Considering the Arts for Their Economic Benefits

SAN ANGELO — Just south of the river that runs through this West Texas city, Howard Taylor stood in front of a row of brightly painted buildings on a leafy brick sidewalk that will soon be dotted with streetlamps.

“Two years ago, people wouldn’t come near this area,” said Taylor, the director of the city’s Museum of Fine Arts. “They thought it was run-down, scary and unpleasant.”

The refurbished block is merely a hint of Taylor’s vision for the city’s 200-acre cultural district, a designation granted by the Texas Commission on the Arts in 2009. Taylor, the district’s chairman, has ambitious plans to transform the area, which already includes historic Fort Concho and a growing number of art galleries, but is also home to several abandoned buildings he would like to see restored.

These aspirations take money — by Taylor’s estimates, some $41 million. And while the cultural district designation has been a nice stamp of approval — Taylor refers to it as the “connecting tissue” of the revitalization effort — it has come with no financing or access to state economic development incentives.

“It is this absolute gem of potential,” he said, “and we’re beginning to forget the potential it has.”

That could change in the state legislative session that begins in January. An aggressive effort is afoot to reframe the Texas Commission on the Arts as an engine for economic development, and to give Texas’ designated cultural districts access to existing state incentive funds.

But convincing state lawmakers to invest in the arts has proved challenging with the tight budgets of recent years. Last session, they slashed the commission’s budget by 56 percent, down to $3.7 million for the 2012 fiscal year.

“We’re being underutilized,” said Gary Gibbs, the commission’s executive director. “We have great potential to benefit the state, and with more resources, we would be in a much better position to fulfill our mission and benefit all people of Texas.”

A recent report issued by the Sunset Advisory Commission, which gauges the effectiveness of state agencies, supports that notion. It gave the arts agency high marks and recommended that lawmakers continue to support it, in part because of its stimulation of the economy.

A recent statewide study by economic analysis firm TXP Inc. found that in 2011, arts and culture industries generated roughly $290.1 million in state sales tax revenue, an impact that has grown by more than 12 percent over the last decade.

“What we’re looking at now is institutionalizing the arts as a tool for economic development for the state of Texas,” said Amy Barbee, the executive director of the Texas Cultural Trust, a nonprofit organization that raises and manages money for the arts commission. “The cultural districts can be a vehicle for that.”

Texas is one of 12 states that play a formal role in establishing local cultural districts. The Legislature authorized the program in 2005, though no districts were designated until 2009, when an inaugural group that included San Angelo received the distinction.

So far, out of 27 communities that have completed applications for cultural district designation, 14 have been successful. Five other pre-established districts, including the Dallas Arts District and the Houston Museum District, were grandfathered in without going through the rigorous application process.

Though the cultural district designation does not come with any direct financial benefits, acceptance into the program provides a legitimacy that can be a boon to a community’s efforts to market itself and secure outside financing. “When you have this designation, it has significant meaning,” said Martha J. Terrill, who led a group that successfully secured cultural district status for a section of Galveston this year. “Texas is not the only place you can get funding.”

But Barbee said there is existing state incentive money that could be leveraged by cultural districts as part of Texas’ broader economic development strategy. She suggested that cultural districts be invited to seek financing from the state agriculture department’s rural economic development program, for example, or from the economic development and tourism programs operated by the governor’s office.

A collaboration between the Cultural Trust and the state agriculture department — one that will focus on rural economic development and may include communities designated as cultural districts — is already under way. The agency and the organization are seeking a community for their pilot project.

“We hope to increase tourism, attract new capital investment, create new job opportunities and bring attention to the cultural assets of rural communities,” said Bryan Black, a spokesman for the agriculture department.

Barbee said she would like lawmakers to expand the approved uses for certain local sales tax dollars to include arts facilities.

Carlton Schwab, the president and chief executive of the Texas Economic Development Council, said his organization supports directing some sales tax revenue to arts activities. “We certainly consider that economic development,” he said.

Ryan Stubbs, research director at the National Assembly of State Arts Agencies in Washington, said states are increasingly setting up cultural district designation programs without attaching fiscal incentives. But he said states that have included financing, like New Mexico and Louisiana, are clearly benefiting from the investment.

Catherine Frazier, a spokeswoman for Gov. Rick Perry, said the governor is pleased with the state’s current economic development strategy but would consider re-evaluating how the arts are financed in Texas if it is the will of the Legislature.

In San Angelo, Taylor would welcome any help his cultural district can get. He envisions several museums, restaurants and businesses, vocational training programs in boot and saddle making and — perhaps most important — a pedestrian-friendly community that is valued by its residents as well as its visitors.

“To me, that’s what a cultural district is about,” Taylor said. “It’s not about culture with a capital C. It’s about how we live together and how there’s a real sense of everybody belonging and sharing in this.”

Rick Weise, San Angelo’s assistant city manager and the district’s co-chairman, agreed that it would aid the city’s efforts to attract business. “A lot of economic development is your relationship with whoever you’re trying to bring in,” he said. “But secondly it’s, what do they see and do they like that?”

Despite some successful projects, there is still much to be accomplished, and Taylor knows it. Right now, he said, he is still working to get the basics.

“If you drive around, you don’t know it’s fabulous,” he said. “There’s virtually no signage. It looks a little bit like a dump. There’s nothing to tell you you’re in a place that’s unique.”