Taxes and the arts: Portland sees a way to benefit both
Revenue from an arts-tax district will be earmarked to support innovative businesses and the arts.
By TOM BELL, Staff Writer May 9, 2009
PORTLAND — Cities in Maine have used money from special tax districts to pay for things such as parking garages and extending sewer lines.
Portland will be the first to use such a district to promote the creative economy.
The fiscal 2010 budget endorsed by the City Council's Finance Committee includes $30,000 raised from the city's new Arts Tax Increment Financing District.
The money would be used to promote the arts and cultural events in the city, and to support innovative business initiatives.
"This is a new frontier on how to use TIF money," said City Councilor David Marshall. "The intent is to use it for the public good, and I really believe that using TIFs for arts and cultural purposes gets to the heart of the public good."
The tax district mirrors the city's arts district, which runs along Congress Street, between State and Pearl streets. Money generated in the tax district can be used to promote creative enterprises throughout the city.
The money is raised when new construction or renovation in a district increases a property value and generates more tax dollars.
Most of the new value this year was created when Greg Shinberg purchased the former University of Southern Maine's Portland Hall dormitory on Congress Street and converted it into an apartment building.
The $30,000 represents 57 percent of the additional tax revenue raised in the district. The rest of the money would go into the city's general fund.
The $30,000 is considered seed money because it can be used only if money from other sources matches it.
When the council created the Arts District TIF, it established the Creative Portland Corp. to distribute the money. That agency exists only on paper.
City officials are now talking about merging the Creative Portland Corp. with the Portland Arts & Cultural Alliance, a nonprofit that manages the First Friday's Art Walk and has a budget of $50,000.
By merging the two agencies, the city can take advantage of the expertise of the Portland Arts & Culture Alliance. In addition, the agency's budget can be used as a match, Marshall said.
The tax program is structured so it caps the amounts of money that can be spent on the arts at $30,000 this year, $70,000 next year and $100,000 in the third year.
The agency is open to the idea of the merger, said Catherine Valenza, the agency's executive director. She said the additional money could be used to leverage current public and private efforts and create new ways to bolster the city's creative economy.
"Pooling our efforts and forming creative partnerships is important during these difficult economic times," she said.
The Creative Economy Steering Committee last October recommended the new tax district after holding meetings for more two years. The committee, established by former mayor James Cohen, represented a variety of creative enterprises in Portland, including cultural organizations, specialty manufacturers, and architectural firms, marketing companies, colleges and the media.
Portland's growth is strongly tied to its quality of life, including arts and culture, as well as the city's ability to leverage the growth in knowledge-based businesses, Cohen said.
"We need to maintain what we've got and improve in order to maintain our competitive advantage," he said. "This can help set Portland apart from other communities in the region and the country."
In 2006, Americans for the Arts found that the direct economic impact of spending by nonprofit arts and cultural audiences in Portland was $15.4 million – about five times larger than in regions of similar size.
Staff Writer Tom Bell can be contacted at 791-6369 or at:
Copyright 2009 by The Portland Press Herald/Maine Sunday Telegram. All rights reserved.