How Art Can Anchor a Local Economy

Written by Amanda Maher

The term “anchor institution,” has typically been used to refer to large, place-based organizations such as universities and hospitals. Yet, religious institutions, municipal governments, community foundations, sports teams, arts and cultural organizations and major corporations are often large employers, purchasers and real estate owners. At ICIC, we believe these anchors can also transform local economies.

Through most of the 18th and early 19th century, North Adams, Massachusetts had a booming industrial economy.  But by the mid-1980s, most manufacturing companies had downsized or relocated. With an unemployment rate more than double the state-wide average, and poverty approaching 20%, the city – not unlike many post-industrial cities – searched for ways to redevelop the vast industrial complexes left behind.

Not far from North Adams, in Williamstown, Massachusetts, the director of Williams College Museum of Arts was contemplating opportunities to display large scale works of contemporary art. He approached the City of North Adams to propose reusing a vast, 26-mill complex as a new art museum. It seemed unconventional – would people really travel all the way to North Adams, three hours from Boston and nearly four hours from New York City, just to visit a museum? At the time, there was little else to draw tourists to North Adams.

An aggressive fundraising campaign, which included significant support from the private sector, led to the opening of the Massachusetts Museum of Contemporary Art (MASS MoCA) in1999. Not only does the museum draw 160,000+ people each year, but it has also served as a catalyst for development throughout the city. MASS MoCA has attracted other artists, musicians and members of the maker community that tap into the museum’s creative culture. It is estimated that the museum has a $20+ million economic impact on North Adams annually, with people traveling from across the U.S. to attend performances, festivals and galleries—all while staying in newly developed hotels, eating at locally-owned restaurants and buying goods from local vendors.

Newark, New Jersey implemented a similar strategy. Devastating riots in the late 1960s had driven people from the downtown core, and businesses followed suit. By the late 1980s, the City was struggling to create and retain local jobs. At the same time, then-Governor Thomas Kean had appointed a committee to address the need for a New Jersey-based performing arts center (NJPAC). Newark – a city with great transit accessibility and proximity to New York City – was chosen, primarily as an attempt to revitalize the struggling city. To ease lingering racial tension, the committee implemented minority hiring benchmarks, and asserted that “diversity would be a reality and not just a goal.” Of the estimated 1,000 construction jobs created, 46% went to the local minority community.

Since it opened in 1997, more than five million visitors have taken in the NJPAC’s 400+ events each year. Workshops for local teachers, a theater series, a dance academy and after-school training for young musicians serve thousands of Newark residents. In short time, the NJPAC spurred additional economic development, including a new 20,000 seat arena for the New Jersey Devils hockey team, new restaurants, two 35-story office buildings and numerous infrastructure improvements. The performing arts center continues to recruit a diverse workforce, where some of the best jobs at the facility are stage-hand positions where employees can earn up to $125,000 per year. The result of a union agreement, now 47% of stage-hand jobs are held by minorities.

What these examples highlight are the economic benefits that cultural organizations can have on their local communities. In each case, these were two brand new “anchors,” very different than traditional anchor institutions that have often been rooted in a community longer than any of its residents. What these anchors each did well was to engage their local communities from the outset in order to gain resident buy-in and expand local impact. As a result, MASS MoCA and the NJPAC are helping to reshape their respective communities’ identity, as cities with vibrant arts and creative cultures worth other businesses investing in. And other businesses are doing just that.

Learn more about how to measure the shared value of anchor institutions.

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