A reminder to all that 4Culture’s offices and Gallery4Culture will be closed this Friday, July 2 for a staff furlough day, and Monday, July 5 in honor of Independence Day.

A full list of  4Culture furlough days can be viewed here.

2009 Individual Artist Projects Recipient, Chris Engman, Object, Shadow, 2009, Inkjet print

Like all organizations, the recession has taken a toll on 4Culture’s revenue stream. 4Culture’s funding programs and levels of giving to the field are highly dependent on King County lodging taxes. Nationally, the hotel/motel industry is mired in the worst downturn in 50 years. On average, lodging occupancy is down 20% in 2009 compared to 2008. Seattle fares a little better than many communities, but occupancy is still down by 17%. Room rates are lower, further eroding revenues.

In the Helicon Collaborative study produced in February of this year, our constituents in the field strongly recommended that funders be candid about keeping “grantees up to date on the options funders are considering and the allocation decisions they are making.”

So here goes:

4Culture will potentially have a 1.5 million dollar gap in our funding sources in 2010. We’ve been able to track the lodging tax returns and were able to anticipate this beginning last spring. We’ve been strategizing ever since. We took a good look at our administrative budget, and were able to cut many costs earlier this year. By doing so, are currently on track to underspend our approved 2009 operating expenses by a third this year, saving us approximately $250,000 that we can put toward next year’s programs. We also have tried to be strategic about investing staff time in efforts that could garner more funds for our constituents. For example, we applied for and received $250,000 in federal job stimulus funding to re-grant to our constituents in King County (beginning this year and going into next.) We recently made the decision to implement staff furloughs in 2010. Through this and a variety of other initiatives, we have identified an additional $250,000 we can apply toward the gap.

Even with all these efforts, we are still left with approximately 1 million less to distribute next year through our ongoing programs and have more choices to make. Our charter gives us a certain amount of flexibility with how much funding is allocated to specific programs. For example, we can preserve the amount of funding we have to offer in our arts and heritage operating support programs (sustained support) but by doing so, we will have to reduce our facility/equipment programs for the year. Another example: The arts program has one pool of money this is split between projects for groups and individuals. With fewer dollars, we’ll need to decide how much should go to individual artists and how much to groups who apply through this program.

Another question we’ve been weighing is: should we use reserves this year? Our reserves are interest income generated by the endowment we’ve been building since 2001, as mandated by state law. Unless the efforts to extend the use of lodging taxes for cultural programs is passed by the state legislature within the next three years future arts and heritage funding in King County will be entirely reliant on the funding generated from the endowment interest income. In other words, any reserves we use today will reduce the size of the endowment we may have to rely on after 2012, and reduce future funding.

The 4Culture Board has some decisions to make in the next month as we finalize the 2010 budget. Faced with trimming our programs, we have been turning to our citizen volunteer advisory committees to help guide us in how to prioritize funds for next year. (And of course, if you have thoughts to contribute, feel free to comment on the comments field below.) In the past, the board has chosen to prioritize and maintain steady levels operating support, and preserve funding for individual artists when times are tough. For the heritage community, we remain committed to funding Collections Care and Sustained Support. We will offer the Landmark Challenge grants in our preservation program at the same level as 2009. We may choose to postpone the deadline for Cultural Facilities Program, which would typically occur in January. The board also recently renewed a resolution stating that “the extension of the lodging tax to support cultural programs in King County is the highest priority of 4Culture.” This gives them the authority to continue to advocate on behalf of the field in the coming year with the goal of strengthening the revenue stream for cultural programs into the future.

The recession is affecting all of us, grantors and grantees. But this will pass as the economy recovers, which it will. In the end, we are likely to be stronger, leaner, more efficient, but in the meantime, know we are as passionate about of missions, programs and services as ever.

We will endure.

Jim Kelly

The height of summer is upon us, and as you zoom around in the family wagon running errands, or driving the kiddies to that favorite local vacation spot, take a moment to look around at the local real estate scene. Notice especially the growing number of “For Sale” signs all around. Although our area hasn’t been hit as hard as California, Arizona or Nevada, the effects of the down economy are becoming more and more visible. Historic properties are frequent victims of an economic slump. Older buildings believed to cost too much to repair, or considered outdated for one reason or another, sometimes seem not worth further investment. Below is a select list of iconic historic buildings around King County that are in a state of transition. They face an uncertain future at a critical moment in time. While you are passing by them this summer, remember that these structures are more than just old bits of brick and wood, they represent the unique history and personality of our individual communities.

Alki Homestead Restaurant – A West Seattle favorite, many locals recall eating Doris Nelson’s famous country fried chicken in this historic, antique-filled log restaurant. Built in 1903 for William and Gladys Bernard, Fir Lodge was one of the few fine homes to go up in an area dominated by modest vacation bungalows. In 1960, Doris Nelson purchased the lodge-turned-restaurant and created the Homestead’s lasting legacy: an old-fashioned family style dining hall. After Nelson’s death in 2004, the Homestead Restaurant was purchased by local property developers, who continued its operation for a time. In January of this year, a fire broke out in the building, and badly damaged the roof and portions of the interior. Since the fire, the restaurant has remained closed, with the windows boarded up and tarps draping the roof. Although the future of the Alki Homestead Restaurant is very unclear, preservation of this local landmark has been actively supported by the Southwest Seattle Historical Society. For more information about this story visit their website or the West Seattle Blog.

Skykomish Hotel – In the town of Skykomish, the Washington State Department of Ecology and BNSF Railway continue a massive, multi-million cleanup project to remove nearly a century’s worth of contaminated soil under the town and along its riverfront. Since work began in 2006, more than 30,000 gallons of oil have been recovered from the river and groundwater. Cleanup consists of lifting and temporary moving all of the buildings in the community’s downtown historic district to extract old oil from the soil underneath. The most recent building scheduled for moving is the old Skykomish Hotel. Boarded up for quite some time, this historic four-story hotel had already experienced visible deterioration due to roof damage, overall lack of maintenance, and vacancy. While most historic buildings in downtown Skykomish have been moved without harm to the structures, many people are concerned about the effect a move will have on this old hotel, because of its prior condition. For more information about this project and interesting photos of the cleanup, visit http://skykomishcleanup.com/.

Reard-Freed House – Located in the city of Sammamish, this two-story decorated pioneer farmhouse was built in the 1890s by Jacob D. Reard. During the first half of the 20^th century, the property went through several owners and uses including an impromptu dance hall, the City’s water district headquarters and the site of the 1980 movie Act of Love, starring Ron Howard and Mickey Rourke. Although the house remained relatively unaltered since its construction over 100 years ago, the area surrounding it has grown dramatically and the house was threatened with demolition to make room for new development. After a campaign by local residents, the City of Sammamish agreed in 2004 to spend $250,000 restoring the structure, including moving it to a new location. Since the recession hit, however, plans have changed. The city has backed away from plans to move the house, and it remains threatened.

Not all properties in a state of transition face a negative outcome, however. The Seattle Church of Christ, designed by Harlan Thomas (Thomas & Grainger) in 1926, was slated for demolition as recent as 2006. The Queen Anne Historical Society worked tirelessly to successfully save this Neo-Byzantine style sanctuary (formerly the 7^th Church of Christ, Scientist) and help it acquire new owners committed to its preservation. It now stands as an example of what an enormous contribution to old buildings can make to the vitality of our neighborhoods.

And while you’re out there in King County, be sure to visit the wonderful Fall City Roadhouse, a decaying 1920s roadhouse situated at a very strategic spot along the Snoqualmie River, recently restored with private funds and a lot of TLC. For more information on historic properties in transition visit the Washington Trust for Historic Preservation’s Most Endangered List

Image: Courtesy of Todd Scott, King County Historic Preservation Program

Since our last newsletter in early March, the results of a study examining the impacts of the recession on area arts and cultural organizations, has been released.

The study was funded by 4Culture, the Paul G. Allen Family Foundation, Seattle Foundation and the Seattle Office of Arts and Cultural Affairs and conducted by Helicon Collaborative through interviews with 28 local arts, heritage and cultural organizations.

The study asked organization leaders a number of questions about how they are faring in this difficult economic environment, and how funders can help.

Since the results of the study have been featured in several recent news articles, I won’t go into great detail here. In a nutshell, we predictably learned that endowment income is down (20% – 35%); corporate contributions are down (20% – 50%); foundation and individual giving is down (10% – 25%). We learned that organizations are trying to control expenses, with many absorbing staff cuts, furloughs, pay and benefit reductions and hiring freezes. I know of one organization that has laid-off marketing staff, not because they don’t understand the connection between marketing and attendance, but because they had no other options. These are tough times for organizations of all sizes.

The participants were also asked what funders could do to help, other than increasing their levels of giving, (since funders are coping with the same budget crisis as the organizations they serve.) One recommendation was for funders to extend the support period for biennial grants such 4Culture’s Sustained Support program, which provides two years of funding. Why not extend those grants for a third year? The rationale is that groups could use the time to seek new supporters if they didn’t have to fill out lengthy applications from their traditional funders. 4Culture is considering this option for 2010.

While there are no great surprises in these findings, one beneficial outcome is that funders are talking to each other and the field in ways that we haven’t in the past. This is not the time for any of us to hunker in our bunkers. We are all in this together and open and candid dialogue about how we can all best work in collaboration is vitally important. We hope that you will continue to give us open feedback about how your organizations are doing and what we can do to help.

Jim Kelly
Executive Director