Type: Below Market Investments, High Impact Investments
Topic: Buildings & Housing
Status: Current
Because of development pressures in rural and urban areas, artists and creative enterprises struggle to find secure, affordable living spaces and studios. Artspace leverages its real estate development expertise to support artists. Over the past 30 years, it has developed more than 50 mixed-use properties, providing homes to over 1,500 artists and their families and workspaces for 600 commercial businesses.
Investment
$2 million 10-year loan at 0.75%; originated in 2020
Rationale
Building on our creative place-making grants, McKnight’s program-related investment replenishes internal working capital for a pipeline of 8–10 projects over the next decade in Minnesota, Arizona, Colorado, New York, and Maryland. We expect this low-interest loan will help Artspace raise and borrow a total of $139 million in development capital to fuel more than 1 million square feet of new space. Artspace’s thoughtful, predevelopment work aims to earn deep community and municipal support.
McKnight’s loan will also support Minnesota projects like the Hennepin Center for the Arts, which strives to ensure opportunities for minority communities that have not traditionally had as much access to living spaces or artists’ studios
Returns
Too early to tell
Lessons Learned
Too early to report. However, this program related investment (PRI) is part of McKnight’s ongoing exploration of alternative economies and creative use of capital to benefit artists. We hope the investment will provide learning for McKnight’s new strategies at the intersection of creative arts leadership and equitable communities.
Photo Credit: Artspace: Northern Warehouse Artist Lofts in Saint Paul, MN.
Disclaimer of Endorsement: The McKnight Foundation does not endorse or recommend any commercial products, processes, or service providers.
Last updated 10/2021