From the performing and fine arts to fashion, the arts bring people together, employ many, and assist in elevating the social and cultural lives of those within any community. Unfortunately, as rents in Boston and the surrounding areas are skyrocketing, New England runs the risk of becoming increasingly less appealing to artists who would otherwise opt to call the region home. To sustain a thriving local arts community and its contributions to the local economic and social fabric of any urban community, affordable workspace and stable affordable housing are key.
Enter an inventive approach in the Merrimack Valley at Lowell's Western Avenue Studios & Lofts, which was recently purchased by the Arts & Business Council of Greater Boston. With hundreds of artist studios, live/workspaces, and a brewery, café, and gallery, the complex represents an innovative effort to preserve affordable housing and workspace for members of the creative economy.
The Economic, Social, and Cultural Significance of Western Avenue Studios & Lofts
The preservation of affordable housing and artist workspaces at Western Avenue Studios & Lofts exemplifies the main street impact of community development lending (CDL).
As explained by Pamela Feingold, Senior Vice President and Group Director of Eastern Bank's Community Development Lending Group, community development is something that makes a real difference in people's lives. "Affordable workspace and housing are essential to keeping our local economy thriving and growing," she said. "Through a collaborative financing model with our community partners, the Western Avenue Studios & Lofts building will be preserved, and rent for many small businesses and practicing artists will be kept affordable."
While there is growing discussion about the rent crisis and a recognized need for a thriving arts community, there is far less discussion around how to address them with an integrated approach. That was the realization by the Arts & Business Council and Executive Director Jim Grace after a decade of research. In reality, the vast majority of artists and small creative businesses, despite their outsized impact on culture and society, often are strapped for cash or have limited access to the capital needed for long-term space investments. This community's income faced significant loss during the pandemic, as a study from Boston Indicators demonstrates, and many continue to struggle amid rising material costs and unaffordable rents.
Western Avenue Studios is the single largest example of a new solution to a problem that is increasingly being encountered. It is the second investment as part of the Arts & Business Council’s broader initiative—The Creative Campus. The initiative serves as a regional platform for working with local communities for the purchase and development of real estate to stem the continuation of chronic destabilization for a historically underserved sector—the creative community.
Getting the Western Avenue Studios deal to work required expert assistance, as well as capital, and the Arts & Business Council couldn't do it alone. Turning Western Avenue Studios & Lofts into what it is today necessitated looking outside the box, but also balancing that vision with a sense of reality regarding the complex mechanics at work. That's where Eastern Bank’s experience came in. Eastern's $14 million loan was instrumental as the primary source of capital, but so was a creative approach to the deal, which was informed by its decades of leadership in CDL.
Eastern combined its financing and experienced guidance on a collaborative lending model, with its deep community-focused mission on doing what’s right to help communities prosper. Led by Relationship Manager Johanna Stone, Eastern Bank pioneered a financing model that enabled coordination between the building’s seller, BlueHub Capital (as another key source of financing), and, of course, the Arts & Business Council. Through an understanding of the unique economics at play and aspirations at hand—as well as knowledge of the reality that, in affordable workspace and housing, a certain size is necessary to make a deal work—Eastern ensured that everything came together. It also looked to other areas beyond the numbers, taking the time to understand the building and its business model to create a solution.
Community Development Lending Strengthens Our Shared Culture, Goals and Future
Grace specifically praised Eastern's efforts, saying, "As a community bank with a specialty in community development lending, Eastern had the experience needed to understand the unique economics at play and build the collaborative financing model needed for this project to succeed. As a result, we expect artists in Lowell to have affordable and secure spaces to live and work for generations to come, sustaining a vibrant and active role of the arts in this community."
However, Grace is not content to let this accomplishment rest on its laurels—his ambitions reach much farther. For Grace, this development could help pave the way for a real estate investment fund specifically oriented to identifying and preserving similar buildings across New England that can offer affordable artist studio and living space. Indeed, the success of this project paints a clear picture of how to develop a future New England that is more equitable, diverse, socially and culturally vibrant, and economically viable through the arts.
In the end, several areas of expertise were needed for this project to happen: flexibility in thinking, creativity to take a unique financing model through to completion, and bringing together partners in the real estate, banking and nonprofit sectors. Through this innovative approach, Eastern Bank helped make a big dream into a reality and laid the foundation for a new model of community development for creatives and the arts.
Home to more than 350 artists, Western Avenue Studios & Lofts is a hub of creative small businesses and the arts community. Check out their upcoming events and join in. Learn more about Eastern Bank's approach to community development lending here.