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Putting the “creative” in creative districts

Neil McKenzie //October 10, 2012//

Putting the “creative” in creative districts

Neil McKenzie //October 10, 2012//

A creative district is an area where there is a critical mass of creative talent, one that creates a sense of place that is attractive to other businesses including those that might not necessarily be labeled creative.  Typically, these districts are found in lesser-developed and many times less desirable areas of a city or town.

Today, many towns and municipalities have efforts to grow their creative areas and in many instances to build them from scratch by attracting creative businesses.  The growth of many creative districts has been the result of creative professionals being priced out of other areas and somehow finding themselves in close proximity.  This could be a particular part of a town or many times an area a bit further down the road from a larger or more economically viable area.

The process is typically slow and seems to take off when a critical mass is reached.  At this point a “sense of place” begins to be noticed and the creative district becomes a place where people want to be – an area that is vibrant and more often than not, socially diverse.  Other businesses and residential developments begin to move into the area. 

As the growth accelerates, rents and property values begin to rise and eventually many of the artists/creative people who initially transformed the area are priced out.  As the area grows, it may or may not keep its sense of place as a creative or artistic hub and becomes what has been characterized as being “gentrified”.

The process of building a creative district is not unlike other experiences in economic development.  For example, a car dealer may move to the outskirts of town because the land is more affordable and taxes are lower.  Soon other car dealers locate nearby and before you know it you have a street lined with car dealers.

At some point in time, the “outskirts” where the car dealers located are no longer at the edge of town but right in the middle of a well-developed area.  Property values and taxes begin to rise and the highest use for such property is not a parking lot for new cars.  The car dealer sells this land at a profit and moves to another area at the new outskirts of town and the process begins again.

Owning real estate is a key component in the business model for many types of business both large and small.  For many small businesses, real estate may become the largest asset on their balance sheet as well as the major source of the owner’s retirement.  As the business gains equity in the property through appreciation or paying down their loan, the real estate can also become an important asset to borrow on to fund future growth and expansion.

Artists and many other small creative businesses seem to have missed the boat concerning profiting from the creative areas which they have helped to build.  Some of the reasons that artists not taking advantage of the opportunity to build equity and participate in the creative district’s long-term growth are:

  • A general lack general business knowledge and financial acumen
  • Poor or nonexistent long term planning especially with regard to retirement and an exit strategy
  • Little or no credit and insufficient funds for a down payment on a property
  • Lack of access to startup capital and other sources of financing

Today, many private and public funds are going into developing our creative districts.  These districts as well as the artists themselves need to develop long-term solutions to keep the creative people in the area.  A few interesting models such as coops and live workspaces are starting to be integrated into creative district development but clearly more needs to be done.  This is a chance for the public and private sector to develop new “creative” solutions. 

As we build our creative districts, we should try to develop a formula where the artists who created it can share in the success and appreciation of the area.  It is up to the individual artists to get the necessary skills and financial backing to make this a reality.  It is up to the creative districts to make this a high priority and look for creative solutions to keeping the creative in creative districts.  In the end, it will be up to the market to determine the success of creative enterprise as well as the success of a creative district but clearly more can and should be done.

I’m interested to hear about your ideas or examples of how we can keep the creative in our creative districts.