January
2003
Trenton
Speaks: The Case for Arts Investment
By
Dan Dodson
 |
|
Dan
Dodson
|
I
don't want this article to sound like an enthusiast telling you
to support the arts because it's good for you. While I was raised
to appreciate the arts at the expense of other entertainment,
I'm under no illusion that Beethoven will supplant Eminem anytime
soon. To be honest, most of my arts volunteer work has been a
thinly veiled ploy to meet women. With due respect to Trenton's
wonderful arts community, I'm not making the case for arts investment
to raise the quality of the soul but rather to raise the value
of Trenton's property
In
my September 2002 Downtowner article "The Case Against Affordable
Housing", I made the argument that Trenton needs to raise
its median income by attracting more high income residents. Fundamental
to this argument is making Trenton attractive to new residents
with disposable income. I support this objective as the key to
building a sustainable city that can provide both enlightenment
and charity for its citizens.
However
attracting wealthy big spenders to Trenton isn't so easy. If it
were, we'd be crawling with them.
We
have some things working against us including a lack of upscale
housing, high crime and schools with a perception problem. We
have an incredibly high property tax rate (3.76%) and we struggle
to pay for our welfare programs. According to Economic Development
Incentives, Suburban Growth and Urban Redevelopment in New Jersey
by Alan Mallach, Trenton, like other urban cities, is filled with
land that has negative property value. With all this going against
us, we find it difficult to attract high value residential investment
to offset the tax burden and make it possible to properly support
our citizens.
Can
investing more heavily in the arts be the key to starting a renaissance
in Trenton?
The
city's investment in the arts is the best way to stimulate Trenton's
revitalization. Arts spending has a multiplier effect on the economy
and the resulting arts culture has a positive effect on the decision
to move to Trenton. With an increased tax roll, we can afford
our social programs.
Investing
in the arts isn't expensive.
The
arts has a powerful economic multiplier effect. According to American
for the Arts' Arts & Economic Prosperity: The Economic
Impact of Nonprofit Arts Organization Audiences, $100,000
of spending by a non-profit arts organization generates 3.36 jobs
and $2,841 in tax revenue for a city the size of Trenton. Additionally,
event-related expenditures for meals, souvenirs etc. average $22.10
per person. According to the Trenton Arts Connection, Trenton's
annual arts attendance was 421,000 people a year in 2000 which
would yield $9.3M in indirect revenues.
According
to the Pennsylvania Economy League's Greater Philadelphia's
Competitive Edge: The Nonprofit Culture Industry and its Economic
Value to the Region, $1 spent on arts in Philadelphia generates
$2 in organizational spending. According to Arts as Economic
Development: Beyond the Hype by Bridget Wiedman, spending
in Trenton may not benefit quite as much, but the effect on Mercer
County could be similar.
If
our city government can carefully invest in responsible arts organizations
it will help attract state, federal and private funding. Arts
funders often see city investment as a "seal of approval"
for arts organizations. They know that city officials are close
to the organization and won't invest their limited funds if the
group isn't viable. For every $1 the city invests, arts organizations
will receive $9 in from other sources.
Increasing
the city's attractiveness impacts the tax roll.
The
big payoff in arts investment comes from increasing the city's
attractiveness to residents with disposable income. People like
to live near where they play. Art museums provide pleasant afternoon
diversions. Symphonies, theater and opera are the bulwark of "date
night" which includes an expensive dinner and après
event drinks. Outdoor sculpture directly improves nearby real
estate value and outdoor festivals create a sense of community
and fun.
In
a survey entitled "Why people move to and away from New York
City", 56% cited cultural attractions as a reason to move
to the city.
The
recently announced Performa Entertainment project in South Trenton
is proof of the theory. Performa is basing its development plans
on creating a jazz themed entertainment district adjacent to new
market rate housing. Pardon the cynicism, but I doubt Performa
is investing in the arts just for fun.
The
following diagram shows how arts investment is a catalyst for
increasing the city's ability to solve its social problems. Notice
that arts investment creates a virtuous circle of beneficial effects.
Therefore, the arts must be a high investment priority for
the city.
City
investment in the arts is highly leveraged by federal, state and
private funding. Additionally, spending for arts events is matched
by indirect spending on items such as food. However, a city government
will not recoup its investment from direct and indirect tax receipts.
The real benefit from arts investment is the increase in the city's
attractiveness to home and business investment.
Though
it requires further study, increasing attractiveness through the
arts can easily produce a three year pay-back. Given that the
spending impact from the arts halves the city's exposure, the
actual pay-back will be 1.5 years or 70% ROI. This is a return
that can be reinvested not only in the arts, but public safety
and social programs. These are pretty good results for government
work.
I'm not letting it lie.
Apparently
our city council doesn't share Performa's investment philosophy.
Last May, The Trenton Arts Roundtable sent all 27 city council
candidates a survey on arts issues. Seven candidates returned
the survey, the results of which were published in May's Downtowner
(see the results at www.trentondowntowner.com).
Only one of our current council members was among the seven. We'll
need a different attitude in city hall for the arts to kick-start
Trenton's renaissance.
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