Architect Cheryl Spector spent four years cutting through red tape and lining up financing to get her Nine10Arts development off the ground.
The lengthy process is typical for people trying to develop spaces for emerging artists to live and work.
“I had to go through zoning three times,” said Spector, who served on the Mayor’s Task Force on Creative Spaces. “And I spent the better part of nine months just trying to get the construction lending.”
Spector, principal of Spector and Associates PC, said she went to 15 banks before Commercial Federal, now Bank of the West, agreed to provide a loan under the New Markets Tax Credit program.
The program, administered by the U.S. Treasury Department, allows taxpayers to receive a credit against federal income taxes for making qualified equity investments in designated Community Development Entities. The hitch: The program is available only to companies that demonstrate a primary mission of serving or providing capital for low-income communities or people.
Using New Markets credits to secure loans is one tool that might help the arts community fund projects.
Other methods might include establishing a cultural land trust, which could make buying a building cheaper for creative companies.
Under that scenario, a property owner would place the land into a trust and receive tax credits based on its value. The building would then be sold to the creative company.
“In most cases, the land is more valuable than the building,” said Ginger White, senior economic development specialist in Denver’s Office of Cultural Affairs. “If a building is appraised at $100,000, the property owner would get $40,000 for the building and a $60,000 tax credit. The artist wouldn’t have to finance the full $100,000.”
But more often than not, the challenge is connecting funding sources with artists.
“To the artistic community, sometimes the financing of projects is a mystery,” said Wyatt Jones, a loan officer with the Colorado Housing and Finance Authority, who served on the task force. “And the artistic community is sometimes a mystery to the financial industry. Our focus was on coming up with a way to bridge the gap between the two.”
The task force also recommends changing zoning in certain residential districts to allow for studios to be built in detached garages.
Staff writer Margaret Jackson can be reached at 303-954-1473 or mjackson@denverpost.com.
