f. Arts & Culture

San Francisco’s Core Strength: The Cultural Economy

One of San Francisco’s “competitive advantages” is that it is a city with a rich artistic and creative tradition, coming from its diversity of communities and cultures. San Fracnisco’s creative and cultural economy is credited with San Francisco’s (and the Bay Area’s) ability to attract other growth sectors, such as the so-called “experience” and “knowledge” industries, but little is done to really strengthen the infrastructure of San Francisco’s creative and cultural workers. Arts organizations employ about 7,800 people, with another 5,200 people employed through the off-site spending related to arts activities.[i] An economic development priority should be to promote cultural and artistic economic activity, but not just at its end-product stage (as tourism “attraction”), but at its root as business and workforce development.

We see the arts, culture, and creative industries as an integral part of San Francisco’s economy. An arts component of a progressive economic development agenda require comprehensive City policies that address the arts as a driver of economic and workforce development, with the goal of integrating existing San Francisco residents, especially economically vulnerable populations from the south and east of San Francisco, into an equitable “creative” economy.

This discussion partly builds from the San Francisco Arts Task Force report (2006), and further discussions with task force chair and vice-chair Debra Walker and Tony Kelly. Most of the Arts Task Forces recommendations have NOT been implemented, and could in themselves be the current platform. Much of what is presented here simply highlights certain items from the Task Force recommendations as they came up in our discussions. The first proposal is for a consolidation of the city’s various arts programs into one city department with economic and workforce development in the arts as its central mandate. The following several proposals refer to revenue sources. The last several proposals outline some of the programs that might be prioritized by a new cultural economic development department.

1. Consolidate the City’s arts programs into a Cultural Economic Development Department

Currently the Arts Commission and Grants for the Arts, as well as other arts-related agencies such as the War Memorial Building and the Visitors and Convention Bureau operate essentially independently of each other, despite having overlapping goals. The SF Arts Commission is meant to support and provide access for artists in San Francisco. The Grants for the Arts (GFTA), also known as the hotel tax fund, generally supports large-scale arts institutions in the city such as the symphony, opera, and ballet. San Francisco invests approximately $48.4 million annually in the arts, of which nearly $28 million is allocated to a few agencies (the War Memorial, Asian Arts Museum, Fine Arts Museums, Yerba Buena), leaving about $20 million which is distributed to organizations and individual artists.[ii] With each year of budget cuts, of course, this funding becomes tighter and tighter. A mandate for seeing the arts as a basic economic development driver for San Francisco suggests that the various arts entities should be consolidated within a new city department, similar to Philadelphia’s new Department of the Creative Economy, with a clear mandate of building economic development on the city’s strengths and competitive advantage.

Consolidating these various entities will bring more economies of scale, negotiating power for arts resources; and make it easier for artists seeking support. This new program would give priority to community and cultural equity arts programs, based on need and economic multipliers within vulnerable communities. The programs outlined below suggest some of the ways this new department could operate.

2. Increase the Hotel Tax, with dedicated arts funding

The current hotel tax structure taxes hotel room occupancy at 14%. Traditionally, about 8% of this tax was allocated to the arts and 6% was allocated to the General Fund. Nonetheless, because the hotel tax was not a voter mandate, the allocation was never a requirement attached to the tax. Over the last few years, a greater amount of the tax has gone to fill gaps in the General Fund, leaving less for the arts. A proposal has been floating that hotels might agree to support a voter initiative for a 2% increase in tax, making their tax rate 16%, if they were assured that at least half of the tax would be mandated for the arts. The hotel industry sees it to their benefit to maintain strong support for the arts, as tourists are influenced to come and experience the arts culture of San Francisco. Hotel tax initiatives have been well-supported by voters in the last round of elections in city’s throughout the Bay Area. (see also section on Revenues)

3. Dedicate “percent for the arts” funding in Downtown and Eastern Neighborhoods development to community-based public art

Currently private developers in the downtown area (C-3-0 zoning districts) are required to spend 1% of construction costs towards onsite public art projects (Federally-funded public projects are required to designate 2% towards art). Many of these art projects are not very publicly accessible, and don’t always contribute to local cultural economic development. This proposal includes expanding the percent for the arts program to cover private developments above a certain size throughout the City’s south and eastern neighborhoods, not just the downtown areas. It would also add a local workforce development component, giving priority either to locally-based artists or, more-importantly, locally-based fabricators. Finally, we propose that the percent for the arts monies be pooled so that that they can be used in significant public projects in the immediate vicinity of the development sites. This can further leverage other support from the City or collaboration among private and public projects. Finally, while these projects are typically permanent installations, this program could encourage collaborations among the creators of the physical arts pieces and, for example, neighborhood-based festivals or annual events, strengthening the rooting of the development in the existing community it is locating in.

4. Invest in a creative spaces loan fund

Elsewhere, we speak more to the idea of creating a San Francisco municipal bank or credit union. Here we speak to using such a mechanism to develop a capitalized loan fund for developing creative spaces, leveraging, for example, existing programs such as the Creative Space Fund. Reinvesting the City’s working money into the development on arts spaces, on favorable terms, would be a much more socially-responsible direction for allocating the city’s investments than merely putting them into Bank of America. The city’s neighborhood cultural centers, for example, are in critical need for upgrades, in terms of technology, HVAC, and accessibility, and could clearly use such a program.

5. Provide space support through rent subsidies

Implement a City policy that supports arts organizations with project-specific rent subsidies. Rent subsidies will be used to pay rent for arts fabrication, rehearsals, performing events, etc. This will allow art organizations that cannot afford a permanent space to continue in their creative activities for the benefit of the City.

6. Create a municipal cultural works program

Much of the city’s arts infrastructure was originally built through Federal works programs, such as the WPA and CETA. San Francisco’s cultural centers and neighborhood arts programs were a direct outcome of the Federal CETA program that employed artists to work in their communities. As unemployment rises in the city, the idea of local works program becomes more viable. Similar to the Mayor’s new Jobs Now program, city-funded stipends for art workers, targeted for unemployed and underemployed artists under certain income levels, could support projects such as public sculptures, paintings, murals, the revitalization of alley ways, art for community centers and parks. Arts organizing and management, as well as outreach work for neighborhood arts promotion, could be similarly supported. Like the WPA arts, writers, and theater programs, this would employ talent in a constructive way, including young artists in the beautification of the city, creating a sense of ownership and pride as a representation of San Francisco. At the Federal level, our representatives should be lobbying for stimulus monies specifically targeted to works programs that fund cultural workers, based on the models created by the WPA’s artists programs in the 30s and the CETA programs in the 70s.

7.   Focus arts funding on San Francisco’s Neighborhood-based Cultural Economy

The San Francisco Convention and Visitors Bureau is tasked with promoting the arts in San Francisco to tourists and visitors, but typically prioritizes the larger mainstream attractions. Arts promotion should focus on the city’s existing richness in its neighborhood-based cultural economic activity.[iii] Chinatown is an example of a neighborhood that has a vibrant internal culturally-specific economic activity, is also externally rich in bringing in outside dollars without entirely remaking the neighborhood as a tourist spectacle, and has maintained its people and culture without becoming gentrified (with pluses and minuses, ie, crowded conditions, etc.).

An economic development plan being developed by Chinatown residents and merchants begins with the following vision, which can serve as a model for the kinds of economic development San Francisco’s communities want to see: “economic development programs and strategies should serve to build community relationships, promote locally-owned retail, and support cultural institutions, all the while bringing more investment to the neighborhood.” Neighborhood commercial districts attract thousands of visitors annually and are essential to the commercial life and vitality of communities. Despite the strength and vibrancy of their local-serving economies, the communities of the city’s Eastern Neighborhoods, mostly communities of color, face a number of barriers: low income, people living at or below poverty, seniors who are aging in place, linguistic isolation, higher unemployment rates and not in the labor force. Neighborhood commercial businesses have experienced decreasing retail sales, especially since the beginning of the Great Recession. In addition, a lack of access to capital for small businesses, a decline in city services, and job loss are negatively impacting the local neighborhood economies. Neighborhood economic development projects need to identify ways to complement the existing commercial districts by developing a new vision of economic development, one that builds on the unique histories and cultural traditions of each community.

A cultural equity approach would prioritize cultural districts that are commonly overlooked by the hotels and tourist bureau, and which support working artists from across the city. The bureau could support art walks, and shuttles, promoting non traditional routes of art that are jewels of the city, from the Mission to Potrero to the Bayview. Visitors to neighborhood cultural districts contribute to the sustainability of the adjacent neighborhood commercial streets and nearby backstreets businesses that support the arts industry. The bureau could incentivize visitors to cultural districts through, for example, an arts “Fast-Pass” or a San Francisco Art Dollars program, to promote money being recirculated in the city’s local economy and in particular in the city’s neighborhoods. The Art Dollars could be subsidized: for example, $150 Art Dollars could be purchased for $100 U.S. dollars, which could be spent through participating arts organizations and expanded to adjacent retail areas.

8.   Support basic healthcare for cultural workers

Many artists operate as independent contractors, often uninsured, and many arts organizations and agencies depend on these artist-contractors. The city should strive to enroll artists that are uninsured through the city’s Healthy San Francisco health care plan, or some other system (a pooled health plan?) that ensures a healthy arts workforce.

9.   Develop workforce training programs for cultural work

While it’s important to develop a strong workforce training curriculum relating to emerging economies, such as the so-called “green economy,” it is important to develop workforce for the existing strengths that San Francisco already has. Our community colleges, as well as other independent agencies are the perfect vehicle for this.[iv] However, it requires an understanding of the needs in the arts industries, and expanding the definition of workforce to include not just the artists themselves, but also the organizational, management, business and entrepreneurial aspects of the arts. An essential aspect of the new department of cultural economic development would be pulling together those networks of arts organizations and businesses to better develop workforce training and to connect them to a trained workforce. We need programs that train and cultivate artists and related backstreets industries in San Francisco, from the sculptor to the metal fabricator, from the actor to the scenic painter.[v]

10. Support culturally-based traditional arts industries

As a cosmopolitan city, San Francisco’s cultural richness is a vital source of economic development: from fortune-cookies in Chinatown to panaderias in the Mission, from parol-lanterns in SOMA to Samoan fabrics to Native California basket-weaving, each culture brings its own customs and economic activities into the city. A cultural economic development agenda would not only support these existing activities, but help them to thrive, by supporting new value-added enterprises and finding and promoting new markets.[vi] The community colleges could be building workforce development curriculum based on existing culturally-based arts and artisan activities. Stipended internship programs could be develop to link artisans and industry with community college and other workforce programs.

11. Develop arts industry incubators

Like many other businesses, access to affordable and stable space is a key concern for artists and arts organizations. The city should prioritize the development of affordable arts incubation spaces, particularly in the southeast sector industrial areas, where failed  dot-coms and other businesses have left behind vacant buildings and storefronts. While new market-rate “boutique” incubators have started to appear (such as the “artspace” in the North Mission renting small industrial spaces for over $3/s.f.), a real incubator facility might include some admin services on-site, and onsite technical assistance, business planning and marketing, and perhaps small business loans or peer lending groups.[vii]


[i] California Arts Council, “The Arts: A Competitive Advantage for California II,” 2004, http://www.cac.ca.gov/artsinfo/econ.php.

[ii] San Francisco Arts Task Force, 2006.

[iii] University of Pennsylvania’s “Social Impact of the Arts Project” looks in-depth at the neighborhood-based creative economy: http://www.ssw.upenn.edu/SIAP/.

[iv] See “The Art of Economic Development: Community Colleges for Creative Economies,” http://www.rtsinc.org/publications/pdf/art_ecdev.pdf.

[v] A potential case-study is the Oregon Creative Services Alliance.

[vi] The Manchester Craftsmen’s Guild in Pittsburgh is perhaps the most famous example of this approach: http://www.manchesterguild.org/indexflash.htm.

[vii] An example could be the “HandMade in America” incubator for glass and ceramic crafts in North Carolina, or, on a larger scale, the GreenPoint Manufacturing and Design Center in New York, http://www.gmdconline.org/about/.

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