Wednesday, September 30, 2009

LA Beats NYC

It's something we've been calling for here for, oh, almost a year now: some developer unable to fill new commercial spaces renting them very cheaply (or free) to young art dealers who will bring in the sort of clientele those developers are already trying to attract. With the commercial vacancy rate in New York hitting a 13-year high, one would think the symbiotic sense of such arrangements would strike some developer in Manhattan like a bolt of lightening, but, alas, to date the best the culture capital of the US has managed (and I don't mean to diminish this fantastic effort, but it's not quite the same idea) is the public park project LentSpace.

In Los Angeles, though, this exact model has already been put in place. Artinfo.com explains:
The Pacific Design Center, a design emporium featuring 130 showrooms, will launch its Design Loves Art initiative tomorrow, allowing art galleries to take over vacant commercial spaces in its sprawling building — sometimes referred to as the "Blue Whale" — for the next six months rent-free.

Some of the galleries participating in the project have permanent locations elsewhere in Los Angeles, while others are using the space as an opportunity to reopen their doors after being forced to close. The only cost to gallery owners is a 10 percent cut of any sale to the Pacific Design Center.

A 10-percent cut of sales is a good deal in exchange for no rent (especially in the current sales climate). Of course what happens when the six months end (and that's about how long it takes to achieve awareness of one's new location, so) is a good question. Can the galleries remain there and start paying rent? Will they be chucked out?

As tough as it is for commercial galleries at the moment (ahem), even a temporary break in rent can make a huge difference in what they're able to do for their artists.

I had a conversation with a young dealer in Berlin, where there are upwards of 600 galleries, despite there being next to no collector base in the city. She told me that the "crisis" (as they ubiquitously refer to what we here in the US call the "downturn" or the "recession") has had very little Darwinist effect on the scene there. They've seen nothing like the number of closings New York has, for example. It costs a gallery next to nothing to stay open there. The main reason, of course, is the vast number of huge (and not so huge) available spaces, meaning supply outstrips demand and rents reflect that.

With a 13-year high vacancy rate in New York, one would expect landlords to reflect that reality here too, but anecdotal evidence from gallery friends suggests most Chelsea landlords are sticking to their current rates. And rents in the Lower East Side aren't any better from what I hear.

They predict the economy in the US is going to pick up at a much slower rate than it will elsewhere in the world, especially Asia. This probably means it's going to be a long time before New York galleries see a normalization in the art market here. I can't tell you how much respect I have for the kind of guts and determination it takes young dealers to sweat things out at the moment. The personal sacrifices some of them are making are huge, and inspiring. I do wish, though, that some developer would look to the West and realize the opportunity they're missing.

Image above:
Joy Garnett, "Closings (Chelsea) 79," 2009. Used with permission. See the whole series here.

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16 Comments:

Blogger CAP said...

The 6 month window does seem a bit short. But maybe that can be extended?

How about making it dependent on Pacific Design finding paying tenants or announcing their own plans for future use?

9/30/2009 09:10:00 AM  
Blogger Brent said...

The depths of the real estate crisis had one of it's epicenters in LA, forcing landlords to realize without some sort of creativity, the city blocks they may own may become blighted and never recover (The downturn in the early 1990's in Northern California has had swaths of nice development permanently take a turn for the blight.).

In NYC I believe the Chelsea landowners may not feel the same way and think that in Manhattan isn't going to be subject to it.

9/30/2009 09:31:00 AM  
Blogger Edward_ said...

any sense of the percentages, Brent?

13% seems high for Manhattan, but how does that compare with LA?

9/30/2009 09:45:00 AM  
Anonymous Anonymous said...

I love Joy Garnett's photo series, and wanted to point out that it relates very well to artist Kim Beck's drawing series of for sale, for rent, etc. signage.

Beck is creating a drawing installation entitled "Everything Must Go!", which will be viewable in the ground floor and first floor windows of 531 West 26th Street beginning October 13, 2009 (through December 13, 2009). You can see a sample of this series here: http://www.idealcities.com/signs.html

9/30/2009 11:04:00 AM  
Blogger Joanne Mattera said...

It is ironic on the heels of Mrs. Obama's recent art-is-essential speech that the basic elements of artmaking and art showing (studio space, gallery space) remain unavailable, or onerously expensive, for so many people, and that help in the form of grants or institutional support is never quite within reach for most.

9/30/2009 11:20:00 AM  
Blogger Brent said...

http://latimesblogs.latimes.com/laland/2009/04/commercial-real-estate-office-vacancy-rates-high-and-higher-.html

This article says it is nearly 30%

9/30/2009 12:49:00 PM  
Anonymous David said...

We're still waiting for the folks at the Blue Whale to expand their program to include studio space for artists. Probably a bit too scary for them to consider.

9/30/2009 05:55:00 PM  
Anonymous Anonymous said...

I think it's an interesting time to reconsider the very notion of agency. In what was once a superheated art economy it made sense for someone fresh out of Hunter to hang a 36 inch-square canvas on the wall for ten thousand dollars. No one ever questioned the sensibility of such a price tag because the galleries were pulling their weight. No one ever questioned the fact that a gallery, with its rent, its staff, its databases and utilities were, functionally, taxing the art market. If an artist in an agent-less market needs 1000 dollars for a piece to sustain existence in the studio, it carries a price tag of eight times that in a 25th street gallery. I wonder how much different this is than taxing luxury cognacs coming in from France...except with art the factory is only six miles away from the port and accessible on the L train...and every collector knows it. Galleries might have to learn to be more creative as go-betweens if they want to sustain themselves.

9/30/2009 06:33:00 PM  
Blogger Edward_ said...

The "taxing the art market" notion seems clever until you remember the 25th street gallery lends credibility to an artist, helps contextualize the work through solo and group exhibitions, provides services to the collector and artist, and continuously promotes the artist in ways it would bankrupt most emerging artists (at least in time) to try to do themselves as effectively. One successful solo exhibition or art fair can change an artist's fortunes. How can an agent-less artist achieve that as easily?

Pricing in a gallery is not merely a calculation to cover the rent, staff, databases and utilities, it's also taking into account true value added and services that many artists often cannot provide as well if they're focused on their studio practice.

A dealer puts their experience, their reputation, and their money on the line in declaring artwork worth the world's attention. An agent-less artist will have a much more difficult time gaining such credibility.

To be honest though, I resent having to reiterate this in a post that acknowledges how difficult things are at the moment. I'd probably respect the sentiment more if it wasn't offered anonymously too. (Actually, it's laughable that someone suggesting galleries are parasitic would still worry enough about offending galleries to only do so anonymously, but, alas...)

9/30/2009 07:19:00 PM  
Anonymous Franklin said...

Used with permission.

I thought she wasn't into that.

9/30/2009 07:49:00 PM  
Blogger Edward_ said...

Heh!

I suspected even as I was writing it that it might elicit just that response.

Joy didn't ask for it. Just seemed an easier way to point folks to the whole series...probably was confusing though, I'll admit.

9/30/2009 07:58:00 PM  
Blogger joy said...

LOL

9/30/2009 08:23:00 PM  
Anonymous Anonymous said...

"....in Berlin, where there are upwards of 600 galleries, despite there being next to no collector base in the city."

That is a curious state of affairs. While rents are certainly cheap, and occasionally free, it still costs money to keep a space open, not least the opportunity cost of the gallerists' time. While it is true that some of the more blue chip Berlin galleries have an international client base (this is probably true everywhere) it's hard to understand how hundreds of emerging-to-mid level galleries can exist without any home grown collectors.

9/30/2009 10:28:00 PM  
Blogger bgfa said...

The vacancy rate in Los Angeles for commercial space is NOT 30%. That number refers only to some small sub-market elsewhere in Southern California, and references Class A office space, a totally different animal. Gallery space is generally retail, not office.

Los Angeles City is in much better shape than the outlying areas. In the city, the commercial vacancy rate varies widely by district. The areas where there are galleries do not suffer from such high vacancies, but the economic climate does have an effect on what landlords can charge.

Also, rents in Los Angeles for retail space are generally very reasonable, at least compared to New York. Monthly rental rates range from $1 to $2.50 per month per square foot. In many gallery districts, early arrivals pay less than $1 per foot. This is why we are seeing far fewer closings, in fact we have seen some growth in some areas as galleries move and/or take advantage of deals.

The problem with the Pacific Design Center is a total lack of any walk-in traffic. The galleries there depend solely on special event traffic, and some do not even bother to staff the spaces on a daily basis. The Center is building a third building, and the disruption is affecting their occupancy, along with the slow economy—but the owners are art-friendly. PDC has the design branch of MOCA on site in its own small building.

10/01/2009 01:08:00 PM  
Blogger Joseph Giannasio said...

Gee Ed. You're holding out about your power lunches with the mayor.

New York City to Give Public Space to Artists, Bloomberg Says

By Henry Goldman

Sept. 30 (Bloomberg) -- New York City will create an economic development program for its “cultural sector,” offering public space for exhibits and performances, business education and job training for institutions and artists, Mayor Michael Bloomberg announced.

-Bloomberg.com

10/01/2009 08:50:00 PM  
Anonymous Anonymous said...

gallery/artist relationship is a fair exchange. most artist have never run a buisness.

10/06/2009 02:00:00 PM  

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