City Council Considers Creative Economy Report
Tonight the Portland City Council will vote on orders to establish the Arts District TIF (Tax Increment Financing) to invest in our creative economy. The idea of using TIF funding for arts and cultural purposes is one that I conceived while I was running for a seat on the City Council over two years ago. The West End News published a letter to the editor in a June 2006 in which I wrote that the City should “collaborate with the creative community by granting a TIF (Tax Increment Financing) to the Arts District.”
The orders will establish the new TIF zone will designate a mapped out area that essentially overlays our Arts District, from Longfellow Square to City Hall along Congress Street. As property tax revenue increases in the Arts District, the additional revenue will go into the TIF fund. Revenues in a TIF fund have an increased value because they are sheltered from State and County assessments leading to more spending power. Once the TIF has collected revenue, the City Council can designate a portion of the funds for arts and cultural purposes.
Using TIF funds for arts and cultural purposes is a new economic development tool in the State of Maine. In the recent past, the City of Portland and other cities and towns have used TIF funds for the development of parking garages and for tax breaks for companies, such as UNUM.
After being elected to the Portland City Council, I worked with the League of Young Voters and Representative Herb Adams to pass State Legislation to allow TIF funds to be used for arts and cultural purposes. The Democrats in Augusta liked the idea of supporting the arts community while the Republicans saw the legislation as another opportunity for economic development.
The Creative Economy Steering Committee, with Councilor Cohen and I as Co-Chairs, embraced the Arts District TIF concept for inclusion in the Creative Economy Report to the City Council. The Report calls for the creation of the Creative Portland Corporation, a quasi-municipal organization be formed and funded by revenues from the Arts District TIF. The CPC will use the TIF funds (up to $100,000 per year) and private funds to hire an executive director and pay for expenses necessary to implement the Report according to its mission to grow the creative economy.
The Report also calls for the increase of cultural events, promotion to strengthen the creative economy, and the creation of the Center for the Arts. Live/works space should be incorporated into the Center for the Arts along with space for galleries, performances, offices, and business incubators. The funding to create the Center for the Arts will likely come from private and public sources and should be located in the Arts District according to the Report.
The Finance Committee (Councilors Cohen, Anton, and I) reviewed the Report and drafted the orders and voted to refer the Arts District TIF and other orders to the City Council for passage. Another order was created to allow the City Manager to enter into negotiations with PACA (Portland Arts and Cultural Alliance) to discuss merging PACA with the CPC. Also, an order was drafted to develop a memorandum of understanding with PDD (Portland’s Downtown District) to ensure promotional services and events are coordinated and collaborative.
The creative economy is already important economic driver in Portland. In 2006, the Americans for the Arts found that the direct economic impact of spending by nonprofit arts and cultural audiences in Portland was about five times larger than in regions of similar size ($15.4 Million to $3.9 Million). The study also found that Local Government revenue was five times larger due to the total economic impact of non-profit arts audiences in comparison to regions of similar size ($970,000 to $193,000). In this category, Local Government revenue even exceeded the National Median of $945,000.
The passage of these orders will help Portland grow on its successes by attracting more creative enterprises, helping creative individuals prosper, and strengthening Portland as an arts and cultural destination. Investing in the creative economy is a proven form of economic development in the Portland.
Please attend the meeting tonight at 7pm at City Hall and speak in favor of the passage of Orders 92, 93, and 94 or visit http://www.portlandmaine.gov/council.htm and email your City Councilors.