Cities are banking on the arts

Once the first thing to be cut in a time of recession, the arts are proving their worth.

"It's necessary to invest in our cultural organizations in tough economic times," New York Mayor Michael Bloomberg said at a recent opening of a new nonprofit theater. "Make that especially in tough economic times." No wonder, since one-half of 50.5 million tourists in 2011 claimed they came to enjoy the city's cultural attractions, boosting the local economy by $32 billion.

It's not just recognized cultural hubs touting the value of the arts. Communities as diverse as Paducah, Ky.; Park City, Utah; and Buffalo, N.Y., consider the arts no longer in need of a handout but the go-to source of a hand up. What began as a murmur is becoming a roar.

Partly responsible for this shift is Richard Florida's 2002 book "The Rise of the Creative Class." "Richard Florida has had an impact on every city in the world," says Elaine Mariner, executive director of Colorado Creative Industries, a state economic-development entity. Banking on the arts, the book states, pays off like compound interest.

The new paradigm shows how artists moving into a distressed area (like New York City's SoHo in the 1960s) transforms a sinkhole into a boomlet. First, hipsters in fedoras make it a happening place. Then techies, entrepreneurs, affluent residents, and tourists flock in. Restaurants, galleries, shops, and upscale amenities sprout, bringing jobs, tax dollars, and cachet.

"The bottom line is economic development, isn't it?" asks Sharr Prohaska, associate professor at New York University's Tisch Center for Hospitality, Tourism, and Sports Management. "Anything in the arts will bring visitors," she says, "but it's also for the people who live there every day. It's a win-win for the community."

Towns and cities across the United States – throughout the world, really – are investing in the arts both to attract deep-pocket cultural tourists and to improve quality of life. Paducah is a model others hope to emulate. In 2000 a blighted, 30-block swath of crumbling housing was "at a turning point," says Mark Barone, a painter who conceived the rescue plan. "Either it was going into the abyss or they'd try to bring it back." He persuaded officials to offer artists incentives (like derelict Victorian houses for $1) to relocate. Now more than 100 artist-residents make the town of 27,000 a tourist magnet.

"It completely changed the dynamic," says Mr. Barone, president of Art­smArt-­cities. "The city commissioners didn't understand the arts that well, but they understood the results. It's a cash cow."

Park City's problem: the off-season

Park City had a different problem. Packed with skiers in winter and movie-industry folk during January's Sundance Film Festival, how could it distinguish itself from other resorts? And how could it fill those condos and restaurants in the off-season?

"Arts and culture is coming into its own as a major factor for tourism," says Kathy Hunter, executive director of Park City Summit County Arts Council. With nonstop cultural offerings from June to September, such as the Deer Valley Music Festival and the huge Kimball Arts Festival on Main Street, "an increase in summer tourism is what's sustaining everything right now and, in fact, growing it," Ms. Hunter says. In 2010, the town of 8,000 attracted more than 1 million arts-and-culture visitors who contributed $109 million in economic stimulus.

Denver has also changed its image from a destination for puffy-parka people to espresso-sipping sophisticates. Gov. John Hickenlooper (formerly Denver's mayor and now governor of Colorado) made promoting arts a major focus. Aided by a bond issue and a dedicated sales tax that residents overwhelmingly renewed until 2018, the city built the striking Daniel Libeskind-designed addition to the Denver Art Museum and spruced up a now-bustling downtown arts district, home to a new Clyfford Still Museum.

"Colorado has always been known for its outdoor sports like skiing, hiking, and biking," says Andrea Fulton, director of communications at the Denver Art Museum. "As the baby boomer generation starts to age, they can't do those things five days in a row. They're looking for other activities during their visit, like arts and culture."

"We're expanding the branding," Ms. Mar­i­ner says of Colorado's new focus. Besides sports, recreation, and natural beauty, she says, "what we have to emphasize is we're a magnet for creatives." Not that there's a quick fix. Attracting both tourists and innovators to populate a burgeoning arts scene is tricky, she says, "Can you capture lightning in a bottle?"

Miami succeeded big-time. Since 2000, when Miami Beach began hosting the annual, contemporary fine-art fair Art Basel, the city changed from a provincial bit player to a World Capital of Cool. For one week every December, collectors, artists, dealers, curators, and art aficionados from around the globe mob the city – a record 50,000 in 2011. And these are big-spending visitors, whose estimated $500 million in direct economic impact powered the city from recession to reinvention.

New Orleans, still struggling after the double whammy of hurricane Katrina and the BP oil spill, tried for a similar heroic comeback vibe. Hoping to make art as big a draw as music, it mounted ambitious exhibitions of international artists at Prospect.1 Biennial in 2008-09 and a sequel, Prospect.2, that closed in January. But for a city stereotyped as Party Central that attracts more carousers than connoisseurs, it's a hard sell.

The first version brought 42,000 visitors over three months but ended up $1 million in debt. The second, greatly scaled back, was sparsely attended, even though Terry Fassburg, a New York collector and regular at international art fairs, pronounced it "way more fun than Venice." No silver bullet, art is seen "primarily as something that needs to be supported by public coffers but which doesn't add anything to public coffers," says Dan Cameron, Prospect's founder, who raised funding privately and is now chief curator at the Orange County Museum of Art in California.

Buffalo studies others' success

Buffalo took a methodical approach. After studying British cities like Glasgow, New­castle, and Liverpool – regenerated as destinations for hip tourists – Buffalo launched a new branding campaign in 2011: "Buffalo. For Real."

Its current reality is a blue-collar, industrial city that has lost half its population since 1950. All the more reason to emphasize its legacy of cultural heavyweights: a park designed by Frederick Law Olmsted, one of the finest modern-art museums (the Albright-Knox Art Gallery), and architecture by the likes of Frank Lloyd Wright. In the past decade, the city invested more than $100 million to polish, package, and promote such gems, part of a vision to "gild the smokestacks" and entice cultural tourists.

More than gaining tourist dollars, "ultimately, the goal is to turn Buffalo's image around," says Ed Healy, vice president for marketing of Visit Buffalo Niagara. He hopes the new identity will make it easier to recruit top executive talent to companies and lure new businesses. "We're telling a very different story," Mr. Healy explains. "People may come with a certain degree of skepticism, but they leave extremely impressed."

Cincinnati, too, sees the arts as vital to attract and retain professional talent. With in-demand creative people so mobile these days and lacking mountains or a coast, "Quality of place is more and more a determinant," says Mary McCullough-Hudson, president and chief executive officer of ArtsWave, a nonprofit arts advocacy group. "A defining, distinguishing feature of Cincinnati is the breadth, depth, and quality of the arts and cultural offerings," she says.

Her organization is collecting evidence of beneficial social outcomes, like safety and crime reduction, derived from cultural activities. Not only does participating in arts activities help ethnic groups understand each other and boost at-risk youths' confidence and academic performance, but vibrant street life also deters crime.

Lacking hard data, the arts have been at a disadvantage in justifying support. By documenting their contributions to community priorities, "I'm hellbent," Ms. McCullough-Hudson says, "on getting the arts out of the 'nice' column and into the 'necessary' column."

For every $1 investment, $51 return

ArtServe Michigan (a nonprofit advocacy organization for the arts) has just released a Creative State Michigan report demonstrating benefits for the hard-pressed state. A 2009 database of reports from 211 arts-and-culture, nonprofit organizations shows that for each $1 the state spends on arts and culture, an amazing $51 goes back into the state economy. "A lot of eyeballs have popped," says Jennifer Goulet, president and CEO of ArtServe. "We've always known it had significant economic impact, but we've never had good data to prove it."

Pointing out the competing demands for funding in a recession, she says, "We can finally put a compelling number on why arts and culture are just as important as making sure we have good roads and good schools."

Arts advocates are quick to insist culture shouldn't be seen as a strictly utilitarian fix for budget-challenged cities or a tactic to revitalize decaying downtowns. Painting a picture has intrinsic as well as financial virtues. Beauty, delight, and helping people understand the human condition are immaterial but real rewards, they say. The arts also provoke people to think critically, a necessity for a democracy but one that still ignites culture wars.

In a time of belt-tightening, the arts are often the first item cut, seen as elitist. The nonprofit advocacy group Americans for the Arts sees its mission as educating legislators in the value of the arts. A 2005 study cited $166.2 billion in economic impact from nonprofit arts industries.

"It's a good business strategy to invest in the arts," says Robert Lynch, CEO of the Washington, D.C.-based organization. "Support for the arts from government has massive returns, not only in jobs and economic impact, but in tax dollars to the federal, state, and local coffers."

But, Mr. Lynch adds, "The main benefits of the arts are better thinking, better child, better town, better nation, better democracy, better world." Although some focus on practical issues more than intangible enrichment, "the beauty of supporting the arts is that you get both."