Tag Archives: economic development in the arts

Privatizing Community Quality of Life: Coming Soon to a Community Near You

Imagine this scenario: by 2020 your parks, your performing arts centers, your community art gallery, your neighborhood community centers, your soccer fields, your local walking trails, your zoo, maybe even your library will be operated on contract by businesses that find ways to make a profit. Those businesses will form the nucleus of a growing new economic sector of real profitability to America. Some of them will no-doubt even trade on the NY Stock Exchange. Too strange to believe? Not any more.

Cities across America have spent decades upping the ante on investment in livability as their mechanism to up the tax revenues they have received, and it has been a profitable strategy. Build the aquatic center, the new tennis courts, the lovely performing arts hall, the zoo, the botanical gardens, the gallery complex, the fabulous library and then reap the rewards with high property values and a desirable community that in turn attracts businesses and on-going economic investment.

Don’t accept any of it as a given any more. In fact, anticipate and get out ahead of the ways where quality of life investment has been and will continue to evolve.

In the past few months there have been all sorts of interesting RFPs for private management of civic assets, and the tempo seems to be increasing, not slowing. “Private management company sought for pool complex.” “ Private management sought for community neighborhood centers.” “Private management sought for arts centers.” “ Private management sought for operation of city parks.” “Private management sought for zoo.” Not “local nonprofit” sought. Not “local partner” sought. Private management sought.

It is a sea change, and it could be coming to a neighborhood near you before you blink twice. Cities are actively soliciting and searching for profit businesses to take on many of the quality of life assets that are not producing. Basically, they are dumping responsibility for under-performing or deficit-causing assets while still seeking ways to benefit from the property tax revenues all municipalities need to earn through having a comprehensive set of quality of life offerings. And in the process, they don’t want to become once again potentially saddled with bailing out non-profit operators that would stand to become permanent arms-length extensions of government. No more “hand over the arts center to a nonprofit that you’ll end up, in turn, having to fund to operate the arts center.” Cities have had it with that shell game. Instead contract a management company to run it and let them figure out how to craft a financially viable model. And they will.

What does it mean?

First, it means a real civic fatigue with the given assumptions of subsidy is a norm. Debt is just too big to be willing to enter into partnerships that are simply going to remove direct red ink from one column only to put the red ink – in the form of operating grants, for example – into another column. Frustration with subsidy-as-norm approaches is over the top.

Governments are looking for something better. They want flourishing, brightly lit and well maintained public amenities that work for the facility operators – who, ideally, make a profit – and that aren’t a drain on public resources. They want a win-win out of a dead-end.

What are the results of this trend?

Chances are, citizens will be paying more out of pocket to use those assets. Have you had to pay for your kids’ music or sports in school lately? Steep, right? Well, expect the same thing for swimming classes at the pool this summer or for art camp for your eight year old in August. Expect the same thing for the water color class you always wanted to take through parks and rec, and anticipate paying commercially competitive rates to rent the neighborhood center for your family reunion. Your library card? How’s $25 a year for one person or $40 for a family?

Really affordable “public” amenities are going to disappear. It will be pay-as-you-go. Your first graders’ soccer team will pay to rent the soccer fields. You’ll have to pay a competitive “for profit” rate to take your pottery class. Your community band will pay more to rent the performing hall.

The businesses that contract to operate these once-public assets aren’t stupid. They know they have to find the price points for their markets and still be able to turn a profit. There will be different prices at different locations. Looking for a way to save? You may drive to the other side of town to get a better deal than your own softball fields offer. Chances are, these new service-merchants will focus only on what can sell, and sell out. Rather than broadening the offerings, they may limit the camps, sports classes, arts classes and after school programs to those that have a large enough popularity to work.

Does it have to happen? Will it be terrible? Or, will it be at least be tolerable?

It probably does have to happen, because we as a society have let it happen. We’ve just assumed and assumed that more amenities can be added every year, no matter the cost, and that somehow it will all work out fine in the end. Too much red ink and too many required subsidies later, our elected officials are drawing lines in the sand.

As for how terrible it will be depends on your perspective. Chances are there will be some real messes out there. But maybe we are in for a complete redo in the way we think about delivery of amenities, and in the process there may be an entire new industry of service providing businesses that excel and thrive and grow to become a valued economic sector. Maybe we’ll find out that a lot of the amenities we thought needed subsidy don’t, and that we’ll all pay for those amenities we value.

If we look at it through the lens of the American entrepreneurial eye, the benefits can be huge. Why not? “Zoos, Inc.” as a Fortune 1000 company. “Arts –n-Kids” as a national provider of quality arts learning in summer camps at parks in 500 cities across the country, and growing. “Community Center, Inc.” as the leading provider of facilities and program management for neighborhood centers in the northeast. You get the idea. It has happened in higher education. Our community amenities could possibly move from subsidy rolls and taxpayer responsibilities to businesses with values that attract investments and shareholders. And, possibly, there is something attractive about seeing quality of life elements that had no determinable financial value potentially transformed into businesses that could provide share-holder benefits to thousands.

Stay tuned. I have a feeling we won’t have to wait too long to find out.

More than Creative Workers: Creative Exports

There’s much more to creating a creative economy than calling your city a friendly home for creative workers. There’s more to it than offering jobs that are (potentially) sustainable, more than a convivial lifestyle for the creatively inclined. There is even more than winning new visitors who spend money locally, though this is in itself significant. A centerpiece of economic development is exports – gaining new dollars into the economy from other markets that buy what you produce. As such, an export plan, strategies, and sales force are essential to the success of a creative economy. When I think about the arts councils of tomorrow, the roles of chambers of commerce and economic development agencies in fostering the creative economy, the first thing I think of is how all of these can work together to create a climate favorable for and even facilitating the export of local creativity-based products and services to create new revenue from outside the market.

Exporting drove the growth of the American arts sector in its early post WWII decades, though it was largely focused around the major institutions from the major population centers. In the heyday of recordings and tours, performing arts organizations and museums alike realized revenue from export sales far outside their own markets. (The recording contracts of old brought in real new dollars from around the country and around the globe. And the brand and image boosts from tours brought in more than audience and donor revenue: it rubbed off on other export products, opening up markets for other products from the same cities. Mayors and business delegations used to go along on international tours with their local orchestras or ballet companies for this very reason.)

Those days are largely gone. At the same time, hundreds of smaller cities and towns now seek to realize economic gain from creativity, and the creation and maintenance of such an economic gain needs more than cultural tourism to drive it. Today’s smaller markets need to export creativity, just as our big cities did a generation ago. We need a new generation of export strategies, developed and implemented at the local levels, to open up, expand, and sustain national and international markets for local creative work that includes everything from fine art to creative innovation – and is likely delivered via technology.

To get there, new training for the field is important. How does an artist move from a local market or a regional tour market to an international market? How does an artist entrepreneur connect to and supply an international buyer market? And how does this local export industry grow and thrive, so that the attention and money that comes into the market from the first sale leads to greater opportunities as your city becomes increasingly known for its creative products? What about protecting intellectual property rights for the creator?

There’s another interesting point to thinking about the exportability of creative work. Is it of the quality and uniqueness that claims interest and purchase from other markets? The ability to succeed as exports drove a huge number of America’s arts organizations to invest heavily in excellence in the decades post WWII. Local leaders rationalized making investments to attract top artists to take up residency in their communities and spend their careers on their stages so that they could compete and win market share outside their own communities, through the unique product to entice new visitors, recordings, touring and other outlets. (I have a hunch that a great deal of what was initially thought of as short term investment to build highly competitive creative (arts) product went on to become annual grant funding. Along the way, the original rational of funding excellence that had export value was lost, to be replaced with more locally-oriented definitions of excellence, outreach, or service, which I think led to a lot of the anti-funding sentiments out there from politicians and local business leaders who once supported arts funding.)

As it was a generation ago, it is time to raise the exportability issue. Other revenue options are constrained. Funding is diminished. Local markets aren’t big enough to sustain local creative economies. Yet creative product is highly prized and valued world wide, and America’s creatives take the back seat to no one. In this global economy, our collective creative economy goals should be to win ever greater international market share and benefits back into our local economies.