Funky Places

The downtown warehouse arts district faces an uncertain future

Tucson politicians for years have been enthusiastic cheerleaders of the downtown warehouse arts district. When it comes to talking up the preservation of these 50 or so privately and publicly owned buildings, clustered near the railroad tracks west of Fourth Avenue, they have given some inspiring speeches.

However, when it comes to taking action to support the enclave of artists who have kept the district's studios and galleries alive, these same elected officials have done little. City Hall's actions have led to little public funding for the district, continued deterioration of the historic buildings (plus the occasional demolition), and an overall decline in art space.

Despite that less-than-impressive résumé, district artists continue to count on the city for help. This time around, they're focused on an item scheduled for discussion on Sept. 17 by the City Council's downtown subcommittee.

This issue involves a proposed swap between the city and the Arizona Department of Transportation (ADOT), which acquired some of the warehouses in the 1980s for a road project which was never implemented. After renting the buildings out cheaply to artists for many years, ADOT is now negotiating with the city about trading 15 or so buildings for municipally owned land.

Both sides report that progress is being made toward reaching an agreement. However, because appraisals are now being prepared for the properties involved, an actual agreement might not be achieved for a few more months.

Sometime after that, an agreement could lead to another transfer, putting the affected buildings under the ownership of a local nonprofit group made up primarily of artists and gallery owners: the Warehouse Arts Management Organization (WAMO).

Looking for implementation expertise and financial support, WAMO has held discussions with the Portland, Ore., company of Williams and Dame, along with local developer Ron Schwabe, of Peach Properties.

Williams and Dame are well-respected urban developers who work primarily in Oregon. Schwabe has earned a reputation as a landowner who can successfully renovate and market art space. The two companies recently collaborated on the rehabilitation of downtown's Martin Luther King Jr. apartment building and are looking forward to more mixed-use projects in the area.

John Laswick, a former city employee and longtime supporter of the warehouse district, applauds WAMO's potential relationship with the two firms.

"I cannot emphasize how critical this partnership is," Laswick writes in an e-mail. "... I have waited 20-years for an opportunity like this and do not expect another one in much less time. Everything is in place to have a good development partner, get the buildings cheap and achieve the vision of the warehouse district."

Several others with a stake in the area share Laswick's optimistic outlook--as well as his fears that if something isn't done now, it may be too late for many of the buildings, some of which are a century old.

"Do we want another 20 years like what it is right now?" asks artist Susan Gamble, president of WAMO. "It's time to do something positive here."

Adds architect Bob Vint: "The warehouse district is irreplaceable. It conveys a sense of time and age. We need funky places."

According to a 2003 survey of artists and others (including Dave Devine), "funky" and "affordable" were two important characteristics of the district which need to be retained. Following this survey, the City Council adopted a master plan for the district in 2004.

After that high point, numerous aspects went downhill. For safety reasons, artists were evicted by ADOT from two warehouses, and a few other buildings were demolished by the city. This year, the City Council approved plans for a new four-lane roadway to cut through the area.

Despite that history, Schwabe thinks positively. "Tucson has such a phenomenal chance to sustain an artist influence and presence in the warehouse district," he says.

"When the ADOT buildings are turned over to the city," Schwabe says, "and if things can be structured so a nonprofit like WAMO could manage them, then there can be incubators for artists in the district. ... I don't know how many people in town know how special this is."

After the Sept. 17 subcommittee meeting, it should become clearer what sort of control WAMO might have over the warehouse buildings. Gamble is sure of one thing: "Williams and Dame's role," she insists, "would be in construction. They wouldn't have an ownership role."

Instead, WAMO is exploring three ownership scenarios of the buildings. The first would be a community land trust under which the group would only own the property beneath the structures.

"I'm interested in the land-trust idea," indicates architect Corky Poster, whose firm prepared the warehouse district master plan. "It might be a good model to maintain long-term affordability in the district."

Under this alternative, after restrictions were placed by WAMO on potential uses of the buildings, the warehouses would be sold to private owners. It would be the buyers, not WAMO, who would be responsible for maintaining the structures and setting their rental rates, thus fulfilling the goal of a community land trust to preserve affordability in perpetuity.

Having WAMO own the warehouses, but allowing the board to sell some of them, is the second model under consideration. It would permit the group to raise at least a portion of the money needed to restore and maintain the remainder of the buildings.

A few artists now renting from ADOT have indicated a desire to own their own spaces, and members of WAMO's board of directors have expressed support for them. But as Natasha Winnik, a warehouse owner herself, explains: "Individual ownership depends upon who owns them and what use they put the buildings to."

Under the final ownership alternative, WAMO would possess all the buildings, thus eliminating concerns about inappropriate uses. However, this option would also require WAMO to take on the substantial financial and managerial responsibilities for the restoration, maintenance and operation of the old buildings.

Williams and Dame has been working with WAMO for the past several months to formulate a successful plan for overseeing the buildings in the district that are currently publicly owned. At a recent WAMO meeting, Matt Brown, project manager for the firm, presented a detailed checklist outlining how they would like to proceed.

Indicating his company hopes to receive an "exclusive negotiating agreement" from the city, Brown explained one of the purposes of this proposal: "We want the city to confirm that they won't give the properties to someone else," he said.

Once this WAMO-endorsed agreement is in place, an implementation plan for restoring, renting and maintaining the warehouses would be prepared. During this extended process, the buildings would be owned by the two development firms, but eventually transferred to WAMO.

At the same time, Williams and Dame, along with Schwabe, have major plans to privately develop what they call a "future neighborhood" in the downtown area on either side of the railroad tracks.

"We're envisioning mixed use for our development in downtown, creating a typical urban neighborhood with shopping, dining, housing and green space," Brown says, "but that will come after the (warehouse) district itself is secured."

Referring to the WAMO artists and his firm, Brown continues: "We have a common vision. For those of us interested in other downtown projects, we see a healthy arts district as a big draw for redeveloping the buildings we own around it."

Brown hopes to have a final draft of the exclusive negotiating agreement completed by November; the transfer of the buildings' ownership from the state to the city to the developers would occur sometime after that.

Another alternative for ownership of the warehouses, one which is rejected out of hand by almost everyone involved, is having ADOT auction them off to the highest bidder.

"The buyers might raze the buildings and put in the hottest thing right now: self-storage units," Gamble explains. "We can't give up and risk going to auction."

One of the other three ownership models, or a combination of them, will eventually be chosen by WAMO and discussed with the City Council. Whichever option is finally selected, the hurdles WAMO will have to overcome are enormous and complex.

Those hurdles begin with the expense of restoring and maintaining the historic warehouses. Over the years, a number of officials have done estimates on the costs of renovating the buildings to satisfy modern safety and structural codes. The prices range dramatically, but one thing is clear: At least some of the buildings are in extremely rough shape.

"Right now, the Steinfeld Warehouse is physically in trouble," admits woodworker Bob Robles, a former longtime tenant of the building which is considered the flagship of the district. "When we were in there, we had to put money into the roof in order to stay dry, and the sewer line was collapsing because of age, so we had to use Porta-Johns."

The Steinfeld Warehouse has been vacant for the past year because of state and city actions, so those problems have certainly intensified, since the building isn't being maintained. But even before the artists were evicted, the cost estimates of upgrading it were substantial.

In April of last year, Poster's firm estimated structural improvements to the building, plus a 20 percent contingency, would cost more than $1 million. Other repairs, such as upgrading the heating and cooling system, would add an additional $400,000.

For the imposing Citizens Transfer warehouse across the street, the estimate was $447,000 to meet building code and safety requirements, and another $254,000 for other items.

Calculating a grand total of rehabilitation costs for all the state-owned warehouses that could be transferred to the city and then WAMO is just guesswork without a thorough professional analysis. However, a good, conservative guess--after researching past estimates by contractors and others--reveals an amount in the $3 million range.

How would this bill be covered? Brown from Williams and Dame lists several potential sources of revenue, including tax credits, bond funds and money from the Rio Nuevo downtown redevelopment district.

Tax-credit programs, though, are highly competitive. As for Rio Nuevo, when the City Council recently allocated the money, the warehouse district received no earmarked funds, even though a portion of the district lies within the area's boundaries.

This type of inaction places the burden of making the warehouse district a success squarely on WAMO's shoulders. With Williams and Dame ready to offer their expertise, Brown acknowledges that there will almost certainly be a funding gap between whatever financial resources can be identified and the amount needed to rehabilitate the structures.

That gap, of course, could be closed in a variety of ways. Raising artists' rents is the most obvious, and least desirable, option to WAMO.

"We hope to avoid gentrification," Brown told the recent WAMO meeting.

When asked how Williams and Dame planned to do that, a principal of the firm, Homer Williams, summed up the plan succinctly. "We will make money around you, not off you," he said.

But Williams also admitted to the artists: "The rents will never be low enough for everybody. It will be a 'come to Jesus meeting' when we have all that information (on rents to discuss)."

Compounding this problem is the fact that since the city took over management of the Steinfeld Warehouse last year, the city has generated no money for its repair. That's led some artists to worry that the building, which dates back to 1907, could simply fall down before it can be rehabilitated.

Even if that incalculable loss can be prevented, a host of other hurdles must be overcome in the warehouse district. One immediate issue is what conditions, if any, ADOT will place on the buildings once they are transferred to the city.

After he was evicted last year by the state from his mineral-showroom warehouse at Stone and Toole avenues, Zee Haag wanted to buy the building for $230,000 and then restore it. He entered into an agreement to do so, and the City Council ratified the deal one year ago.

Surprisingly, ADOT then denied the proposal. Relying on an opinion from the Arizona Attorney General's Office, Transportation Department officials concluded the transaction would not satisfy the "public purpose" requirement for disposing of ADOT properties without auctioning them off to the highest bidder.

In response, Haag submitted a $2 million claim against the city and state. The city denied it, but a lawsuit has yet to be filed in the case.

In the meantime, Zee's former place of business for 16 years sits abandoned and deteriorating.

Transferring all the ADOT-owned warehouses to the city in exchange for land, however, will apparently eliminate the "public purpose" problems. Indications are that neither ADOT nor the Attorney General's Office will care what the city does with the buildings once it obtains them.

Thus, if he's interested, it's possible Haag could still end up buying his building from City Hall, or even WAMO. Once the state-owned properties have been transferred to the organization, officials from the development team appear to have no problem with that arrangement.

"Our intent is to keep the properties intact until they are transferred to WAMO's control," Peach Properties' Schwabe explains. "They need the critical mass to negotiate financing and to have the city on board for master planning in the district. ... After that, if it fits their plan to sell any of the buildings, it makes no difference to us."

Another important issue facing the warehouse district is its shrinking size. In July, the City Council approved the alignment of the Downtown Links project, a roadway which will connect the Barraza-Aviation Parkway to Interstate 10.

Construction of the parkway will result in not only the demolition of a half-dozen artist-occupied warehouses--including Lucky Street Studios, the Mat Bevel Institute and Winnik's business--but also negatively impact other buildings in the area. One of those is the immense Tucson Transfer warehouse at Sixth Street and Seventh Avenue, currently home to the Benjamin Plumbing Supply Company.

"With a major thoroughfare right next to me," reflects Mark Berman, owner of Benjamin, "that makes backing semis into the property impossible."

Because of that problem, Berman doesn't see how he will be able to continue to operate the business once roadwork begins. "I bring high-end customers here, have 30 employees and pay lots of sales tax. I want to be here."

In response, the city's Department of Transportation notes in a written statement: "We have met with Mr. Berman and his architects on a number of occasions. Now that we have a final alignment (for Links), we hope to continue our dialogue to resolve this issue. We believe there may be a number of options to explore that will address this access issue."

In the months ahead, another hurdle to overcome will be keeping the warehouse district space "funky and affordable."

Downtown gentrification often leads to upscale development, which is not in and of itself a negative, but it frequently has the effect of driving rents up and artists out. Though that was by no means Williams and Dame's goal in Portland's Pearl District, it turned out to be the reality.

"It (the Pearl) used to be a warehouse district," remarks Sue Fleishman, who moved to Portland from Tucson a number of years ago. "Today, it is very clear that the artists, most, if not all, have moved elsewhere. ... The kind of emerging arts scene that was there is no more."

Jeremy Tucker operated an art gallery in the Pearl District for almost 13 years before high rents forced him to relocate some time ago to a nearby area. Now he is going out of business entirely.

"I can't afford to keep my gallery open anymore," Tucker laments. "I've been affected negatively by the real estate values going up. A lot of times, income doesn't go up with it. But on the positive side, there are now people with money living nearby who can afford to buy art. It's a trade-off."

For his part, Williams and Dame's Brown thinks Tucson can avoid the problems which artists experienced in Portland.

"It's true that artists were displaced in the Pearl because development was so successful," he acknowledges. "We have a chance in Tucson to plan and try to minimize displacement ... The key is that we're willing to help the nonprofit WAMO, and the goal here is for them to be the owner."

But can a "funky and affordable" warehouse arts district survive if it is adjacent to a new, high-density, upscale development? Or will it eventually become like the property around it?

WAMO members have worked diligently for years to protect the warehouse arts district. They are dedicated to maintaining their enclave, which was once a nationally known success story. But years of structural neglect, combined with mixed signals and almost no funding from City Hall, have taken their toll.

Given that, can WAMO preserve the integrity of at least a part of the district without losing the artists who have given it its character?

This question has stymied other communities seeking to save a warehouse district while redeveloping their downtown. Plus, not everyone is convinced that gentrification is automatically bad for the arts.

Portland artist Daniel Kaven believes that artists have benefited from the Pearl's transformation. "Do cities want to subsidize a community for starving artists, or a working community for functional artists?" he asks. "Some artists might have been moved out of the Pearl, but what were the options?"

On Sept. 17, the three members of the City Council's downtown subcommittee--Nina Trasoff, Steve Leal and Regina Romero--will have a chance to consider Tucson's options. They can choose to support a new era for the warehouse district when they review the transfer of the ADOT-owned warehouses to city control.

At the same time, keeping the district affordable should be a central goal. "Otherwise," says Dwight Metzger, who operates a print shop in the district, "we could find ourselves down the road with buildings that none of us can afford to rent."

If all the city does is act as a pass-through for the publicly owned warehouses, it will be putting a huge responsibility on WAMO.

The leaders of that organization, along with the private sector, have committed to investing both time and money. In the view of many warehouse district supporters, it's now time for the city to step up and commit financially as well.

Such initial funding could stabilize the historic Steinfeld Warehouse. This step alone would reassure the community that Tucson's future will not be purchased at the expense of its past.

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