Chester Artists Revitalizing Corridor on Their Own Terms – Next City

A cadre of local artists has carefully curated a batch of investors to partner with them to turn this block of Avenue of the States into a locally-owned arts corridor.

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Chester Artists Revitalizing Corridor on Their Own Terms

In a historically redlined community that has been denied equal access to capital for successive generations, an artist collective carefully chooses its investors.

Story by Oscar Perry AbelloTwitter

Published on Jun 5, 2018

In a maker space with hand tools and power tools neatly sorted and hanging on the walls, opposite a row of work tables covered in sawdust and dreams, Devon Walls tells me about growing up right here, in Chester, Pennsylvania.

“I come from an artist family,” says Walls. “I grew up with our living room being our theater, our stage, the place where we painted and built stuff, block parties where kids had to make the games, painting, building, and sculpting. Art was just a part of it, part of everything.”

Tiny Chester, population around 34,000, is technically the oldest city in Pennsylvania, established by Swedish colonizers on Lenape land in 1644. William Penn himself, namesake founder of Pennsylvania, wouldn’t arrive in the area until 1682, shortly afterward establishing the city of Philadelphia, a few miles upstream on the Delaware River.

Chester would peak in the 1950s, when the city served as a hub for shipbuilding and car manufacturing, home to some 66,000 residents. Then, as now, Chester was between 75 and 80 percent black. While still small in the 1950s, it was enough to support a thriving arts community, led by William Dandridge, who was called “the Father of Arts and Culture in the City of Chester,” upon his passing in 2014. To Walls, Dandridge was Uncle Bill.

“My uncle’s vision was to create a cultural arts corridor, right here,” says Walls. “He was an activist as well. He once got arrested right here on this block during the civil rights era, fighting for equality. The stuff that he wanted to get finished, he had other fights he had to fight first.”

Slowly, and under the radar — much like the city that he still calls home — Walls has spent the last decade or so bringing that vision to life on a stretch of Chester’s Avenue of the States, a once mostly vacant corridor, save for a few discount retail and drug stores (the kind that sold drugs that were 20 years old, Walls says).

Walls has methodically acquired ownership interests in a growing number of properties along the corridor, including the MJ Freed Performing Arts Theater, which has an attached dance studio, an art gallery, a coffee shop, and the maker space. And he’s been recruiting local entrepreneurs to fill storefronts in other buildings with tenants who reflect not only his uncle’s vision, but the vision of a group of contemporary Chester artists who have stuck it out over years, remaining steadfast in their commitment to the city and to working with each other as an informal collective.

“We don’t always agree right away on how to do things,” says Walls. “Some folks want to put in hookah lounges, but we’re not playing that. It’s a fight we’re willing to fight because having kids do workshops here, the last thing we want is kids looking across the street and people are smoking pipes. It kinda contradicts the healthy lifestyle we’re also trying to promote.”

The careful curation of business partners goes beyond whom the group has invited onto the corridor. With Walls at the helm, the group has also carefully selected the investors from whom they have accepted capital.

“Our thing, my thing will forever be local ownership,” Walls says. “So when you start putting too much out there and you get too many people in it, the ownership leaves from being local, from the artists. I wanted to make sure we kept local ownership at the forefront of what was going on.”

So far, the select few investors that have made it past Walls’ gatekeeping happen to all be small private foundations, all three so far with strong ties to the Philadelphia region. Their investments — equity or loans, not grants — have helped Walls and the artists secure and begin to make improvements to some of the properties, including the MJ Freed theater as well as a formerly blighted 40,000 square-foot warehouse that will soon be renovated into studios, offices and convening space for 20 Chester artists.

“There’s been [other investors] that I turned down, I cursed out, I kicked out the door. It’s been a lot of people,” says Walls. “I like the group that we’ve worked with so far. They made me feel comfortable enough … We’re like family.”

The MJ Freed Performing Arts Theater. (Photo by Oscar Perry Abello)

Stepping into a vacuum

For decades, foundations have used loans and other types of investments for charitable purposes. The Ford Foundation was the first to take this approach, making the first of what it called “program-related investments” in 1968. The following year, the Tax Reform Act of 1969 included a tweak to the U.S. Tax Code that recognized program-related investments as part of the five percent of a foundation’s asset value that each private foundation must disburse every year for charitable purposes in order to remain tax-exempt.

Large, well-endowed foundations would eventually follow suit with program-related investments, including the W.K. Kellogg Foundation, the John D. and Catherine T. MacArthur Foundation, Bill & Melinda Gates Foundation, the Rockefeller Foundation, and the Kresge Foundation, among others. (The Ford and Kresge Foundations provide grant funding to Next City.)

From their very beginning at the Ford Foundation in 1968, program-related investments from foundations have helped finance affordable housing, small business lending for women- and minority-owned businesses, conservation or parks development, and other purposes under the various and shifting program areas of large foundations. For decades, only larger foundations could afford the lawyers, accountants and other professionals required to properly assess the financial soundness (not to mention potential impact) of potential program-related investments. Because of those constraints, by 2003, only 134 out of 66,000-plus foundations made any program-related investments in that year.

But something intriguing has happened in the foundation world. As the broader U.S. financial system has become more and more concentrated over time, foundations have become less concentrated, at least at the aggregate level of analysis. In 2003, more than 66,000 foundations existed in the U.S. holding nearly $477 billion in assets; in 2014, the most recent year available from The Foundation Center, more than 86,000 foundations held $865 billion in assets. By contrast, the U.S. had more than 14,000 banks in the mid-1980s; only around 5,000 banks are still in business today.

“My uncle’s vision was to create a cultural arts corridor, right here,” says Walls. “He was an activist as well. He once got arrested right here on this block during the civil rights era, fighting for equality. The stuff that he wanted to get finished, he had other fights he had to fight first.”

As Next City has previously reported, the smaller foundations are now getting into program-related investing. These are the kinds of small foundations that have historically been focused on grantmaking for after-school school programs, museums, higher education, medical research, or human services like food pantries or domestic violence survivor counseling. Smaller foundations are getting into the lending and investing game, especially when it comes to place-based investments, like Chester’s arts corridor revitalization.

The story of Devon Walls and Chester’s artist-led revitalization illustrates how smaller foundations, both new and old, might be ideally positioned to step into the vacuum left behind by a financial system that has become ever more distant from people and places like Chester’s artist community. They might even be able to build a new bridge between the two.

Becoming the Wing Man

Chuck Lacy is president of the Barred Rock Fund, a small private foundation he co-founded in 2001, along with Judy Wicks and Ben Cohen (of Ben & Jerry’s fame — Lacy was formerly chief operating officer of the ice cream company under Cohen). Wicks, founder of the Business Alliance for Local Living Economies, is a local Philly-area icon, as the founder of White Dog Café, the restaurant that birthed the modern day local foods movement. Instead of making grants, Barred Rock Fund uses program-related investing to operate more like a venture capital fund, making investments in ventures intended to create jobs and opportunity in historically under-invested places.

In 2015, flush with cash after Lacy sold off some previous assets, Barred Rock Fund was looking to make its next investment. “Judy and I were out exploring and looking for something to do in the Philadelphia area,” Lacy says.

They cast a wide net, Lacy says. In the fall of 2015, Wicks and Lacy made a stop at Widener University, in Chester, where Walls was doing an artist residency, supported by the Pennsylvania Humanities Council. “We went to the Small Business Administration program at Widener, to see if they had any ideas, and when we showed up we discovered we were expected to give a talk,” says Lacy. “Devon was there, and he invited us to come downtown.”

Downtown they went, to the Avenue of the States corridor, where Walls had already spent years quietly setting up lease-to-purchase agreements with longtime property owners along the street. He’d been funding the agreements mostly out of his own earnings from selling artwork, doing set design and construction all over the country, and the small amount of overhead available from grants received to do arts programming and creative placemaking work like Chester Made — also funded by the Pennsylvania Humanities Council.

On that first trip to the Avenue of the States, Lacy noticed a poster on the MJ Freed Theater for a children’s Halloween party the following Saturday.

“I went back, without telling Devon I was coming,” says Lacy. “It was supposed to start at six o’clock. I got there at 5:30 and it seemed like nothing was going on. At six o’clock, the grate came up, and all of a sudden families started showing up and kids started going in. I went in and there was all this theater smoke, kids painting pumpkins, and Devon and his friends put on a children’s play. It was just fantastic. That’s when I got hooked. I wanted to see if it was for real, and it was.”

Walls and Barred Rock Fund created a new business partnership, New Day Chester Inc., to later buy the theater building and other buildings, including the future artists’ warehouse. They intentionally set up Walls as the two-thirds majority owner of the venture.

“The way I see it is, our involvement has brought things along quicker, but what happened was going to happen anyway,” Lacy says. “What we bring is a little bit of the resources and connections that would be commonplace in a wealthier community.”

A typical venture capital fund expects to push startup companies to grow fast and eventually “go public,” selling shares on the stock market and earning the fund ten times or a hundred times back what it invested. The Barred Rock Fund has worked out a different venture capital model.

“I’m really a wingman here,” says Lacy, who typically travels down from his Vermont base to spend one or two days a week in Chester. “My goal is to create the conditions under which Devon and other people from Chester can buy us out.”

“We’re talking about a community where most people don’t have stuff, so when you start talking about taking out a $250,000 loan to build something, and you’re now indebted for that, it was different.”

The approach and the philosophy are what finally won over Walls. “This was a change, it was a conversation with Chuck and others about a faster way to get it done,” he says. “Sometimes doing it the slow way like I do, it still costs you in the long run. Having someone that was willing to loan that money to get stuff done at a faster pace, it was inviting and I opened up to the idea.”

New Day Chester, Inc., is Barred Rock Fund’s eighth investment. Out of the others, Lacy says there are two with whom the fund has been invested for 15 years and counting, and the founders of those ventures have been gradually buying out Barred Rock Fund’s ownership shares in their companies.

After Barred Rock Fund’s initial investment in New Day Chester, the Untours Foundation, based in nearby Media, Pa., and the Barra Foundation, based in Wayne, Pa., have also invested or made loans to the new business partnership.

“I’ve never had a credit card. Taking on loans like that was scary to me,” says Walls. “Even when I talked to other people from the community, it’s scary. We’re talking about a community where most people don’t have stuff, so when you start talking about taking out a $250,000 loan to build something, and you’re now indebted for that, it was different.”

It was different, too, for the Barra Foundation, founded in 1963. The $250,000 loan to build out the 40,000 square-foot warehouse was the foundation’s first program-related investment.

A Family Journey Begins

“We started this journey as an organization in 2015,” says Kristina “Tina” Wahl, president of the Barra Foundation, with a full-time staff of three, herself included.

At the time, Wahl had participated in the Mission Investors Exchange, which, in addition to providing research on the subject, functions as a sort of support group for people and institutions with a lot of money and an interest in investing it intentionally to address social issues. The idea to do so came up at the next board meeting of the Barra Foundation.

“We’re dealing with very seasoned investment professionals on our board’s investment committee,” explains Wahl. “It takes time to socialize this idea, learn about it, understand it, and make sure it’s in line with your goals and your mission.”

The foundation held its following fall board meeting at the offices of Reinvestment Fund, a federally certified community development financial institution with a three-decade track record of making investments for community development purposes like affordable housing and job creation around Greater Philadelphia and all over the United States. At the Barra Foundation board meeting, staff members of Reinvestment Fund gave presentations about their work and lessons learned.

“Having the board hear directly from experts in the field, rather than translating through us, was a really important step,” says Wahl.

The foundation went on to start talking about program-related investments with current and previous grantees. The Barra Foundation had previously supported arts programming under Walls’ leadership, under the Boundaries & Bridges program. Many of the activities of that program took place right on Avenue of the States, in the spaces Walls and his fellow artists were quietly acquiring and building. When Barra came around talking about making some program-related investments, New Day Chester and its artist warehouse project provided the perfect opportunity.

“Devon owning two-thirds of the company was important for us,” says Wahl. “For us, that was a creative opportunity that was in line with our thinking around innovation, to model that behavior for other investors, even beyond foundations.”

“My goal is to create the conditions under which Devon and other people from Chester can buy us out.”

The foundation said yes to the New Day Chester loan in September 2016. Wahl hopes that, in addition to building out the warehouse space and turning it into a source of revenue for New Day Chester, the loan will also help the entity establish a track record of timely payments over the five-year term of the loan, positioning them eventually to access conventional financing if they so choose.

Walls has bigger plans ahead, including rehabbing the vacant, out-of-repair apartments above many of the storefronts along the Avenue of the States corridor, to provide affordable housing for artists and others from Chester.

“I think our vision is bigger than the capital that we had, says Walls. “We are in a community where banks don’t want to loan money, insurance companies didn’t even want to insure the properties, a redlined community where most of the wealth that was here moved out to the suburbs … I don’t think $250,000 would do it all, but I think it would get us to the point where we can gain more capital to do more, so definitely.”

The city is starting to pop up on the radar. DTLR, a national urban sneaker powerhouse, took over an existing sneaker store anchoring a corner location along the Avenue of the States corridor. Around the corner from the corridor, a new hotel is under construction — the owner of which Walls says came up to introduce himself and say thanks for the work he was doing to revitalize the area.

“Having that kind of attention and to see that other people are popping up businesses because of what you’re doing, it says a lot,” says Walls. “And it wouldn’t have been possible if we didn’t have those partnerships with the Judys and Chucks and Tinas.”

At the same time, more attention on Chester means even more than just the weight of history on Walls’ broad shoulders.

“I can’t make a lot of mistakes when we’re building something like this,” says Walls. “We’ve got one shot at it. We’ve got one shot and twenty developers waiting on the sidelines who might say well they tried but now let’s just go in there and snatch up everything.”

This article is part of The Bottom Line, a series exploring scalable solutions for problems related to affordability, inclusive economic growth and access to capital. Click here to subscribe to our monthly Bottom Line newsletter. The Bottom Line is made possible with support from Citi Community Development.

Oscar is editor of Next City. Before that, he was a Next City contributing writer and 2015-2016 Equitable Cities Fellow. Since 2011, Oscar has covered community development finance, community banking, impact investing, equitable and inclusive economies, affordable housing, fair housing and more for media outlets such as Shelterforce, B Magazine, Impact Alpha, and Fast Company.

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