Wednesday, February 24, 2010

Looking for Art in all the wrong places...

Chico is an artsy town, no doubt about it. Creativity abounds and we all love that. And while me may at times disagree about a particular piece of art (especially when it's public art), I think we do all agree that art in-and-of-itself makes the community a better place to live and do business. No argument there.

A lot of folks go the extra mile to make sure that Chico's art culture is well represented and we should appreciate their work. It's clearly impossible to make everyone happy all the time, especially when public funds are being used to create public works of art. But those folks do their best to present Chico in the a good light using public tax dollars collected through the RDA. (I don't have space here to explain how the RDA works, so if you really want to know call the City).

Many private property owners voluntarily include works of art in their new developments or remodels of existing property. We should be very appreciative of that as well. In fact the Enloe Hospital expansion project incorporates several art components into the project. We can't wait to see those finished!

The system is working well as it is, which is why the Chamber of Commerce is in strong opposition to the new proposal by a subcommittee of the City Art Commission that would REQUIRE private property developers to include public art equal to the value of 1% of the total project costs in their projects whenever total costs exceed $1,000,000.00. (Yes, that includes housing projects too). There is a caveat that if you don't really WANT art on your project, you can just pay the fee and let the City put some art somewhere else. We're not consoled by that caveat.

Well heck, it's only 1%, and it's only on really big projects...right? Besides, you can buy your way out of it, so what's the big deal?

This is a big deal folks, and it will take a few minutes to explain all the various downsides to this proposal, so bear with me with a bit.

Make no mistake about it, this is a new tax levied against property owners.

First and foremost we must understand that public art will NOT increase the value of a project from a financing point of view. It's lovely to look at but it will do nothing to increase the appraised value of the property. Commercial property values are determined by the income that can be derived from the property in the form of rents. Rents won't increase because you include a piece of public art on the building. (If you're building a million-dollar home, it may actually reduce the value because now any potential buyer has to love the bathroom tile and the statue in the front yard!)

Because the art won't increase the appraised value, the costs associated with creating and maintaining the artwork cannot be included in the financing of construction costs. That means this costs is a direct cash expense to the property owner, one that cannot be recovered through the cash flow generated by the project or through a future sale of the project. It's just another cash expense added to an already expensive project.

$1,000,000.00 doesn't buy as much development as it used to. In fact there are very few commercial projects that can be created for less than a cool million these days. Even at 1%, this added cost for art can be a significant barrier to a new project, one that most property owners can ill-afford.

Secondly, the program creates another level of bureaucracy that must be navigated in order to proceed with a new project or significant remodel. Trust me, that is the LAST thing anybody needs right now.

Jobs are created through private investment in our community, especially the private investment that occurs when property owners develop their property. This proposal is a significant disincentive to that investment.

It's a poor idea that comes at the worst of economic times. City government should be working to create an environment conducive to the private investment and job creation necessary for the long-term stability of our community. (Heck, all levels of government should be doing that but we'll concentrate on the City for now). This program works against those goals in a big way.

We'll be opposing this proposal when the issue comes up at the Commission level, and if necessary at the Council. We urge you to do the same.

Our message....."We like art...we like the system the way it works now...enough already with the added taxes...!"

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