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The Rise and Fall of Mid-Market’s Art Center

photo of 950 Market St.

After years of planning a center for the arts at Market and Turk streets, Group i pulled out in favor of a hotel/housing development, citing lack of financial incentives offered by the city.
(photos: Ted Andersen)

By Ryan Bergmann

A years-long collaboration between nonprofits, city officials and philanthropic groups to bring a community-based arts and education center to Mid-Market effectively came to an end earlier this year.

The 950 Center for Art and Education, originally designed as part of a larger mixed-use hotel and residential complex on the corner of Market and Turk streets, would have provided affordable performance space to local theater and arts groups, many which are being displaced by surging commercial real estate prices. It would also have housed new educational facilities and office space for the American Conservatory Theatre (ACT), which bought the nearby Strand Theatre in 2012.

Nonprofit art and education groups have been calling on the city for years to create a Mid-Market special use district to relax the planning code and motivate developers to incorporate arts space in their projects. Such a district would loosen building height and density restrictions for projects that include an arts component, allowing the developer to generate more value from the land.

Even though special use legislation has yet to be introduced, it would have been in place for Group i—the site developer and owner of the 950-974 Market St. parcels—according to Emily Lesk, project manager for the Mayor’s Office of Economic and Workforce Development (OEWD).

“The arts space density program is still moving forward, but Group i has informed us that they have decided not to take advantage of it,” Lesk said.

Instead, Group i informed the city in February that it will move forward with a smaller project without the arts component. ACT had committed $14 million for their education facilities, but the density bonus offered to Group i did not generate enough value for them to cover the entire cost of the remaining space.

Without the funding in place to cover the gap, the community arts center is now without a home.

One of the theater companies that had been planning to share the performance space at the 950 Center was the Lorraine-Hansberry Theatre, which has been without a permanent home since 2007.

“There is a performance space problem for small to medium size theaters,” said Steven Anthony Jones, the artistic director of The Lorraine-Hansberry Theatre. “If you’re not able to perform at a 1,000-seat space like ACT’s theater, or if you’re not able to build your own theater like Berkeley Rep, and you need a space that’s maybe 150 seats, there aren’t many venue options.”

Jones will continue to look for a permanent small performance venue in San Francisco, but if that proves untenable he said he would expand his search outside of the city.

photo of 950 Market St.The idea of the 950 Center began with the North of Market Neighborhood Improvement Corporation (NOMNIC), a nonprofit founded in 1999 with the mission of stimulating community and economic development in the Tenderloin. Back then, the neighborhood was looking for ways to improve quality of life and decided sidewalk cleaning was necessary in doing so. In response, NOMNIC was created to operate the Tenderloin Sidewalk Improvement Project—a cleaning effort supported by both city dollars and voluntary property owner contributions.

NOMNIC ran the program for six years and then looked for a more sustainable model. In 2005 they led a drive to create the Tenderloin Community Benefit District (TLCBD), which was approved by neighborhood property owners. The cleaning program was then absorbed by the CBD, providing it with a stable and consistent funding stream.

“It was a major accomplishment, and it served not only to create sustainable sidewalk cleanliness, but to begin to form some neighborhood identity and pride,” said Terrance Alan, a NOMNIC board member and Tenderloin property owner.

After handing off its program, NOMNIC began to look for its next project. They applied for a community outreach grant and were successfully awarded a small sum of money to conduct a study exploring the economic development needs of the Tenderloin. A key finding of their research was that the most effective way a small nonprofit like NOMNIC could impact the neighborhood was through art, arts education and the performing arts. The study concluded that arts can contribute to the revitalization of communities by bringing people together and can serve as a bridge that builds civic fabric and improves the climate for local businesses.

As a result, NOMNIC’s next project became stimulating the arts in the Tenderloin. Hiring Executive Producer Elvin Padilla, they eventually landed on the concept of building a community arts center that would serve as a creative hub and a point of pride for the neighborhood.

“All our projects are pretty big—we like to refer to them as game-changers,” Alan said. “And once the board decides on a project we throw 125 percent into it.”

Around the same time Padilla was hired, then-Mayor Gavin Newsom tapped his office to lead a Mid-Market revitalization effort to solve the disinvestment in the long-depressed stretch of the city’s grand boulevard. The area was plagued by high vacancy rates in commercial real estate and populated with large buildings that had been sitting empty for years. They landed on a strategy to build off existing community assets and leverage them to spur an economic revitalization of the neighborhood.

“Arts organizations were one of those assets, so we began looking for opportunities to expand the arts district in the area,” said Amy Cohen, OEWD’s director of Neighborhood Program Development.

With the new strategy to remake Mid-Market as a cultural and entertainment district, the idea of building a community arts center was a good fit. But now that 950 isn’t a viable option, NOMNIC has gone back to the position of advocating at City Hall for special-use legislation, hoping to craft something that would provide real incentives to developers that include arts and education space in their projects. They haven’t completely given up hope on building an arts and education center for the Tenderloin, but with each passing day, a revival of the 950 Center for Art and Education is increasingly unlikely.

“If new word of our big dream attracts a philanthropic heart and soul that says $30 million dollars is an affordable goal for such lofty outcomes, then maybe the 950 arts center can get built,” Alan said. “I’m sure there are many who can raise that amongst friends and business associates in the tech community. Imagine what a gift this would be to Mid-Market and the children in the Tenderloin. If we find a special person it might just jump start 950 again and if not, there is a lot of potential for art within every new project. ”

Padilla was involved with the predevelopment work from start to finish. When NOMNIC handed it off in the spring of 2013 to the San Francisco Foundation, and shortly thereafter when it was taken over by the 950 Arts & Education Center nonprofit, he stayed on board as a consultant. Padilla said he strongly doubts the city’s commitment in making the arts facility work at 950, citing the lack of special-use legislation that provided sufficient economic tools for developers to close the financial gap they would accrue in building it.

“Also, I strongly doubt the city’s commitment to make a new arts facility work on any site along Mid-Market,” he said. “They may point to the Strand, but that’s 100 percent ACT money.”

Padilla said that OEWD made it clear from the beginning that the city would not contribute any funds to the project, nor would they waive any impact fees, reinvest any taxes, or create an Infrastructure Financing District (IFD), despite the request from over 20 community organizations and Mayor Ed Lee’s pledge before an assembly of local arts, philanthropy and community development stakeholders to support one.

Padilla said he believes that what they put on the table thus far asked too much from Group i without giving enough height and density value in return to shoulder the entire cost of an arts component. In the fall of 2013, Keyser Marston—a real estate economics analysis firm—produced a report for OEWD assessing potential art incentives options that validated that claim.

In late 2014, according to Padilla, after two years of planning and design work, the city’s representatives on the 950 board insisted on the Millennium Partners / Mexican Museum Condominium and the St. Regis Hotel / Museum of the African Diaspora —both luxury skyscrapers of over 40 stories with cultural facilities added on—as reference models for 950. “Let the uber-luxury development pay for the arts,” Padilla said.

Padilla added that the mayor’s development director insisted that Group i work with these representatives and demanded that they not fundraise on behalf of the Center, arguing that Group i would be attracting limited philanthropic dollars away from other capital campaign efforts. He said that this formula became the deciding factor in the project’s demise.

“I wish they could have told us that two years ago,” Padilla said. “Then we could have all said, ‘A super high-end luxury project in the Tenderloin? That’s really not what we’re looking for.’” He added that Group i was planning on a mixed-income housing and moderate-price-point hotel as part of the entire mixed-use project.

Despite the collapse of the 950 Center, notable progress has been made stabilizing and expanding the Mid-Market art community. In 2010, as OEWD was beginning its initiative to revitalize the neighborhood, they began looking for strategic partners that could help. One of them was the Northern California Community Loan Fund (NCCLF), which was brought on board to provide commercial real estate consulting services.

“What the city is great at is matching expertise to need,” said Leiasa Beckham, a senior real estate consultant at NCCLF.

With funding from the Kenneth Rainin Foundation and San Francisco Grants for the Arts, Beckham and her team put together the Community Arts Stabilization Trust (CAST) to support and finance nonprofit ownership of community arts facilities in Mid-Market. In the past four years their collective efforts have assisted 15 arts organizations with retention, expansion or new venue selection in the area, including CounterPULSE, The Luggage Store and Women’s Audio Mission.

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