Sustaining the arts and creative placemaking through tax increment financing, Part 2

Some philanthropists like to have their names attached to theaters or museum galleries.  But as far as we know, none of them try to get their names put on an office copier or an accounting position.

One of the things that makes sustaining the arts so difficult is that it is harder to get funding for the back office operations -- that is, general operating support -- than for specific projects.  As a result, organizations that should be spending more time building their organizational infrastructure are instead doing the things that bring them attention from funders.

That's why the arts can benefit from a revenue stream that doesn't rely on a private funder's particular interest.  In the previous essay on this topic, I talked about how Allegheny County and the state of Colorado generated hundreds of millions of dollars for arts through a sales tax initiative.  More interestingly, Allegheny County is able to increase the amount going to the arts because of this revenue model.

I argued that states could develop a funding pool without raising sales taxes.  What states or districts can do is to reserve a portion of taxes above a base for the arts. (This is a model known as tax increment financing [TIF], which is used in most of the country to support big development projects.)   This money can help support creative placemaking activities that not only benefit the arts, but also make communities more attractive for cultural tourism and businesses that rely on highly educated workers.  As the arts improve the quality of place, attracting more shoppers and workers, people spend more money, and more support goes to the arts, and the cycle continues.

This fund can help to support the kinds of activities that are less likely to be supported by private foundations and corporations, including:

• Organizational development and administrative activities that help arts organizations become more effective.
• Place marketing efforts and collaboratives, such as arts councils.  While individual organizations may want to support local arts councils and efforts to market their communities, they need to support themselves first.  Also, the current funding environment (some win grants, others lose) furthers competition that may make it harder for some organizations to work together.
• Arts events and festivals.  Some of the larger arts events generate enormous returns on investments to their communities.  The WaterFire event in Providence, Rhode Island, attracts about 1 million visitors and  $25 million in private spending per year, according to Tom Borrup in The Creative Community Builders Handbook.  But most small festivals need to build their audiences over time to have these kinds of numbers.  The TIF can invest in these events and festivals as they build their audiences.
• Public art and street art activities.  These can help attract people to commercial areas or encourage shoppers there now to stay longer (which can generate more consumer spending.) 
• Interorganizational mergers and partnerships.  There are a number of people -- funders and even arts advocates -- who say there are too many distinct arts organizations.  The TIF can provide incentives for organizations to engage in long-term partnerships or even merge.
• Arts activities in underserved communities.  Some places -- Manhattan in New York City; Santa Fe, New Mexico; and Asheville, North Carolina -- will always get more funding because funders spend more time in these places.  The TIF could be a catalyst for arts-based economic and community development in neighborhoods and towns without large and influential arts organizations or strong advocates.

--Leonardo Vazquez, AICP/PP

Sustaining the arts and creative placemaking through tax increment financing, Part 1

It seems like everybody involved in creative placemaking is talking about funding cuts to the arts.  Well, maybe not everybody.

In Allegheny County, Pennsylvania, (which includes the city of Pittsburgh), the county's Regional Allocation District is planning to increase its allocation to arts and cultural activities by 2%.  This is thanks to a creative way of funding the arts -- through a portion of sales tax revenue.  The District gets revenues from half of a 1% sales and use tax in the county, and distributes it to arts, cultural and entertainment facilities and parks throughout the county.  Though the amount of the tax may seem insignificant to a shopper, it has translated to more than $2.3 billion since 1995. In fiscal 2011, the Regional Allocation District Board is expecting to give $81.1 million.

Colorado does something similar with its Scientific and Cultural Facilities District in the Denver metropolitan area.  This fund -- based on a tenth of a percent of sales tax -- distributes about $40 million per year to around 300 organizations in seven counties.

Sales taxes are a great way to support the arts and creative placemaking.  Governments don't even have to create new taxes to make this funding system work.  Through a process known as tax increment financing, arts and cultural organizations can get a portion of any sales taxes above a certain baseline.

Here's how it works.  Let's say in 2011, ABC County collects $100 million in sales taxes.  That $100 million is the base.  In 2012, because of an improving economy, ABC County collects $110 million in sales taxes.  That additional $10 million goes to support arts and cultural activities.  A government agency wouldn't have to wait years for the money to pile up.  It could float a bond that could be paid for by increased sales tax revenues.

Most states have tax increment financing programs (TIFs).  But, like in New Jersey -- where it is called a Revenue Allocation District -- TIFs usually go to support big development projects.  So in New Jersey, a TIF could help build a big performing arts center, but provide no funding to support its operations. This is a big problem -- not just for arts organizations that struggle to keep the lights on, but also for the municipalities and leaders who sometimes use a lot of political capital to get these big projects built.

And of course, most arts activities happen outside of big theaters and cultural centers.  Some, like public art and street art, generate no or little money.

New Jersey uses a form of tax financing. A portion of the tax that guests of hotels and motels pay goes to the New Jersey State Council on the Arts, which distributes revenues to arts organizations.  (Arts Build Communities is one of many grantees supported by this fund.)

Why should the arts be singled out for special treatment with a portion of sales tax?  Because arts and cultural activities are proven generators of economic activity. According to several economic impact reports, the arts bring people to downtowns and other places,  where they will spend $8, $10 or $20 per person on top of the ticket prices.  As you can imagine, this is good for nearby restaurants and stores (especially the smaller businesses that have little money for marketing.)   And it's also good for high-tech and information industries, such as pharmaceuticals.  They want to attract the best educated and most creative people to come up with the next product to generate billions of dollars.  And what do creative people like?  To be in places and with other people who are creative.

It's a virtuous circle: more arts activities and artists tend to generate more money for restaurants and stores.  And all of these provide a windfall benefit to companies that want to attract educated and talented employees.

That's why a hotel/motel tax is a good start, but not enough.  A portion of sales taxes from businesses that benefit from arts and cultural activities could be used to support the arts and creative placemaking.

How the money is distributed, and for what purposes, determines whether the sales taxes generate a good return on the investment.  That's the subject for the next part of this essay...

--Leonardo Vazquez, AICP/PP

To learn more:
About the Allegheny Regional Allocation District
About the Scientific & Cultural Facilities District
About the New Jersey State Council on the Arts

Arts Build Communities and the Bloustein Online Continuing Education Program offer several courses on creative placemaking, including economic development through the arts, programming cultural uses, and cultural heritage tourism planning.  Learn more about our upcoming courses.

Do you have the right personality to market through social networking?

In today's economy, being smart is not enough to get you interviews, contracts and opportunities. A lot of your competitors know many of the same things -- or more -- than you do. To stand out, you have to show that you bring a distinct quality that your clients value.

Social networking can help.

Sites such as Facebook or LinkedIn make it easy to create a place on the Internet for yourself or your organization. The hardest, and most important parts of this work are in how you establish yourself online.

Determine a persona for your site. What makes you distinct, and why would someone want to connect to you? You may want to do some competitive analysis before you start. For example, if you're smart about an unusual but valuable topic such as transfer of development rights, see if anyone else is actively writing about it in a blog or a social networking site. If they are, how could you write about it differently? (Maybe you could take a different approach to the same, or you could write from a different angle. If the other writer is casual, you could be more academic, or vice-versa)

Give that persona a personality. How do you want your readers to think of you? As the smartest person in the world on a subject? As someone who just tells it "like it is?" As edgy and not afraid to be controversial? Think about who you want to be your clients, and what kind of voice they would respond to.

If the site is for a division or organization, talk with the other members of the organization about what the shared voice of the group should be. This will make it easier for different members of the organization to contribute to the site.

Communicate early and often. Figure out things to talk about to stay on the radar screen of your readers. Don't have anything to talk about this week? Check out a news site, such as Planetizen, and offer your thoughts on what you read. If the topic is interesting enough to talk about it with a colleague, it's probably interesting enough to put on the Internet. Writing can be a lot of work, so if you're not used to writing often, try posting once a month. Then do more as your schedule allows.

--Leonardo Vazquez, AICP/PP

Tips for arguing respectfully and productively

Tips for civil disagreement

It’s unfortunate that it takes a tragedy to get so many people in the United States talking about the kind of language we use in policy and strategy arguments. Here are some tips that can help professionals engage in arguments that are more likely to be both civil and productive.


• Focus on the topic, not the person. Personal attacks rarely get the other person to change their views or behaviors. More often, they get met with other personal attacks or angry silence – neither of which helps.

• Know that the argument may be about more than the thing being argued. In a community that has been abused or ignored by previous developers, a community’s opposition to a proposed land use might be more about anger with developers than with the proposal. If an argument is generating more emotion than would seem reasonable, there’s probably more there that you need to explore.

• Do not assume you know the person’s motivation. When someone makes a personal attack, it is sometimes because that person thinks he or she knows what lies behind the other person’s objections.

• Seek to understand before seeking to be understood. Make sure you’re hearing the other person correctly. (One way is to put the person’s comments in your own language and saying something like “did I get that right?”) If you’re getting it right, but the other person isn’t, ask the person if you could clarify your remarks. (Don’t say anything like “Did you understand what I just said.” That can sound patronizing.)

• Understand the other person's logic and the reasons for their emotions. Too many professionals think that others reject their ideas because they don't understand them.  In other words, if the professional could "teach" opponents about a strategy, the opponents would agree with the planner.  The problem is sometimes the professional's education -- he or she hasn't learned enough about their audience's perspectives and mindsets.  Most reasonable people make rational decisions according to their own views of the world.

• Use a zipper strategy – find the areas of agreement and build up from there. In most communities and organizations, people want many of the same things. Talking about what they agree on can help opponents think of themselves more as collaborators than enemies, and build creative solutions that neither group thought of before.

• Acknowledge your areas of newfound agreement. You can do this formally in contracts, or informally through reminders in future conversations.

• Be confident, courageous and creative. There are times when avoiding an argument might be a good short-term strategy. But avoidance over time usually leads to frustration, and eventually more problems. Have the courage to both present your views and be willing to consider those of the other person. Be creative enough to collaborate with your opponent and see solutions that neither of you initially imagined.

• Give, and request to get, respect for your opponent's views. If you refuse to acknowledge another's views, you can not get to a point where you can understand the person.  (Hearing enough just to beat down an argument doesn't count.)  It's also important that you speak from a position of strength by asking others to understand your views.


All of the above assume that the participants are willing to listen to one another and are, for the most part, honest. Sometimes this isn’t the case. In those circumstances – and you should test your understandings to know if you’re in those circumstances – you might need to take more aggressive (but not violent) approaches. Dr. Martin Luther King Jr., whose birthday we celebrate Monday, knew there were times when a loud demonstration worked better than a quiet conversation.

--Leonardo Vazquez, AICP/PP

Catalytic leaders need to be seen to be heard

Leaders don't need to stand on soapboxes, ride white horses, or be at the front of the line to be effective.  Good leaders use the quiet conversation and strategic questions as much, or even more than, the "big speech."  But one thing all leaders need is to be present.  Or more specifically, to be visible to their audiences.  Technology makes it easier for even the busiest people to be more visible leaders.

Leaders succeed when they convince others about the value of a goal and persuade them to act on those beliefs. The most successful leaders inspire and motivate audiences to commit their time and resources to a mission.  But you have to practice what you preach.  If you're not seen as being committed and willing to put in the same time and energy that you ask of others, you will lose credibility quickly.

You may have big ideas, but they have to hear them from you.  You may be working hard on a project, but they have to see you working hard.  If you're seen as invisible or out of touch, audiences lose their motivation quickly.

Audiences also get distracted easily.  A lot of things call for the attention of our audiences.  The busier your audiences are, the less space they have on their internal radar screens.  The leader who pops up a few times a year to give a motivational speech probably shouldn't even bother.

For most of his career, Edward Blakely has been one of the busiest urban planners in the United States. He is one of the leading thinkers on local economic development, an active land developer, and has been an advisor to presidents of the United States and big city mayors.  Yet, when he was Dean of a graduate school at The New School, he made time to attend the staff birthday and going away parties. His being at these events was a symbolic gesture to demonstrate that Ed cared about the staff.  In universities, where staff are often seen as second-class citizens, this is important.

Being more visible is especially important when you're building or revitalizing a community around a mission.  According to the Tuckman Theory of Group Development, people in the beginning look to a strong central leader for direction and guidance.  This is the time when the leader needs to be most visible.  If it means holding monthly meetings where the leader is sitting with one or two people, so be it.  Over time, people are more likely to see the visibility as a sign of commitment and consistency, and will be more likely to be involved  (if the mission is right for them.)

What are the best ways to become more visible?

• Sometimes you need to hold more meetings.  We're told that "everybody hates meetings."  But what most people hate are the meetings that are seen as time-wasters.  A meeting to present what someone can read in a report is a time-waster.  A "team building" exercise for a group that is working well together is a time waster.  The more people can get what they want out of a meeting, the more they will enjoy it.  What do people want?  Depending on the person or the circumstance, it could be getting solutions to problems, the chance to be heard, knowledge on something that will affect their jobs or lives, or opportunities to build connections with other busy people.  If you're trying to motivate staff, have meetings where more time is spent on brainstorming than reporting.  If you're trying to motivate volunteers, have guest speakers or discussion topics in the same meetings where you talk about projects.
• Also hold events.  Even in the most casual places, meetings often have formalities and protocols that can make some people uncomfortable.  One way to get audiences to connect with one another -- a key to building social action -- is to hold events that are fun and relaxed.  Turn one of the weekly breakfast meetings into an afternoon coffee hour.  
• Connect to your audiences through email at least once a month. Free group software and commercial email marketing providers (PDI uses Constant Contact) make it easier for you to stay connected with your audiences.  You don't need to be inspiring every time.  You can write about something in the news, and how it connects to your mission.  You can give kudos to someone who has gone above and beyond.  As long as what you write connects to the mission and values of your group, feel free to be creative.
• Try social networking. Blogs and social networking sites like Facebook and LinkedIn aren't just for narcissists and pundits.  They are a great way for people who are separated by time and distance to connect to one another.  When it is impractical for community members to be together in person often, social networking sites can help to hold a community together.

--Leonardo  Vazquez, AICP/PP

Would you like to build your leadership skills?  Become a Leading from the Middle Fellow.  Learn more here.