable rental live/work housing, with a focus on younger artists graduating from the four local colleges and universities; working studio spaces for more established artists; and space for creative businesses. A mixed-use arts facility would generate a critical mass of artists and creative activity that would draw visitors and arts patrons. It would create visibility difficult to achieve when artists and organizations are spread out geographically. Co-locating also offers greater opportunity for artists and creative business owners to undertake collective marketing and collaborative projects and events.

ARTS MARKET

An in-depth Arts Market Study is a required early step in the predevelopment phase of an Artspace live/work or mixed-use project,

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and is a step we highly recommend regardless of the community’s choice of developer or project model. The Arts Market Study includes an artist space needs survey (for live/work project concepts) and sometimes also includes a survey of creative businesses and arts/cultural nonprofits in the area (for mixed-use projects that anticipate significant space for non-residential commercial or nonprofit uses). In both instances, Artspace starts with a proprietary survey template that we developed 15 years ago. We then modify it with community input to reflect unique characteristics of the proposed project and local arts scene, and host it online for up to eight weeks. To date, we have used this survey instrument in more than 50 communities and received responses from more than 30,000 individual artists.

The primary goal of the survey is to determine the size and nature of the market for a live/work or mixed-use arts project in the community. We also use it to demonstrate a need for affordable rental housing sufficient to satisfy the various public and private entities that make financial investments in our projects.

The Artist Survey gathers a wealth of data about the area’s creatives, including their age, gender, ethnicity, household size, and other demographic information; the arts activities they practice and the arts facility features of most interest to them; their current income range and the percentage of it generated by art; their current studio or work space arrangement; and how much they are willing to pay for combined housing and studio space.

The Artist Survey tells us with reasonable accuracy how many live/work units the local arts community can fill. It can also tells us such things as which neighborhoods are of greatest interest and what types of shared spaces and amenities to include in the project. We generally determine the residential unit count of a proposed project by taking the number of artists who express interest in relocating to the project if it is built – and dividing that number by three. For example, if 120 artists meet both criteria, we plan for a 40-unit project. This conservative “triple redundancy” policy ensures that our projects lease up quickly and stay fully occupied over time. Because

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smaller projects are more expensive in terms of their per unit costs, and more difficult to fund using public subsidies, a 30-unit project is the smallest that Artspace will typically consider if we are to be the developer.

If a mixed-use project is under consideration, and the organization/business survey is conducted, the primary objectives of that survey include identifying the specific space needs of the respondents as well as their amenity and shared space preferences; understanding their capacity or readiness to take on new space and what rents they can afford; and developing a comprehensive matrix of interested entities that can serve as a starting place for space design planning and lease discussions.

Based on observations during the focus group sessions and public meeting, we believe that a deeper look at the market need and interest in Sarasota is both warranted and necessary. The feedback we received from artists indicated that there are many more artists who were not represented in the meetings and who either currently live in Sarasota or would be interested in living there if this type of opportunity existed. It was also noted that Sarasota is losing artists to the Tampa/St. Petersburg metro area and that providing space and programs to support artists in Sarasota would encourage more artists to stay. This anecdotal information should be substantiated through a formal data gathering process.

During our conversations and site visits, we also discovered unique needs and preferences of the Sarasota creative community that can help refine the project concept. For instance, we visited home studios of artists in the community. The feedback we received reflected their status as mid-career artists. As homeowners and long-time residents of Sarasota, they see a need not only for studio space but also for places to exhibit, teach, and gather.

Both the artist focus group and the public meeting were well attended. In terms of disciplines, the 30-person focus group was typically diverse with a mix of visual, performance, and mixed-media artists. There were also industrial artists, traditional artists, fiber

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artists, dancers, actors, and other theater artists. Some unique art forms were represented as well by a children’s book author and illustrator, a story teller, and a leather mask-maker.

We asked the focus group artists to tell us about their creative pursuits, provide information about where they do their work, and to complete the following sentence: “I wish Sarasota had ______ in the arts.” Among the responses:

A black box theater space for dance and experimental work, both rehearsing and performing

Help with marketing and promoting the arts Help retaining younger artists who attend one of the four local

colleges/universities but who don’t see future options for staying in Sarasota

Civic leadership creating a nurturing environment for Sarasota’s creatives

Advanced awareness of the industrial arts Affordable housing and studio space An open market for local artists to sell their work Art in places where people are congregating, not just in art

institutions Coffee shop/work space

Most of the focus group participants told us they have working studio spaces either in their homes or in commercial buildings. Some have live/work spaces which they own or lease from non-artists. Most of the focus group participants were over 40, which is typical; we encountered a wider age range of creative people at the public meeting, which drew more than 100 participants – a very good sign for interest and support for artists’ space.

Participants described city borders in the Sarasota area as porous and indicated that artists will go where they are supported. In other words, other artists could be recruited to Sarasota, and emerging artists could be convinced to stay in the area, if opportunities existed for them to live and work there. We would want to test that assertion through data collection methods like those listed above.

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We came away from our meetings with a sense of the great complexity of the Sarasota arts community, its opportunities, and its challenges. While Sarasota excels at promoting its creative sector and is endowed with dedicated and entrepreneurial individuals and an abundance of cultural assets, it struggles to be perceived as a hip arts community that can attract and retain creative people of all ages. An arts facility that provides live/work and non-residential spaces would add greatly to local efforts and should be explored further. We also feel that to fully realize the creative economic potential, multiple avenues should be pursued in a strategic and community-supported way. To put it another way, a single project is only one tool.

SITE ANALYSIS

During a Preliminary Feasibility Visit, Artspace’s primary goal is not to select a site but to identify candidates, neighborhoods, buildings, or land for further study should the project move forward. In Sarasota we spent several hours with civic, community, arts, and business leaders visiting sites along the Highway 41 corridor. It was clear that for the City and the core group alike, locating a project along Highway 41, where the City has already made significant investments, is a priority. Before coming to Sarasota, we provided our hosts with criteria to help them narrow down the site options before our tour. Nevertheless, we visited a large number of potential sites – eleven – and in this report, therefore, we will speak generally about them rather than attempt to rank them individually.

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All the sites were located in or close to the North Trail Overlay District, a corridor that follows the path of Highway 41 from downtown Sarasota to the northern end of the city. The Overlay District essentially corresponds to the North Trail Study Area shown on the map at left. It was created to encourage pedestrian uses, environmentally friendly development, and preservation of the historic motor lodges that line both sides of the highway. A mixed-use project could easily become a catalyst for additional residential growth along the corridor. While most of the core group were focused on the North

Trail, there seemed to be openness to other urban sites, should they be identified along the way.

It is important to reiterate, in this context, that while site selection is a critical component of an Artspace (or any other) major initiative, it should not drive the project. The key here is to gain a deeper understanding of the elements that make a site feasible for any given project concept, set of community goals, and economic resources.

In general, publicly held sites offer the greatest opportunity for success. A project in the model of an Artspace live/work facility relies on competitive, public funds that can

take a year or more to assemble. Purchasing a site prior to funding is not reocmmended, meaning that site control options are necessary. Property owners need to be willing to hold sites in limbo for one or more years, which is not appealing to all. Additionally, project feasbility relies on a low purchase price. The greater the cost of acquisition, the more susbidy will be necessary, typically from private philanthropic sources. Property owners who are looking for highest and best use for their land – and the greatest return on their investment – are not optimal partners in these projects. However, if a

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property owner is supportive of the oveall concept and willing to be creative in the transaction (as a seller and/or investor), then a privately held site is an option.

Given these caveats, the properties we looked at most closely – three motor lodges and two parcels of vacant land – are all privately owned. They range in size from just under one acre to more than two and in assessed value from $300,000 to just under $2 million. The known “asking” prices range from $1 million to $2.4 million. The top five properties are owned by singular ownership entities, which elevates complex property assembly for a prospective buyer. The three motor lodges are all large enough to accommodate between 40 and 70 units of live/work artist housing.

We refererenced the Oasis Hotel in Phoenix many times in terms of how an architect might creatively approach an adaptive reuse of the two-story motor lodges. Each property has the advantage of outdoor space that could be used to accommodate a variety of art forms – from “dirty” forms such as pottery and sculpture to “fire art” such as metal work and glass slumping.

While the North Trail is currently a mix of motels and quasi-industrial uses, it is bookended by several major cultural amenities, including the Ringling Art Museum and the Ringling College of Art & Design. Filling in the spaces between these two assets, a distance of 1.8 miles, makes sense for the community and is an important part of the North

One of the motor lodge sites along N. Tamiami Trail in Sarasota

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Trail redevelopment plans. Leading with arts and culture make even more sense given Sarasota’s strong arts and culture “brand.”

The top sites, as identified by core group, are the following: 4644 North Tamiami Trail – vacant land 4900 North Tamiami Trail – Days Inn 4675 North Tamiami Trail – Golden Host Motel 5349 North Tamiami Trail – Knights Inn 5350 North Tamiami Trail – vacant land

Once there is a stronger sense of the market for a live/work project in Sarasota, the site selection process can begin in earnest. Weighing factors touched on above (market preference; alignment with City, County and community goals; ease and cost of acquisition; parcel size; and funding options), the development team would narrow options to a small number of “top priority” sites. Due diligence in this phase would include discussions with property owners, review of available site information (environmental conditions, zoning, soil reports, and so on) and would progress to third-party evaluations as needed and ultimately site control negotiation for the priority site.

FINANCIAL ANALYSIS

An Artspace live/work project represents a significant investment of civic resources. A typical project of 50 to 70 units of affordable housing for artists plus community and commercial space costs $15 to $20 million. Predevelopment expenses – the “soft” costs, such as architects’ fees, that must be met before construction can begin – are seldom less than $750,000 regardless of the size of the project. Although a number of federal programs, chief among them Low Income Housing Tax Credits (LIHTCs), can be used to generate revenue for construction, we look to the community for private and public predevelopment (i.e., planning) funds. These typically include some combination of affordable housing allocations such as Community Development Block Grants, HOME funds, Tax Increment Financing, or the equivalent.

When considering financial feasibility and return on investment, it is important to note the multiple points of impact of a potential project

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site. The return on investment of an Artspace project typically includes not only affordable housing but also blight remediation, adaptive reuse of historic buildings (or urban infill), and infrastructure investment in the cultural economy. Artspace uses all of these arguments, and others, to make the case for funding at every level; and while we are skilled at using LIHTCs to provide much of the funding, we rely heavily on philanthropy for a variety of reasons. Federal, state, and local public funding is an ever-shrinking pot of money, and the competition for these funds can be fierce. In many states, indeed, the more valuable 9% tax credits are almost beyond reach. Less competitive (because they are less valuable) 4% tax credits can be substituted, but they generate less revenue and therefore require greater contributions from other sources – including gifts from foundations, corporations, and, in some cases, individuals.

One final consideration relating to financing and the gap is that the per-unit cost of an Artspace live/work project tends to be higher than the per-unit cost of a traditional LIHTC project. This factor – which can put us at a competitive disadvantage in LIHTC scoring – is due to several differences between our projects and traditional LIHTC projects, including:

larger units that include space (typically 100 to 150 square feet) for resident artists to use as studios;

wider hallways that can be used as galleries without impeding traffic flow;

large ground-floor community rooms that can be used as galleries, performance areas, and meeting spaces; and

large volumes of space within units due to their higher ceilings.

Because are projects are larger in these and other ways, all Artspace projects have a “philanthropic gap” representing the difference between the total project budget and the sum of all funding sources. This gap typically amounts to 10% to 15% of the total cost – but it is likely to be higher if 4% tax credits are used.

Our Finance Focus Group session was attended by members from the Community Foundation of Sarasota County, the Selby Foundation, 1st America and BB&T Banks, a local Sarasota developer, and the

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Sarasota Housing Authority. We at Artspace always appreciate having local affordable housing providers in our sessions, and we often work with qualified community development organizations and/or local developers to make projects work. We were encouraged by the participation of both city and private entities in the discussions about “where the funding might come from.” It was clear to us that a private/public partnership would be very possible in Sarasota.

Of particular interest to a potential Artspace development in Sarasota was a quick overview of the local community foundations. We learned that two of the three largest community foundations in Florida are based in Sarasota County. These foundations should, and likely will, play a large role in shaping the discussion of what happens along the North Trail. We also learned that one of these foundations is experienced in Program Related Investments (PRIs), whereby foundation money is loaned to nonprofits at below-market rates for mission-related projects. PRI terms are more desirable than those of conventional loans not only because of their low interest rates but because payment schedules can be stretched beyond traditional lending scenarios. In some cases, the loans can be forgiven after mutually agreed-upon goals and outcomes are met. Artspace has used PRIs on several projects and is very familiar with them.

Assuming that a mixed-use project moves forward, Artspace would approach potential commercial tenants much as we approach residential tenants. Our goal would be to seek relationships with creative businesses in need of space and to play both a business and a curatorial role with these prospective tenants. The amount of commercial space will depend, of course, on the building, the size of the parcel and most importantly, the neighborhood.

The chart below shows some typical funding sources for an Artspace mixed-use project. The example, the 60-unit Artspace Buffalo Lofts in Buffalo, New York, included both historic rehabilitation and new construction. Like Sarasota’s priority concept, the project was created as a catalyst for continued growth along an underutilized main corridor and helped to bridge commercial activity with residential. The State of New York offers both a federal and a state Low Income

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Housing Tax Credit, which is unusual. Project costs and sources can vary significantly from community to community and depend on the final project concept, but this example provides insight into the multiple layers of private and public funding that must come together for a project to break ground.

Because the LIHTC program plays such a pivotal role in any Artspace live/work project, we want to provide some additional information about its relevancy to Sarasota. As noted earlier, LIHTC-funded projects are most successful in areas where market rate residential rents are high. In more affordable communities, the market rate rents may be closer to HUD-subsidized rents, or local artists may find owning homes a preferable and achievable alternative. This is where a formal market survey process can be helpful. We can learn what artists are currently paying for rent and what they would be willing to pay in the future, and compare that to HUD rents. Even in communities where there is little or no difference between affordable and market-rate rents, an important point to consider is that an artist live/work project provides amenities not found in most other

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apartment complexes or even single-family homes, which can make the project more attractive than other options in the community – including abundant natural light, high ceilings, large and open floor plans, camaraderie among residents, shared networks, and the assurance of long-term affordability.

For reference, following are the current rental rates and household income limits as set by HUD for a project in Sarasota County in 2014. For purposes of this exercise we are looking at the highest income limits and corresponding rents as well as the lowest that we typically see in an Artspace model project.

Household sizeAnnual income

limit(60% AMI)

Annual income limit (30% AMI)

1 $24,120 $13,260

2 $27,540 $15,150

3 $30,960 $17,040

4 $34,380 $18,930

Number of bedrooms

Monthly rent(60% AMI)

Monthly rent(30% AMI)

1 $645 $355

2 $774 $426

3 $894 $492

In conclusion, we feel that there are both great funding opportunities and challenges in Sarasota. The purpose of this study and this section is simply to identify these and suggest some strategies for moving forward. We feel there is enough opportunity to continue into a predevelopment or consulting scope of work with the caveat that it should be a priority to consider the market in the context of the income limits and rental rates, and to identify potential partners and philanthropic supporters. If the community chooses to go down a path

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of expanding a home ownership concept, some of the same resources and partners would be relevant to that concept as well.

LOCAL LEADERSHIPWe consider local leadership to be the most important element impacting a project’s success. When individuals and officials stand at the helm of a project, it makes nearly all of the challenges (and there are many) eventually surmountable. Challenges that can be overcome with great leadership in place include securing project funding, site acquisition, and achieving timely project entitlements. In particular, city, county, and state elected officials can prioritize projects, make decisions that can help with competitive public funding applications, and assist in identifying sources for predevelopment and capital funding.

Good leaders do much more than make phone calls, advocate, and open doors. They also offer a vision around which the project and the community can rally. They offer creative solutions and remain truly active and invested. We were very impressed with leadership in Sarasota. Elected officials, city staff, county and state officials, and community leaders as well, all demonstrated these important characteristics.

Of particular note was representation from U. S. Rep. Vern Buchanan’s office. Rep. Buchanan sits on the powerful Ways & Means Committee and will have influential sway on pending legislation as it relates to tax reform in the United States. We mention this because Low Income Housing Tax Credits are subject to what is known as a “General Public Use Requirement” designed to ensure that they are used in ways that

provide public benefits. In 2008, Artspace successfully fought to

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include language in the Housing and Economic Recovery Act that guarantees the right of communities to apply LIHTCs to affordable housing projects which favor specified groups of tenants, including those “who are involved in artistic or literary activities.” Continuing this provision is essential if communities are to have the benefit of LIHTCs in rebuilding areas such as the North Trail corridor by developing affordable live/work spaces for artists.

The Arts Alliance of Sarasota County is an incredibly important player in the Sarasota arts community. We were pleased that its Executive Director, Jim Shirley, attended all of our meetings and was a member of the core group. Ongoing artist outreach and marketing efforts, program and cultural plan development should continue to draw upon the expertise and assistance of the Arts Alliance. The Arts Alliance makes great use of social media to stay in touch with the community. This tendency will serve a project well. Ongoing outreach to artists will be critical to all the recommendations outlined above. Additionally, working with local press and bloggers to invite participation and keep the community informed about new programs and progress is important.

All in all, the quality and diversity of representatives at the table was impressive. All who participated in the leadership focus group, as well as the core group and the public meeting, offered ideas and support for the project concept and clearly have the skills to achieve collaborative goals. City-led and successful partnership developments are evidence of the experience and ability to get things done. Coming into the consulting visit, we were aware the project was already important to the local community. Our role was primarily to educate, orchestrate, and provide some suggestions for moving this vision forward. The broader aim is to bring Artspace on as a developer with the capacity to oversee the development and long-term stewardship of the project. It was a pleasure meeting with so many community leaders already convinced of the power of the arts to transform and armed with the characteristics to make it happen.

COMMUNITY IMPACTOne of Artspace’s priorities is to create affordable housing that helps

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preserve and maintain the community fabric and the artistic culture that often catalyzes change – avoiding the gentrification-led displacement which often follows artist communities. Permanent affordable space ensures that artists, creative businesses, and nonprofits have a long-term

opportunity to interact with and influence their dynamic community. The space we create is the foundation for change; the resident artists, businesses, and community partnerships are what create the unique sense of place.

As the project concept evolves, it will be important to continue to emphasize the project’s “placemaking” capacity by admitting multi-disciplinary artist residents and organizations and incorporating community-accessible space for working, programming, collaborations, and rentals. Not only would the artist residents require shared spaces, but the community would benefit from having access to art displays, workshops and classes, demonstrations, meet-ups, lectures/ dialogues, and other on-site events.

Site selection will be an important contributing factor to the project’s overall sustained community impact. As discussed above, we agree that the North Trail is a good area of focus because a catalyst development in this location should leverage other public and private resources. But it is not the only location and not the only consideration when evaluating sites. A live/work project anywhere in Sarasota will secure an affordable future for the area’s artists and help to retain its young creative residents. The North Trail is on a path to become a more pedestrian-friendly mixed-use area. An artist live/work project with some commercial space could help tip the scale.

An Artspace project is a local project. We work with the community at every stage to ensure our site, design, amenities, and non-residential

One of the many motels along the North Trail

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tenants and uses best serve the neighborhood and the city as a whole. We hire locally whenever possible during the development, design, construction, and operational phases, and look for sustainable long-term relationships for forging maximum long-term impact. If the community’s goals for this project include harnessing the transformational power of the arts, then it will find that its own community assets and leaders will play a significant role in realizing this ideal and ensuring the long-term, positive community impact of the project.

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Recommendations& Next Steps

arasota has long been identified with the arts. Civic leaders as well as ordinary citizens understand that the arts help make Sarasota a special place. Although we met some artists who

believe that nearby Bradenton is generally more supportive of new development (whether are-related or not), Sarasota has clearly established itself as a community with a deep ongoing commitment to the arts and culture as exemplified by institutions like the Ringling Art Museum, the Historic Asolo Theater, and the Sarasota Opera.

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Judging by our visit, Sarasota also has the inclination and leadership needed to build on this foundation by transforming the North Trail into something more lively and attractive than an urban highway lined by motor lodges, restaurants, and parking lots. An affordable mixed-use arts project could be an important catalyst of change, serving as a focal point for the City’s marketing efforts while providing needed affordable space for artists. A single facility would not be the only piece of an overall strategy designed to build Sarasota’s creative economy, but it would certainly be a high-profile one.

What follows is a set of recommendation for next steps that we believe will help Sarasota’s civic and arts leaders move forward effectively, either with Artspace or with one or more other developers.

1. Conduct an Arts Market Survey

The most important next step for Sarasota is to quantify the demand for artist space by means of a formal Arts Market Survey. It is the only reliable way we know to determine the need – and hence the market – for affordable live/work space in a community. In general, we recommend proceeding with an Arts Market Survey if, based on our Preliminary Feasibility Visit, we are confident that the survey will indicate the existence of a market sufficient to support a project of at least 30 and preferably 40 or more units. In

a few cases, we recommend an Artist Market Survey to a city that wishes to have a better or more complete picture of the size and makeup of its arts community, even though we believe that the survey is unlikely to reveal a market for an Artspace project. As noted above (page 8), based on observations during the focus group sessions and public meeting, we believe that a deeper look at the market need and interest in Sarasota is warranted. In our view, there is a strong possibility that a market of sufficient size exists to justify a project in Sarasota. A full-scale survey is not inexpensive, but its cost is small compared to that of building a multi-million dollar project for which little or no market exists.

2. Revisit and update the Cultural Plan

The City and the Arts and Cultural Alliance were working on a Cultural Plan a decade ago but shelved it, we were told, when the economy went into recession in 2008. We think the community would be smart to return to that plan, update it, and include goals related to artist spaces in the North Trail corridor. The plan should also be brought into alignment with the City’s most recent comprehensive plan. Because effective cultural planning involves substantial community input, the Cultural Plan could take a year or more to complete; but given current civic priorities we see no reason to delay moving forward with an affordable artist space development; the two processes can proceed simultaneously. In order for Sarasota to succeed fully at prioritizing investment and leveraging grassroots efforts, we suggest developing and adopting a new cultural plan. The 2006 Cultural Plan is now nearly a decade old. The City’s decision to revisit that document is a good place to start. Although some sections of it are probably outdated, it represents the best thinking of civic and cultural leaders a decade ago and is probably relevant today. Two examples of exemplary plans that can be used to facilitate this process can be found at: http://www.cityofmadison.com/mac/documents/

MadisonCulturalPlanBeg-Findings-All.pdf http://imaginechattanooga2020.org/index.php/documents/

3. Keep the Arts Alliance in a leadership role

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The Arts Alliance of Sarasota County is a vitally important player in the Sarasota arts community. We were pleased that Executive Director Jim Shirley attended all of our meetings and was a member of the core group. Ongoing artist outreach and marketing efforts, program and cultural plan development should continue to draw upon the expertise and assistance of the Arts Alliance.

The Arts Alliance already makes good use of social media to stay in touch with the community. This will serve a project well. Ongoing outreach to artists will be vital to the process. Additionally, working with local press and bloggers to invite participation and keep the community informed about new programs and progress is important. The Arts Alliance should begin to build lists of artists and creative businesses that are interested in affordable space opportunities in Sarasota.

4. Continue conversations with property owners along the North Trail.

One of the challenges of redeveloping the North Trail, as noted earlier, is that most of the potential sites are privately owned and will be expensive to acquire. Identifying an owner, such as a City or County agency, could help expedite a physical project and reduce the potential acquisition costs of a site or building. Consider, too, if there are building/land owners who could utilize a significant tax deduction for the donation of land to a nonprofit.

There are many other opportunities for the community and local leaders to keep the ball rolling on an artist live/work project without losing momentum during a predevelopment scope of work development and subsequent funding phase. We do not feel a sense of urgency to move quickly on securing a site or delving deeply into development work. We do feel that a thoughtful community-building, concept-refining and market study process as outlined in the recommendations above will be the best course for a successful project in Sarasota in the long run.

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We at Artspace welcome an opportunity to continue our work in Sarasota and with the tremendously dedicated leaders and community members we met during our two days. We hope to be a part of any strategy or affordable artist live/work space development in Sarasota’s future.

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APPENDIX 1

THE PATH OF AN ARTSPACE PROJECT

Rome wasn’t built in a day, and neither is an Artspace project. In fact, a typical Artspace live/work project takes from three to five years to complete. No two projects, of course, are precisely alike. But they all travel a similar path through the development process. Here is a brief look at a typical Artspace live/work project as it proceeds from first inquiries through feasibility studies, predevelopment, and development to completion and occupancy. *Note that our recommendations for Avondale do diverge slightly from this standard example. We recommend that Step II be divided into two categories as noted above in the Next Steps section of this report. Step II (a) would involve additional community input and concept refinement while Step II (b) is a modified approach to a traditional arts market survey and site control/project implementation.

STEP 1: PRELIMINARY FEASIBILITY

Overview Information Gathering

Primary Activities

Meet with artists, civic leaders, and other stakeholders

Conduct public meeting to introduce Artspace and solicit feedback

Tour candidate buildings/sites

Deliverables Written report with recommendations for next steps

Time frame 2 days

Cost $15,000

STEP 2: ARTS MARKET SURVEY

Overview Assessing the Need

Primary Activities

Assemble comprehensive list of artists (and arts organizations, if applicable) in area

Conduct public meeting to launch survey

Analyze and report on survey findings

Deliverables Written report with recommendations for next steps

Time frame 4-6 months

Cost $30,000 (artists only) or $42,500 (artists and arts

organizations)

STEP 3: PREDEVELOPMENT I

Overview Determining Project Location and Size

Primary

Activities

Work with City and other stakeholders to establish (a) preliminary project scope and (b) space development program for evaluating building and site capacity

Analyze candidate building/sites with respect to cost, availability, and other factors impacting their ability to address development program goals

Review existing information about potential site(s) to identify key legal, environmental, physical, and financial issues affecting their suitability

• Negotiate with property owners with goal of obtaining site control agreement

• Work toward a purchase agreement or other means of site control

Deliverables Confirmation of development space program and goals

Assessment of site suitability and identification of any contingent conditions to be resolved through continued due diligence

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Site control agreement, including acknowledgement that site control may not be finalized before completion of Step 3 and that Step 4 should not commence until site control is obtained

Summary of project status

Time frame 3-6 months

Cost $150,000

STEP 4: PREDEVELOPMENT II

Overview Project Design and Financial Modeling

Primary

Activities

With City participation, establish process for selecting architectural team

Confirm development goals and space program with architectural team

Engage architect to create conceptual plans and schematic designs (can also happen in Step 3)

Engage cost consultant or contractor to provide pre-construction services to the project

Resolve any contingent conditions relating to site control through continued due diligence

Create capital (sources and uses of funds) and operating (annual income and expense) budgets

Obtain proposals and/or letters of interest from lender and equity investor financing partners

Submit low income housing tax credit application (if applicable)

Submit other financing applications as applicable

Deliverables

Conceptual plans

Schematic designs

Financial pro-forma detailing capital and operating budget

Preliminary proposals and letters of interest for project mortgage and equity financing

Tax credit and/or other project financing applications

Summary of project status

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Time frame 10-13 months

Cost $350,000

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STEP 5: PREDEVELOPMENT III

Overview From Tax Credits (or Primary Source of Equity) to

Financial Closing

Primary

Activities

Secure final gap funding commitments

Raise funds for equity, including private sector philanthropic dollars

Complete construction documents and submit permit applications

Negotiate construction and permanent loan commitments

Negotiate limited partner equity investment commitments

Advance project to construction closing

Deliverables Successful closing and commencement of construction

Time frame 4-6 months

Cost $250,000

STEP 6: CONSTRUCTION

Overview Construction and Lease-up

Primary

Activities

Oversee project construction

Engage local management company

Identify commercial tenants and sign lease agreements

Conduct residential tenant selection process

Deliverables

Completed project

Time frame 6-10 months

Cost Depends on project (not part of predevelopment

contract)

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APPENDIX 2

BUILDING BETTER COMMUNITIES THROUGH THE ARTS

What makes a city great? Across America, cities large and small are discovering that one essential quality of every great city is a great arts community. In an era when people are freer than ever to choose where they live, vital arts communities help cities attract and retain residents and businesses. Thriving arts districts are magnets for tourists, restaurants, theaters, and creative industries. In a great city, the arts are not an extra, something to be considered only after “more important” items on the civic agenda are funded. In a great city, the arts are as fundamental as streets, parks, and public transportation.

At Artspace, helping cities integrate the arts into their civic agendas is part of our core business. Over the last two decades we have completed 35 major arts projects that contain more than 1,100 affordable residences – each with space for a built-in studio – for artists and their families and provide more than a million square feet where artists and arts organizations work, teach, exhibit, rehearsal, perform, and conduct business.

We have seen firsthand the power of the arts to transform urban landscapes. Two of our earliest projects helped launch the celebrated renaissance of Saint Paul’s Lowertown neighborhood during the 1990s. In Reno, a lively arts district has sprung up around an Artspace project that opened a decade ago. An Artspace project in Seattle turned an abandoned block in Pioneer Square into the center of that city’s independent gallery scene.

What is Artspace?

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Established in 1979 to serve as an advocate for artists’ space needs, Artspace effectively fulfilled that mission for nearly a decade. By the late 1980s, however, it was clear that the problem required a more proactive approach, and Artspace made the leap from advocate to developer. Today Artspace is widely recognized as America’s leader in creative placemaking.

As a mission-driven nonprofit, Artspace is committed both to the artists who live and work in our projects and to the communities of which they are a part. We work with civic leaders to ensure that our projects successfully deal with the issues they were designed to address.

Our programsArtspace programs fall into three categories: property development, asset management, and national consulting.

Property developmentDevelopment projects, which typically involve the adaptive reuse of older buildings but can also involve new construction, are the most visible of Artspace’s activities. Artspace typically completes two to four projects each year. Most projects take three to five years from inception to operation.

Asset managementArtspace owns or co-owns all the buildings it develops; our portfolio now contains more than $750 million worth of real property. All our projects are financially self-sustaining; we have never returned to a community to ask for operating support for a project once it has been placed into operation. Revenues in excess of expenses are set aside for preventive maintenance, commons area improvements, and building upgrades.

National consultingArtspace acts as a consultant to communities, organizations, and individuals seeking information and advice about developing and operating affordable housing and work space for artists,

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performing arts centers, and cultural districts. Our expertise as an arts developer gives us not only a unique perspective but also a unique set of skills, and sharing this knowledge we have amassed over the years is central to our mission.

Our historyArtspace’s first live/work project opened its doors in 1990. In the mid-1990s, Artspace developed its first project outside Minnesota, the 37-unit Spinning Plate Artist Lofts in Pittsburgh. Invitations to work in other states soon followed. Artspace is now the nation’s leading developer of live/work housing for artists with 35 projects in operation from coast to coast. In all, these projects contain more than 1,100 residential units and more than 350 creative businesses and nonprofit arts-focused organizations.

Artspace is now a nationally prominent organization with offices in Minneapolis, Seattle, New York, New Orleans, Los Angeles, and Washington, D.C. We have projects in operation, under construction, or in development in 20 states. Our national consulting program has helped communities in virtually every state address their arts-related space issues. The nature of our work is evolving, too, to include multiple-facility projects, long-range planning, arts districts, and arts initiatives designed to serve culturally specific groups such as native Hawaiians, the communities of color in New Orleans, and the Native Americans of the Northern Plains.

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