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Artopolis: The State of the Creative Nation

Arts entrepreneurs won't save the day for every city, but in some spots, they're the new oil (paint) barons.
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Special Report
State of the Creative Nation Creative arts entrepreneurs are building new businesses while reinvigorating cities and towns across the country. We checked around to see who's creating what, and how this growing creative class contributes to economies small and large.

    As far as arts entrepreneurship goes, the Slowdown club in Omaha, Neb., started modestly. It was barely art, and barely entrepreneurship.

    Jason Kulbel and Robb Nansel just wanted a place to hang out, drink a beer and listen to some good music in Omaha. Their neighbors learned of their plan and crowded a public hearing, furious at the idea of young people milling around, drinking and laughing late into the night. It's easy to imagine the rest: Conservative city prevents those damn kids from making a ruckus.

    But that's not how it went down. What followed is so unlikely and so perfect that it could be the platonic ideal of how arts entrepreneurs can thrive by working with politicians and other businesspeople.

    Some city officials learned of this fight and realized that in the 21st century what Omaha needs more than anything else is a lot of young people hanging out, having fun. As in many smaller cities and towns, the smart, young and ambitious left Omaha as soon as they could; they went to Minneapolis, Chicago, San Francisco--places that had the essential combination of fun things to do, fun people to do them with and fun and interesting jobs.

    Owners Robb Nansel and Jason Kulbel sit outside the Slowdown club in Omaha, Neb., part of a $10 million revitalization effort in the city's industrial corner. Photo© Bill Sitzmann/Minorwhite Studios

    Omaha's traditional economic base, historically, was manufacturing, railroads and livestock. By 2000, it was clear: Omaha--like the nation--needed to embrace higher-end services, like architecture, graphic design and web development. The problem, of course, was that promising young architects, graphic designers and web developers didn't want to live in Omaha.

    Kulbel and Nansel don't use words like art or entrepreneur. They're buddies from the University of Nebraska at Lincoln who hang out with a lot of musicians. They have a laid-back, relaxed air that's part Midwest heartland, part hipster. To them, it all happened in a bit of a blur. One day their neighbors were screaming at them, the next day they were meeting with top city planning officials, the Chamber of Commerce and some of the biggest real estate developers in town, and everyone was telling them they could save Omaha.

    City leaders helped put together a deal: Instead of a small club in a residential neighborhood, Kulbel and Nansel bought an entire city block in the industrial northeast corner of Omaha and financed a $10 million arts complex. It's now home to their club, the Slowdown (named the best indie rock club in the country by Esquire); Film Streams, a nonprofit art movie house; Nansel's indie rock label Saddle Creek Records; and retailers like Urban Outfitters and American Apparel, as well as the delicious Blue Line Coffee. The complex is at the core of the revitalization of this until-recently abandoned 80-block industrial corner of the city. There are art galleries, restaurants, cafes and lots of newly renovated buildings housing designers, architects and web developers, many with the same facial hair, piercings and tattoos you'd see in Brooklyn, N.Y., or San Francisco.

    Bright Eyes playing at the Slowdown Photo© Bill Sitzmann/Minorwhite Studios

    Local developer Todd Heistand converted several large factories into offices and condos for Omaha's new creative class. He admits, with a laugh, that he's not a fan of the kind of music played at the Slowdown club, though he tried. "I bought three CDs, but it was hard to find a song I liked," he says.

    Kulbel and Nansel aren't the only ones responsible for Omaha's renaissance, but Heistand guesses that the cultural amenities these two arts entrepreneurs brought in have increased the value of local real estate by at least $100 million. Kulbel and Nansel are quick to point out, though, that they didn't get any of that money and are going to be in debt a while, paying off the $10 million loan on their complex.

    There has been a major structural change in the U.S. economy and labor market over the past couple decades that makes arts entrepreneurship dramatically more valuable. To put it simply and a bit crudely: Our economy is demanding more well-educated workers than our schools are providing. To attract this scarce resource, communities have to offer more than just jobs. In, say, the 1930s or 1950s, or even 1970s, a steel magnate or auto manufacturing plant foreman didn't care--and didn't need to--about the cultural offerings of his city. Workers moved to where the decent paying jobs were.

    Today, pretty much no American community or business can succeed with a base of low-skill labor. Better-educated workers are needed to perform jobs that rely more on their brains than on their bodies. Even many factory jobs these days--and about 10 percent of Americans work in manufacturing--require education in basic computer technology, metallurgy, chemistry or math.

    In several studies, the National Endowment for the Arts found that education is the main predictor of arts engagement. Virtually no high school dropouts attend arts activities such as music, dance or theater performances and museum or other visual arts exhibits. Yet nearly 7 percent of high school grads do, and the numbers increase dramatically: 21 percent of people with some college; 36 percent of college grads; and 44 percent of those who attended graduate school. And it works both ways: Communities with more arts activities attract more educated people, and communities with more educated people demand more arts activities.

    The Nonprofit Picture Though numbers are scarce for for-profit arts businesses, there's plenty of data on the nonprofit side of the easel. According to a study from Americans for the Arts, the country's nonprofit arts and culture industry generates $166.2 billion in economic activity every year, $63.1 billion in spending by organizations and an additional $103.1 billion in event-related spending by their audiences. That all leads to:5.7 million full-time-equivalent jobs$104.2 billion in household income$7.9 billion in local government tax revenue$9.1 billion in state government tax revenue$12.6 billion in federal income tax revenue Source: Americans for the Arts

    At the same time, the educated are receiving far more of the country's income than ever before. People with a college degree have always made more, on average, than high school dropouts. But the gap has widened dramatically. According to Bureau of Labor Statistics data, wages for anyone with less than a college degree have stayed flat or fallen since 1979. College grads have seen their income rise steadily. In the current economic downturn, unemployment is nearly 15 percent for high school dropouts, but only 4 percent for college grads.

    All this data points to an appealing argument in favor of arts entrepreneurship: The arts attract the educated, and the educated make more money. That means many arts-related businesses should profit, and so should municipalities, through higher tax receipts; developers, through more expensive homes; and all sorts of higher-end shops and restaurants, by locating near the cultural amenities that better educated people enjoy. Public officials and private-sector businesspeople might then stop looking at arts projects as charity and see them more as smart investments that attract the most appealing residents. Arts entrepreneurs are likely to find far more sympathetic ears among community leaders, who are more likely to offer tax incentives, lower rent for arts-related businesses in new developments or other mutually rewarding partnerships.

    Omaha's success story won't be repeated everywhere. Places like Manhattan, San Francisco or Los Angeles have so much art already that any additional project isn't likely to make much of a difference or get city leaders too excited. However, these cities have such large populations of increasingly well-paid arts lovers that arts-related businesses might not even need the help. Yet other towns and cities are so art-deprived that they have a very long way to go.

    Officials in remote Demopolis, Ala. (left) and Chillicothe, Ohio, would love to attract arts entrepreneurs. Photo© Marvin E. Jones (left) & Photo© Billy Milstead

    The idea of attracting the "creative class," made popular by author Richard Florida, has become trendy in economic development. I've spoken with officials in places like remote and tiny Chillicothe, Ohio, and Demopolis, Ala., who imagine that if they could just attract a couple cool businesses, the young, successful folks would pour in. It seems fair to predict that won't happen soon--though local leaders might give arts entrepreneurs almost anything they ask for to lure them there.

    There is, clearly, a dark side to this new economic reality. There is, painfully and simply, far less demand for Americans without education. The American dream always meant that anybody willing to put in a hard day's work could make a decent living. That's just not true anymore for people without at least some post-high school education. It's not a small group: Around 80 million Americans over the age of 25 fall into this category, and they are disproportionately represented in exactly the parts of our country underserved by the arts, such as inner cities, Appalachia and many other rural counties in the Deep South and on Native American reservations. It's easy to imagine a future in which businesses and arts groups simply ignore the needs of this huge and fragile part of our country. They are increasingly broke, increasingly isolated and they are the group hardest to attract to arts events.

    Or, it could work the other way: Newly flush arts projects could use their surplus to expand their offerings and reach audiences they never have before.

    The Data Dilemma
    It's notoriously difficult to get clear, reliable statistics on arts-related businesses in the U.S. Put simply, we really don't know what's going on. The Department of Labor's Bureau of Labor Statistics--which gathers the most comprehensive data on what Americans do for a living--lumps all arts in the broad category of "arts, entertainment and recreation," which includes ballet companies, casinos and fitness centers; and artists make up a tiny portion of the group.

    Actors and dancers make up 1.4 percent (26,000 people), much smaller than, say, the number of security guards at entertainment venues (39,000, or 2 percent) or amusement park and recreation facility attendants (a huge 166,000, or 8.5 percent). Museum workers are lumped together under "museums, historical sites and similar institutions," which includes a large number of security guards, again, janitors, cashiers and a tiny smattering of curators. The national numbers for artists are tiny; the local numbers are so minuscule that they are close to statistical irrelevance.

    Many other arts-related businesses are lumped under other categories--a coffee shop that sells local artists' work would only appear under the food concession category; a boutique gift store selling original artwork would be under retail. To make the statistical picture even fuzzier, arts workers tend to be young, itinerant contract employees who rapidly switch from job to job, industry to industry. Much of the most interesting artwork done in the U.S., of course, happens in people's studios or in small DIY performance spaces where what little pay artists receive is in cash and largely invisible to official measures.

    There are other sources of data: The National Endowment for the Arts funds a host of academic surveys, and some foundations conduct their own research, but all of them have to make arbitrary judgments about crucial issues, such as the big one: What, exactly, is art? Another crucial, but unanswerable question: What is the difference between art and commerce? Should we count a big, commercial show on Broadway as art or commerce? How about a show-tune revue at Disney World? What about a topless dance act in Vegas--is it only art if there's a live orchestra and some feathery headgear involved? Is a bookstore more like an art gallery or more like a hardware store? For that matter, is an art gallery more like a museum or a Walmart?

    All these measures seem to have a bias toward bigger, more official arts businesses in larger cultural capitals. They definitely include the Metropolitan Opera or the Metropolitan Museum of Art. They don't count some awesome blues clubs in the Mississippi Delta (which are classified under "food services and drinking places"). And they completely ignore the self-taught artist down the road selling his handmade sculptures out of his garage. --A.D.

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