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This obscure New Deal-era program could keep a major arts nonprofit in Alexandria

Sculpting at The Art League (image via The Art League/Facebook)

The redevelopment of the Montgomery Center has pushed some businesses out of Alexandria or out of business, but a clever re-use of an old funding authority may help The Art League survive.

The Art League is scheduled to get City Council authorization tonight (Tuesday) for a funding mechanism that should help the nonprofit set up a new headquarters at 800 Slaters Lane. The Slaters Lane location will be one of three Art League facilities, with another coming into the Muse development and the other being the Torpedo Factory.

The funding is part of the Council’s consent calendar, meaning it’s almost certain to be quickly approved, but behind the scenes: the funding is a first-of-its-kind use of a half-century-old Industrial Development Authority (IDA).

While the lease hasn’t been signed yet so nothing if finalized, it looks likely that the Art League will set up in the old ABC Imaging shop on Slaters Lane. The lease on the current space in the Montgomery Center has been extended to July 1, 2024, with a move to the new headquarters sometime that summer.

“Our expectation is that it will probably take three months to get through drawings, engineering and approval process for the construction aspect of the project,” said Suzanne Bethel, the Art League’s executive director, “and another three months for construction.”

Bethel said the new location is “a unicorn” that fits nearly all the changing needs of The Art League. The nonprofit has seen an uptick in community members looking to use large-scale equipment, the kind of things that can’t be done online and most individuals can’t afford to do at home.

“We’re seeing interest in those classes because hands-on training with equipment, using large-scale equipment average person can’t invest in — we’re seeing a lot of enrollment in those areas,” Bethel said. “We were delighted to identify a local warehouse space… The venting, size, and square footage to accommodate that is important. [The Slaters Lane location] is a unicorn.”

Launching a new headquarters is costly, which was where the IDA came in.

Industrial Development Authorities were first implemented as part of the New Deal during the presidency of Franklin Delano Roosevelt. The idea was to use them to help jurisdictions rebuild and put investment into specific areas. They can issue tax-exempt bonds to borrow at lower interest rates and fund improvements.

Jennifer Atkins, chair of the IDA of Alexandria, said supporting the Art League as it resettles in a new home is the first time the IDA has flexed that side of its authority in the organization’s 60-year history.

“The IDA has been around in Alexandria for a very long time,” Atkins said. “It was set up in the 1960s. In Alexandria, it was only ever used a small number of statutory powers, like bond financing. That was how we used it for a long time.”

Over the last few years, Atkins said the Alexandria Economic Development Partnership (AEDP) — which administers the IDA — was scrounging around for more tools to utilize. Atkins said they found that the IDA could be used to incent and retain a local nonprofit business being displaced by redevelopment.

“Where are there are visions the community has decided on that aren’t happening because the market isn’t letting it happen?” Atkins said. “One [vision] is the arts district. We had identified that… and, with AEDP, they know what’s going on all over the place, so we started having conversations about whether it made sense to do what we do.”

Atkins said nonprofits are a benefit to the city and can catalyze activity, but can struggle with real estate because many don’t have cash upfront. The City Council authorization would allow the IDA to make a $250,000 loan and help the nonprofit to secure a larger $500,000 loan from the bank.

“None of this is taxpayer dollars or grants or free money,” Atkins said. “We look at: how do we work with AEDP to help the city realize its vision. Arts districts are a good place where I can envision this happening again. There are other areas where the city has a vision but the market isn’t quite there to make it happen, but it can with a little help from IDA.”

Bethel said the Art League members are excited and nervous about the change.

“Just as school districts have gone through seismic shifts, there has been so much change and shifting for us,” Bethel said. “It’s been a very busy time for us. There’s a lot of question marks: what’s possible? What’s achievable? We’re just going to have to make some lemonade.”

Like the IDA, Bethel said the Art League was navigating uncharted waters with the move.

“We’ve been in operation over 70 years,” said Bethel. We’ve had growth periods and contraction, but this has been an interesting process because we couldn’t find a model. In the past, we have been able to find someone to take lessons from on how to get this done, and we really found: this has been a pilot program on many levels.”

Bethel said the Art League is the first entity in a planned Old Town North arts district.

“We didn’t expect to be the first,” Bethel said. “We are going to have to cut our own path with this.”

Part of the challenge of creating that arts district, Bethel said, is cost.

“We have to battle the number one enemy of groups like ours: escalation of cost,” Bethel said. “It’s always going to outstrip the pace of what a nonprofit can fundraise.”

In addition to the help from the IDA, Bethel said she and other nonprofits do what small businesses do: diversify income streams and try to cut down on overhead.

“We look at areas where we can expand and engage,” Bethel said, “but we have to stay flexible and keep overhead down. We don’t want to become over-committed in one particular area.”

Bethel said the campus approach, with three locations, will help maintain that flexibility and keep The Art League present in different communities.

Atkins said the IDA is keeping a close eye on this process to see how, and if, it can be used again.

“Going forward: this is a test,” Atkins said. “We think this is a really strong organization, we think this is the right solution for doing what needs to be done, and we hope we’re right. There’s always a risk something could go terribly wrong, but I don’t think it will. I’m confident this will be a successful first run and we’ll be quicker and more nimble in the future.”

In the meantime, The Art League has also launched a new fundraising campaign to sustain itself through the move.

“The Art League is launching its relocation capital campaign,” Bethel said. “Now that we have identified the next steps, we need our community. If they’ve thought about supporting the Art League in the past, this is the time to help. One of the ways we can take full advantage of the tools offered is to come out strong with the financial backing for this plan.”

Photo via The Art League/Facebook

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