Magical/Market Thinking: Reflecting on the Rise and Fall of Artscape

On August 29, 2023, the Globe and Mail published an article headlined “Toronto’s cash-strapped Artscape to enter receivership, end management of 14 artist facilities.” Because I’d recently spent two of the most anxiety-inducing years of my life as the executive director of BC Artscape, an “affiliate” of the Toronto-based organization, I was forwarded this article about one of Canada’s largest cultural-space providers no fewer than five times. And because my trial at the helm of this organization consisted of untangling funding conundrums and operational shortfalls, the distressing news from Toronto left me wholly unsurprised.

In 2014 the City of Vancouver imported Toronto Artscape in an attempt to alleviate its own growing cultural-space crisis. The city’s cultural community had been wary of this Toronto behemoth from the start, but despite my own skepticism, I took the job in 2019. I was armed with the grit I’d forged during my ten years as executive director of the artist-run center Western Front, a position that immersed me in practical knowledge about financing and operating a multi-tenant building. Instead of developing projects that “transform communities,” as Toronto Artscape purported to do, I felt confident that we could work with artists and other organizations in our own local context and with our own social and financial resources. But just two weeks into my new position, I held multiple emergency-funding meetings and panic-stricken strategy sessions with my incredible colleagues, and had several solid cries at my desk. I could already see how naive I had been.

In discussions about cultural-space affordability, Artscape’s executives state their desire to overturn narratives of “artists as hapless victims of urban development,” preferring to refer to them as “agents of change” within their cities. Artscape’s claims of transformational economic self-sufficiency attracted governments (at all levels). But governments often repeat lofty proclamations about artists’ essential role in our cities while they lack the resources or political will to sufficiently support them. They are eager to embrace visions of cultural vitality without allocating the level of investment needed to achieve them. Their embrace of Artscape’s claims evidences magical thinking: that a “market-light” approach, one that mirrored the commercial real-estate market minus obscene profits, would solve the problem. On the heels of Artscape’s collapse, it’s important to understand how this magical thinking was deeply disconnected from the organizational, policy, and real-estate reality in which we all exist.

This was the enormous challenge that Artscape endeavored to take on: how do you provide affordability to a chronically underfunded sector within a profit-driven real-estate market? With its years of experience developing live-work spaces and its high profile, Artscape presented itself as “uniquely qualified” to tackle this dilemma, and its robust organizational capacity made it seem a safe bet to funders and developers. This outsize focus on capacity led to the consolidation of multiple cultural-infrastructure projects into Artscape. The organization became a behemoth that struggled to serve its artist-tenants and ultimately itself, begging larger philosophical questions: What does it mean for one organization to build up its own administrative and financial capacities on the backs of the cultural community it’s trying to support? Who benefits most from this top-heavy model? Is it the artists and organizations desperately in need of space, or is it Artscape?

What follows is neither a forensic analysis nor a takedown but rather a personal interpretation from which—at the risk of sounding naive again—I hope other possibilities (and indeed necessary approaches) can become visible. 

Janet Wang, BCA Sun Wah Representation, 2020.

Affordable Space for Art

The lack of affordable space for cultural production is well-covered territory. A simple Google search for “affordable art studio crisis” brings up hundreds of articles from the past ten years outlining the negative impact of astronomical real-estate prices on our cities’ cultural lives. Headlines range from “An Art World Capital, With Few Places for Artists to Work” (the New York Times) to “Affordability is the Number One Concern for Artists” (the Art Newspaper). All of us who work in this sector understand these conditions intimately. In 2019, the Eastside Art Society reported the loss in Vancouver of approximately 400,000 square feet of studio space over the previous decade and charted studio-rental-rate increases that far outpaced artist incomes. Given this reality, the promise to carve out affordable space from within an ever-inflating market had an unsurprisingly wide appeal—but as evidenced by Artscape’s recent news, the promise was too good to be true. The numbers just didn’t add up.

Artists have long eked out spaces for working and living within urban environments, with some even acquiring real estate as part of an artistic practice. These include George Maciunas, who established Fluxhouse Cooperatives (1966–75) in New York’s Soho and the artist-founders of my former employer Western Front, who bought their Vancouver space in 1973. But artists are no longer able to purchase whole buildings in New York or Vancouver for $50,000, as was the case in the 1970s. Out of the hostile real-estate environment that has taken root in decades since, a new type of arts organization emerged: the nonprofit cultural-space provider. Unlike a typical market-based commercial landlord, a nonprofit cultural-space provider is mandated to provide secure and affordable space to serve the needs of cultural communities. These nonprofit organizations set out to deliver massive benefits to artists and cultural nonprofits by subsidizing rents, sharing resources, and offering secure long-term tenancies; in this vision, greater community cohesion would flourish among culture workers living and working in proximity. In Canada, Artscape was a progenitor of this new organizational typology.

Founded in 1986 as an initiative of the Toronto Arts Council, Artscape opened its first major project in 1991: Liberty Village at 60 Atlantic Avenue in Toronto, which housed forty-eight artist studios in more than 30,000 square feet. By the end of the 1990s, Artscape operated six different studio buildings around the city. It was, in its own words, based on a “social enterprise model, offering below-market rents that generated enough income for the project to be sustainable,” and to many in Toronto and around the world, it seemed a phenomenal success story. Through the 2000s and on the heels of Richard Florida’s “creative city” frenzy which urged cities to revitalize their centers by attracting the “creative class,” Artscape began to reframe its cultural-development activity as “creative placemaking,” a term it described as “intentionally leveraging art to act as a catalyst for community growth and change.”

By 2017, Artscape’s portfolio included twelve active sites and an increasingly complex organizational structure. The original nonprofit that served as the organization’s main entity grew to include a foundation to manage charitable activities (significantly, private donations), a housing nonprofit, an additional development nonprofit to manage their Daniel Spectrum project, and two separate corporations to handle its condo assets. That year, while an increasing number of urbanists were raising alarms about the negative effects of creative-city rhetoric, and Florida himself was being derided as “the patron saint of avocado toast,” Artscape and its “creative-placemaking lab” continued to preach the power of creative placemaking to smaller organizations, developers, and municipalities. It had also launched its first national affiliate: BC Artscape.

Imported vs Local Solutions

 Inspired by Artscape’s success in Toronto, the City of Vancouver has seen the organization as a way to solve its own shortage of cultural space. The city’s affordability crisis, fueled by offshore investment, the 2010 Winter Olympics, money laundering, or bad municipal policy, depending on who you talk to, spread from residential to commercial properties. In a 2014 memo, the city council announced a $300,000 CAD investment to establish an Artscape Vancouver affiliate. While the memo asserted that “strong support for the initiative has been expressed by arts and culture leaders, urban developers, financial institutions and the philanthropic sector,” the majority of the city’s cultural community was unconvinced by Artscape and its creative placemaking. Artscape’s mission to “make space for creativity and transform communities” is almost comical in the way it says the quiet part out loud. Such blatant use of culture as a wedge for relentless real-estate development was anathema to many.

Nils Norman, Vancouver Vernacular, 2015. Photo by Ben Wilson. This public art piece was part of the Urgent Imagination project.

This relationship between art and real-estate development was the subject of a multipart project I curated while serving as executive director of Western Front. Titled Urgent Imagination (2015), the project responded to the Front’s own involvement in the controversial construction of a nearby residential tower. The tower’s developer made a massive “community-amenity contribution” to the City of Vancouver—a complicated and impervious municipal process in which developers trade cash or other public-benefit amenities for additional height and density. (The Toronto equivalent, Section 37, is the municipal mechanism through which Artscape funded several of its capital projects.) Through Urgent Imagination, my collaborators and I wrestled publicly with the impact of Western Front accepting $1.5 million from this development to buy its building from the original artist-landlords, securing its own future in the neighborhood while contributing to further gentrification. The project and its culminating symposium engaged artists, architects, and policy experts in conversations that were both wildly speculative and grounded in concrete financial and political possibilities. Participants discussed artist-led development initiatives in Vancouver and the UK alongside Artscape’s Toronto model and its potential effects on Vancouver.

Regardless of uneasy community sentiment, the city’s initial $300,000 investment into Toronto Artscape was leveraged into $900,000 from other sources, including the McConnell Foundation and Vancity Community Foundation. Artscape and its creative placemaking had arrived in Vancouver. Four years later, in 2018, with close to $5 million in government investment and private financing, BC Artscape opened its first multi-tenant studio building, BCA Sun Wah, with 49,000 square feet of space in a formerly vacant mall in the city’s Chinatown, a vital neighborhood facing intense economic pressure.

825 Pacific artist-studio building, built by Grosvenor as the CAC for The Pacific (seen in background). Photo by Ryan Snikvalds.

As an Artscape affiliate, BC Artscape reflected its Toronto counterpart. The business model for the Artscapes, and for many other cultural-space providers, is intended to be one of “cost recovery” in order to keep rental rates as affordable as possible. The provider has a long-term lease with a private landowner or municipality, or (very rarely) owns its own building. The operator then subleases space to artists and cultural organizations at a rental rate necessary to cover the space’s operating costs, which often includes a head-lease rental rate, utilities, security, cleaning, staffing, building maintenance, and, in some cases, management fees. These hard costs and fees add up swiftly, and correspondingly, so do the rental fees needed to “recover” them.

Affordable to Who?

“Affordability” is a highly relative term. As evidenced by the pernicious yet popular semantic shift from “affordable” to “below market,” the concept of affordability now adheres more closely to standards set by the real-estate market than the budgets of artists and arts organizations. In its 2019 report Making Space For Art and Culture, the City of Vancouver states that 63 percent of artists in the city reported incomes of less than $40,000 per year, with a median income of $22,000. The 2023 living wage for Vancouver was recently calculated to be just under $47,000 per year, due to rising housing, food, and transportation costs. While market rates continue to rise (and with them, their “below-market” counterparts), spaces that are actually “affordable” to artists on the ground become harder to find.

The picture for cultural organizations is similarly grim. Forty-four percent of Vancouver arts organizations have operating budgets under $100,000, and the percentage of operating support from all levels of government continues to decline in the face of dramatically rising operating costs. For artist-driven organizations fortunate enough to receive Canada Council operating funds, grant amounts have been static since at least 2019 or 2020 and will remain unchanged until 2025 at the earliest. On the expense side, simple consumer inflation rates have increased 16.4 percent since 2019, not including even higher increases to space-rental rates.

And rent is only one pressure. Those of us who have worked in cultural organizations know too well that they have always struggled to pay competitive wages, relying instead on narratives of the culture worker who is passion driven. This narrative has been rightly and necessarily challenged in recent years—especially in the wake of the 2020 Black Lives Matter uprisings, when critics of cultural institutions pointed to low wages as a key barrier to equity in the sector, since few employees without another source of income could afford to keep entry-level art-world jobs. Meeting living-wage standards (at a minimum) has become essential, which means cultural organizations have had to prioritize salary and artist-fee increases while the costs of rent and utilities also rise.

 The Gap

Theoretically, these nonprofit cultural spaces are a way to address this financial quagmire by keeping rental costs low. But here’s the rub: The math does not actually work. In most cases, the total cost of operating these cultural spaces is significantly higher than what its target tenants can afford. At BC Artscape my colleagues and I began to refer to this harsh balance-sheet incongruity simply as “the gap.”

On November 10, 2023, the Globe and Mail published an in-depth article on Artscape’s collapse written by staff reporters Josh O’Kane, David Milstead, and Greg Mercer. This thorough analysis focused mostly on debt incurred as the result of Artscape’s ambitious Launchpad project on Toronto’s waterfront, but it also stated, very clearly, that the organization’s “normal day-to-day business used up more money than it generated”—aka the gap. To fill it, the business models of the Artscapes relied on multiple revenue streams outside of artist rents and project grants to cover costs. Toronto’s affiliate, in particular, depended heavily on event-rental funds from several of its spaces; its 2019 Annual Report shows venue-rental revenues of close to $3 million per year to support operations. A second revenue source for the organization was consulting fees through its Creative Placemaking Lab and fees generated through the start-up of BC Artscape. Another revenue-generating mechanism is something called a development-management fee. These fees are a portion (usually 5 percent) of any major capital project budget and are used to cover organizational overhead throughout the project’s construction. It is logical that Artscape, as a property developer, would use this strategy, which is a development-industry standard to fund administrative operations. However, doing so requires the organization to act like a shark: keep swimming (keep developing) in order to stay afloat (pay operational overhead).

This means that if new development and consulting opportunities don’t materialize (or are delayed for financial or bureaucratic reasons, or, in an extreme case, the arrival of a global pandemic), the gap widens. The pandemic also extinguished Artscape’s rental income overnight, “depriving Artscape of about a quarter of its expected annual revenue,” the Globe reported. With its operational gap exacerbated by the pandemic, Toronto Artscape sunk further into an untenable debt load. The Globe’s financial analysis shows a long-term pattern of borrowing that led to an accumulated debt load of $37.5 million by the time Artscape announced in August 2023 that it would enter receivership. In a press release, the organization cited the repayment of its debt to Toronto Dominion Bank as the main reason for its collapse. This scenario was all too familiar. Albeit on a much smaller scale, BC Artscape suffered from similar chronic operating shortfalls and an impossible-to-meet debt load.

But let me back up.

BCA’s Transition

In 2019, BC Artscape became wholly independent of its Toronto progenitor and was rebranded as BCA. After my initial rude awakening to the financial realities of the organization in 2019, I spent the rest of that year and most of the next desperately trying to fill BCA’s gap with consulting contracts and debt renegotiations with Vancity Credit Union. I went on what I called my “radical-honesty tour” of lenders and funders during which I disclosed my findings, debunking the business model’s magical thinking. At the time BCA was operating the BCA Sun Wah project, which housed around seventy artists and cultural organizations (many of whom had invested their own scarce resources) and had two other large-scale developments in the pipeline, including a 22,000-square-foot affordable-studio building and thirty units of affordable housing for artists. I was desperate for a solution. Knowing that BCA could not maintain these projects on its own, I entered into conversations with 221A. The Vancouver artist-run organization managed a number of smaller-scale artist-studio buildings around the city. It was already invested in the affordable-space game and interested in scaling up its operations. As both a programming organization and a cultural-space operator, 221A’s financial structure was significantly more stable than BCA’s due to its eligibility for operating funds from all levels of government.

4th Floor Interior, BCA Sun Wah.

221A’s executive director Brian McBay, key members of our respective boards, and I got to work rigorously drafting a new plan, consulting with lawyers and business analysts. We were able to convince all of BCA’s original funders and Vancity that a dramatic restructuring would both save the BCA Sun Wah space from closure and make all of the other BCA projects sustainable over the long term. In June 2021, BCA and 221A entered into a collaborative joint venture that saw the transfer of some of BCA’s major capital assets to 221A. BCA’s gap, if not fully closed, was narrowed. But this narrowing was achieved by consolidating a significant amount of square footage into one single organization. After the agreement, 221A became the largest cultural-space operator in the city (aside from the city itself). As 221A grows, by necessity, to meet the administrative demands of these and other future projects, the same questions asked of Artscape must be asked again: Who benefits most? Is it the nonprofit providing the space, or is it the artist desperately in need of space?

If Not This, Then What?

Because the need for affordable space is so great, the focus has been on large-scale solutions. To funders, Artscape’s track record of building large-scale projects that serve many artists under one roof made it an efficient investment option—but at the expense of smaller organizations with their own goals. In the case of BC Artscape, the bias toward the colossal Artscape over individual, community-based solutions was explicit. The 2014 report by the city’s general manager of community service to Vancouver City Council announcing Artscape’s arrival makes note of several local arts organizations with expertise in operating cultural spaces, stating, “These organizations are ideally suited to the scale of projects they are currently engaged in, but have limited capacity for larger scale cultural (re) development projects.” In a particularly ironic twist, 221A was one of the smaller organizations named as lacking sufficient capacity.

As an organization, 221A is currently working toward a Cultural Land Trust (CLT) for Vancouver. While still complicated by issues of scale, the CLT makes participatory governance structures, collective ownership of property assets, and equity key parts of its platform. A precedent for this type of organization can be seen in San Francisco’s Community Arts Stabilization Trust (CAST), which functions not only as an operator of nonprofit cultural spaces but also as a financial partner to support cultural organizations toward more self-determined ends. CAST works with its partners to build their financial and organizational capacities until they are able to purchase their own assets (which CAST has held in trust). Land-trust models like these prioritize building capacity across a community over the singular capacity of one organization.

Tenant-owned, tenant-run, or collaborative-governance models, of course, aren’t new; they have simply been under-supported. Numerous coops, collectives, and other space-sharing models already operate in Vancouver, Toronto, and beyond. Under the BCA-221A collaborative joint venture, the BCA Sun Wah project remains independent and is itself now moving toward its own tenant-governed model. In theory, with additional operating funds from the city and the reallocation of funds formerly used for administrative overhead—i.e., my salary—this can work.

There are also potential policy shifts at municipal, provincial, and federal levels that would have meaningful impact. More money in the hands of artists, arts organizations, and cultural-space providers is one (obvious) answer, but there are others. For example, a cash community amenity contribution allowed Western Front to purchase its building and, in turn, the organization provides affordable live, work, studio, exhibition, and performance space for the community. While the city has not yet replicated this model—and it is a development-driven solution—it has the potential to distribute capital resources to multiple smaller-scale organizations so they may purchase or develop their own spaces.

In January 2024, Artscape released an update on its receivership process, announcing that—through considerable efforts by the City of Toronto, a small cadre of (former) Artscape staff, and a long list of financial contributors—the organization had been broken up into multiple smaller-scale nonprofits. Artscape’s other commercial real-estate assets, such as their “entrepreneurship hub” Launchpad and condo units, will be acquired by the receiver. The press release states explicitly that new business models will be required to make the surviving spaces sustainable in the long term.

But what business model can be successful in this overwhelmingly rapacious real-estate market? Where affordability is concerned, we’ve long surpassed the limits of kinder, gentler capitalism or notions that “below-market” rates can solve the problem. If the property market cannot be curtailed and funding to artists and organizations does not increase to meet market demands, these market-based solutions are doomed to fail. Artists need a diversity of options. Despite Artscape’s unceremonious end, it must be said that its ambition resulted in an incredible amount of new space for culture—though this space will only meet the needs of artists and organizations if it is managed more sustainably. But supporting this model of nonprofit cultural-space providers can’t come at the expense of other potentials. We need more funding and more artists and organizations to manage and own their own buildings. We need to try solutions that artists and community members haven’t even proposed yet. Rather than trust in the capacities of a few to solve the problem, we need to trust in the capacities and ideas of many.

Correction 2/13/2024: An earlier version of this story inaccurately stated that 221A temporarily manages the BCA Sun Wah project. 221A no longer manages this project. The story also previously referred to a “joint-venture agreement” between BCA and 221A. The story now uses the phrase “collaborative joint venture,” in accordance with the terminology in the 2021 report from the City of Vancouver’s General Manager of Arts, Culture, and Community Services.