Mpls.-based Artspace carves broad niche as developer of artists' spaces

For artist Rachel Vitko, getting keys to Jackson Flats was like landing a dream job and the perfect apartment on the same day.

Vitko, 30, has lived with her father and in a series of shared rentals while she worked as a waitress to support her painting and ceramics. Recently, she was one of the first to move into the lofts in northeast Minneapolis, which include 35 live-work apartments for artists. The building is expected to be fully occupied by the end of January.

Vitko said she felt like she "won the lottery" when she qualified for her own affordable live-work space and was able to quit her restaurant job.

If she succeeds as a full-time artist, Vitko, and thousands like her, can thank Artspace, the Minneapolis-based outfit that has become the nation's largest nonprofit arts developer.

Jackson Flats, a $10 million project in a traditionally working-class neighborhood, is Artspace's first new construction in its home state, where it launched the rebirth of St. Paul's Lowertown 28 years ago. In that time it has developed more than $1 billion worth of housing, studio and office space. About 2,000 artists live and work in Artspace buildings nationwide. Artspace properties also house 300 arts organizations, including the Cowles Center and the Traffic Zone Center in downtown Minneapolis.

But the developer's impact goes beyond its field-leading numbers. Artspace projects often bring artistic and cultural energy to blighted or up-and-coming urban areas.

Artspace's dozen other Minnesota projects have been renovations, from a former envelope factory that became Tils­ner Artists' Coop in St. Paul in 1992 to a former middle school in Duluth that became the Washington Studios in 1996.

"They have been leaders in this movement of showing how artists can change places, neighborhoods, cities," said Rocco Landesman, former chairman of the National Endowment for the Arts and head of Art Place, a consortium concerned with revitalizing urban cores. "Now every mayor in the country wants Artspace in their city. They're drinking the Kool-Aid, and it's very intoxicating."

One of those imbibers is Jack O'Reilly, mayor of Dearborn, Mich. This satellite of Detroit is turning over its city hall to Artspace as part of a revitalization project.

"They weren't going to come to us, so we went to them," O'Reilly said. "I visited their properties in Chicago and in the Twin Cities. I've talked to mayors in Minneapolis and St. Paul. There are seven steps you have to go through to get them, from fundraising to identifying artists and community surveys. We worked through all of that."

The $16 million Dearborn project would result in live-and-work lofts for 45 artists. Construction is due to begin next summer. Artspace recently found out that it had secured funding.

"Our urban community is transforming, and this would be a catalyst in that transformation," said O'Reilly.

In New Orleans, Artspace plans to renovate a middle school in the Tremé neighborhood. The $40 million project is part of a $1.6 billion, post-Katrina development of a 300-square-block area.

In New York, Artspace is doing a $52 million conversion of P.S. 109 in Spanish Harlem. The five-story school building will have 90 units of artist housing and 10,000 square feet of office space.

Artspace projects require tenacity, patience, financial acumen and political finesse to navigate layers of federal, state and local bureaucracy.

Before Artspace and its municipal hosts identify a site, they conduct feasibility studies. Artspace applies for low-income tax credits from the Department of Housing and Urban Development.

"Often we have to apply two or even three times," said Melodie Bahan, vice president of communications at Artspace.

The credits, which come in two types, could fund up to 60 percent of a project, said Lindquist. That's how Artspace is able to offer below-market rents to artists.

Artspace also gets funding from tax-increment-financing districts, transportation-related sources and urban revitalization efforts. Grants from foundations and bank loans provide bridge funds.

Sometimes, things fall through. In 2004, Artspace abandoned a plan to convert a historic middle school in Northfield, Minn., after falling shy of its funding goal. Last year, Artspace, scotched plans for a $13.7 million, 61-unit rental building on a city-owned lot near the Guthrie Theater.

How Artspace became such an in-demand developer is a story of adaptation and vision. It was founded in 1979 as a subset of the Minneapolis Arts Commission. Melisande Charles became its first executive director.

The initial goal of the department was to create a matching service for artists and landlords "so that artists could bring some life to an area," Charles said. "We wanted to do it citywide but had to narrow it down to the Warehouse District, which was blighted at the time."

What she found was the so-called SoHo effect, in which artists revive an area, only to be forced out by rising rents.

"Artists got the short end of the stick," said Charles, 82, now a painter living in St. Paul.

In 1986, the commission hired Kelley Lindquist, a one-time Guthrie facilities manager.

Lindquist brought a simple vision to Artspace: Develop and own its properties, then make them available permanently for artists. Its first project, the six-story Northern Warehouse Artist Co-op in downtown St. Paul, opened in 1990.

"That project almost killed us," said Lindquist.

"There was not much going on around here," said artist Ta-Coumba Aiken, who has lived in the Northern Warehouse for 28 years. "And over the years we started the [St. Paul] Art Crawl, the farmers market and light rail have come in, and everything is bustling."

In the late 1990s, Artspace became the vehicle for saving the old Shubert Theater, which was moved from Block E in Minneapolis to its new location on Hennepin Avenue. Sluggish fundraising left that project an eyesore for 12 years. Opened in 2011, the $46 million conversion has proved a boon for dance.

Today, Artspace has a $16 million budget and 70 employees in Minneapolis and at satellite offices across the nation.

"I feel Artspace doesn't get enough credit for what they've done," said Rip Rapson, president of the Kresge Foundation. " "hey are the pioneers who perfected a model. They are visionaries with tenacity and a ruthless adherence to excellence."

During a recent open house at Jackson Flats, artist Vitko showed off her apartment. The building has one-, two- and three-bedroom units, plus space for galleries, concerts, a playground and a shared garden.

As Vitko threw clay that she intended to fire in her kiln, she marveled at the deal she's getting. Her monthly rent is under $500. "I stalked Artspace for like a year to get in," she said. "I can work and live in the same place, so I don't have to pay two rents. And it's very affordable. It's a dream come true."

Rohan Preston • 612-673-4390