By Shelley Trott, Director, Arts Strategy & Ventures, Kenneth Rainin Foundation

I’ve spent a good part of my life in the arts—as a dancer and choreographer, teacher, filmmaker, and now a funder with the Kenneth Rainin Foundation. The Foundation invests in visionary artists and small to mid-size arts organizations in the Bay Area that push the boundaries of creative expression. So when we began seeing their work threatened by a volatile real estate market, we had to seek a solution.

Today, more than ever before, artists and culture workers like you are impacted by rapidly escalating rents and an uncertain funding environment. A 2015 survey revealed a particularly daunting statistic—68% of San Francisco nonprofits may need to make a decision about moving in the next five years due to sharply rising rents. In fact, artists and cultural organizations throughout the Bay Area are increasingly vulnerable to instability and displacement. Yet physical space is vital to creating and experiencing art. If art spaces disappear, how will our communities remain vibrant? 

"Chinatown Blues" by Heidi Duckler Dance Theatre. Photo: Eric Simpson

A Solution to Protect Valued Arts and Cultural Nonprofits

Our challenge was clear—in order to protect our valued cultural assets, we needed to help small- to mid-size organizations secure safe, affordable space, and gain a foothold in a highly competitive real estate market.

We needed a game changer.  And we believe we’ve found one in the Rainin Arts Real Estate Strategy.

The journey for this groundbreaking solution began five years ago when a growing exodus of arts groups and individual artists threatened San Francisco’s vibrant cultural identity and its diverse arts communities. Fearing the loss of vital organizations, the Rainin Foundation brought together progressive thinkers on creative finance and nonprofits like the Northern California Community Loan Fund to help us challenge the status quo.

Together, we developed the Rainin Arts Real Estate Strategy, which creates a pathway for arts organizations to purchase real estate. At the center of the model is a real estate holding company like the San Francisco-based Community Arts Stabilization Trust (CAST), which uses existing financial tools, like Federal New Market Tax Credits, and leverages public and private resources.

CAST mobilizes these diverse cross-sector partners to obtain financing that is typically out of reach for small and mid-size arts groups. By channeling these investments into securing permanent, affordable space for these groups, this approach helps to stabilize the market and creates a more equitable playing field in an environment that often favors large institutions. 

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

Incubating a New Approach in San Francisco

This bold solution came just in time for CounterPulse, whose 25-year legacy as an incubator of experimental, interdisciplinary dance and performance was in jeopardy. They were nearing the end of a long-term lease at their SoMa venue and faced a massive rent spike or displacement—or both.

Instead, CounterPulse took a leap of faith to test the Rainin Arts Real Estate Strategy and CAST model with us, and we are grateful they did. As one of our San Francisco grantees, they were a perfect fit. CounterPulse worked with CAST to secure a lease with an option-to-buy agreement, and to undertake a major renovation of their new home in San Francisco’s Tenderloin District. The building opened to the public in 2016.

Their space now boasts a state-of-the-art theater, rehearsal studio, office space, and three-story lobby with full access for performers with limited mobility. So far, CounterPulse has leveraged their new home to raise a record-breaking $4 million toward their $6 million capital campaign goal.

Today, CounterPulse pays below market rent while it raises capital to purchase its new home. In seven to ten years, they will acquire the building at the original sale price and CAST will then recycle the money to help another nonprofit arts group in need of a home. Even better—thanks to a deed restriction, the building is protected for use by arts nonprofits in perpetuity.

By helping to create affordable, safe and permanent spaces for the arts, the Rainin Arts Real Estate Strategy offers a model for how cities can maintain vibrant and creative communities. So, how can you leverage it to advocate for cultural vibrancy and equity? 

Irene Hsiao, Melissa Gomez, and Daiane Lopes da Silva performing in the new CounterPulse theater. Photo: Weidong Yang

Taking Action

1. Learn more about the strategy. Go online to the Rainin Arts Real Estate Strategy website to see how the model works and what entities are crucial pieces to the puzzle, and to equip yourself with hard data about the impacts of arts and culture in our nation.
2. Reach out to your funders and engage them in a conversation about this solution.
3. Join me at the upcoming ABBA meeting on Friday, May 12, 10:30am-12pm, where I’ll talk more about what we’ve learned. Together we can explore ideas for how you can take action with policy makers and funders. 

The Rainin Arts Real Estate Strategy is a solution that’s primed for engaging a broad coalition of advocates like you, who are invested in quality of life, creative expression, cultural equity and vibrant neighborhoods. I hope to see you at the ABBA meeting on May 12.

Shelley Trott
Director, Arts Strategy & Ventures

Kenneth Rainin Foundation
http://krfoundation.org/about/who-we-are/staff/shelley-trott