Downturn Means Creative Approach to Tenancy

NEW YORK CITY-State Department of Labor employment figures released late last week showed mixed results for the city’s financial services sector. On balance, the sector had a net loss of 300 jobs during August, with gains in real estate employment offset by losses in the banking, securities and insurance industries; year to date, the tally for securities alone has been 4,000 layoffs. Given these kinds of numbers for bedrock employment sectors, now may be an opportune time to look at areas of future growth, such as the city’s creative community, which serves as a magnet for employers and residents as well as the artists themselves.

Taking such a look will be a panel convening on Monday morning at the new headquarters of Grey Advertising, L&L Holding Co.’s 200 Fifth Ave. Experts including Mary Ann Tighe, CEO of the New York tristate region for CB Richard Ellis and chairman of the Real Estate Board of New York; Seth Pinsky, president of the New York City Economic Development Corp.; Eric Gural, executive managing director of Newmark Knight Frank; and Sam Miller, president of the Lower Manhattan Cultural Council, will discuss whether the current market represents a unique opportunity to address the serious space needs facing New York City artists, arts groups and creative entrepreneurs. The event is sponsored by the Rockefeller Foundation and presented by the Center for an Urban Future, a New York City-based think tank.

The CUF says the event is titled “Time to be Creative” because previous downturns in New York have led to “innovative and imaginative real estate development projects”, many of which specifically benefited nonprofits and those in the arts. The conference, which gets under way at 8:30 a.m., will examine whether it’s time once again to take a creative approach, while exploring strategies to seize the opportunity.

“Job creation has to be priority number one right now, and it’s clearer than ever that Wall Street isn’t going to get us out of this downturn,” Jonathan Bowles, executive director of the CUF, tells GlobeSt.com. “So the creative economy is taking on an increasingly important role in New York’s economic growth.”

Although the creative sector offers “so much promise,” says Bowles, he adds that it’s confronted by a number of challenges. “Foremost among them is the lack of affordable space, and we think there’s a real opportunity to address the space issues in this real estate downturn.”

While obviously it’s unrealistic to expect the owner of a class A office tower in the Plaza District to make space available at discounted rates for an artist’s studio, Bowles says, “There may be property owners that would welcome turning over part or all of a building to arts groups or artists. It’s not necessarily going to work for a healthy building in Midtown, but there may be class B buildings in Brooklyn or Queens or Lower Manhattan that have a large number of vacancies. Maybe the prospects aren’t good in this market, or maybe the owner has a lot of debt and needs a stable supply of tenants. Clearly, it has to be in the interest of the property owner to do something like this, and one of the things we’re going to try to figure out at this conference is the right mix of incentives or financing that might help building owners come to the table.”

He points out that while some would ask what an artist—starving or otherwise—has to do with a major creative or media tenant, “our research has shown that so many of the for-profit creative businesses in New York—from advertising to graphic design and film—are here because the artistic nature of the population. Creative people want to be near artists; they want to be able to attend arts events.” Conversely, when the city loses some of its edge in the arts, “it has a potentially negative impact on the larger for-profit creative sector,” he adds.

Following up the conference, the CUF plans to issue a paper that draws on the conference’s recommendations as well as other research. “We’ve been working on it for awhile,” Bowles says, adding that the release date is still to be determined. The group has previously published several studies about the economic importance of the city’s creative sector and the challenges facing New York’s artists.