The Bottom LineThe Bottom Line

Can Commercial Real Estate Development Help Heal This Seattle Neighborhood?

Through its new Cultural Space Agency, Seattle hopes to seed a new pattern of cultural and commercial development led by the communities that development usually leaves behind or displaces.

Melanie Granger (left), Jayza Duhon (center) and Kema Jones (right) perform on stage at South Park Hall in Seattle. (Photo by Crystal Brown)

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Crystal Brown wants her neighbors to take real power over the development of their neighborhood.

A self-described “Pacific Northwest kid,” Brown hadn’t heard much about Seattle’s South Park neighborhood before she moved in about five years ago.

Nearly a third of South Park residents live below the federal poverty line and nearly half identify as Hispanic or Latinx. Highways cross through the neighborhood, making it a highly trafficked corridor for trucks. It also sits across the heavily polluted Duwamish River from King County International Airport, which is mostly used for cargo these days. Brown can’t ignore all that, but it’s not what she thinks of first when she thinks of South Park.

“I’m a people person,” Brown says. “I was able to experience this neighborhood just by being out walking around. Being here in my thirties, this neighborhood really stood out to me as an amazing place for people.”

At locally-owned Resistencia Coffee, she came to know other women from the neighborhood, like Resistencia owner Coté Soerens, local artists Emily McLaughlin and Melanie Granger, and food justice organizer Mónica Perez, whom she calls her “personal superhero.”

Together with a few more of their neighbors, the women formed a nonprofit called Cultivate South Park as a vehicle to support each of their efforts. As reported in the Seattle Times, Perez used the nonprofit to grow a pandemic emergency food distribution effort into a full-fledged farmers market held on Tuesdays in South Park.

For its next and biggest act yet, Cultivate South Park partnered with the Cultural Space Agency — a quasi-public, mission-driven real estate development company chartered by the City of Seattle — to acquire three neighboring mixed-use buildings and an adjacent parking lot in the heart of South Park. The existing tenants of the buildings include Resistencia Coffee and a handful of other local businesses including South Park Hall — a century-old, 3,800-square foot performance and events venue that Granger recently took over.

The ultimate vision is to transfer these properties into a new community land trust, called “El Barrio Community Trust,” with community members serving on the trust’s board and playing a key role in the future development of their neighborhood as collective property owners. Brown hopes it can give this historically marginalized neighborhood a chance to set the direction of its own development instead of remaining totally at the mercy of outside developers and financiers.

“A lot of people hadn’t heard of community land trusts,” Brown says. “But it’s important that our groups know Cultivate South Park cannot be the controlling force. We really need to take a step back, we need to not provide the control and the decision making. We need to help lead the process of discussion, education, and empowerment in the hands of the community members. It’s a beautiful thing when neighbors can understand what these policies and community land trusts can accomplish for their community.”

It’s the first community acquisition made with the support of the Cultural Space Agency. As Next City covered at the time, its creation in December 2020 came after at least seven years of organizing and advocacy from communities of color in and around Seattle. It was also directly inspired by the Community Arts Stabilization Trust, an arts-focused real estate nonprofit with a similar mission in the Bay Area.

The Cultural Space Agency is technically a public development authority, similar to local public housing authorities, economic development corporations, or local transit authorities. Typically they must be established by legislative authority, through a city council or state legislature, and the exact process can vary by state. These types of entities are especially useful when cities want to combine public resources, including property or funding, with private support from philanthropy or corporations.

The City of Seattle has previously chartered eight public development authorities, protecting and preserving famous or prominent sites like Pike Place Market, the Seattle Art Museum and the Pacific Hospital. The Cultural Space Agency is unique as the only one of Seattle’s eight chartered public development authorities whose governing body has no mayoral appointments — instead, it has been appointed entirely by members of Seattle’s Black, Indigenous and other communities of color.

Although anyone may submit real estate project ideas to the Cultural Space Agency, its initial pipeline of projects was drawn from the alumni of the Build ArtSpace Equitably (BASE) certification program, created and funded by Seattle’s Office of Arts and Culture. The program’s goal is “to build capacity in communities of color to build permanent affordable cultural spaces and to extend the “onramp” to commercial real estate development further into cultural communities.” Soerens, Resistencia’s owner, graduated from the program in 2021.

Funding sources for community-driven real estate projects may come and go, and some funding sources require so much paperwork and headaches that they’re not worth pursuing if you’re not a real estate organization that plans to make a routine out of it. But the real world, and especially real estate, doesn’t always have the patience to wait for historically marginalized communities or artists to figure out funding sources and ownership structures that work for them.

Groups like Seattle’s Cultural Space Agency or San Francisco’s Community Arts Stabilization Trust have emerged to serve as holding entities that can help with fundraising, and perhaps serve as temporary or partial owners of properties, so that communities or arts organizations have the time to figure everything else out. In the case of El Barrio, the Cultural Space Agency formed a joint venture with Cultivate South Park to take ownership of the properties until the El Barrio Community Trust can establish a board and governance processes rooted in the community.

“We bought ourselves time, and that is really meaningful,” Soerens says. “We’re very grateful for that.”

The Cultural Space Agency approached the previous owners of the El Barrio properties to talk about acquisition in mid-2021. The previous ownership group told executive director Matthew Richter they were actually about to put up the properties for sale.

“These are older buildings that without significant investment, which we plan on making, are reaching the ends of their lifetimes,” Richter says. “They are not what the market would typically consider the highest and best use in terms of zoning, and density. These buildings represent, I think, a significant development opportunity for someone who’s interested in a more exploitive version of what property development typically is, in these developing and growing neighborhoods.”

Also in mid-2021, the city announced a new “Strategic Investment Fund,” putting out a request for proposals for up to $30 million in total funding to “for land and property acquisition to respond to disproportionate displacement pressures impacting Black, Indigenous and people of color communities.” The Cultural Space Agency quickly got to work on a handful of proposals, including one in partnership with Cultivate South Park. The city informed 13 winning respondents in September 2021.

Cultivate South Park was among the winners, earning $2.3 million from the city. The city dollars allowed the group to put down a deposit for the purchase and start raising the rest of the dollars from other sources.

Another way to think about the Cultural Space Agency’s role is serving as a mini-investment bank for its pipeline of projects led by Black, Indigenous and other communities of color. Richter is constantly in talks with all kinds of lenders, from conventional banks to federally-certified Community Development Financial Institutions, to impact investors and philanthropists, to inform them of opportunities to support the projects in the agency’s pipeline.

At Resistencia Coffee, Richter sat down for one such meeting with three high-net worth individuals. The three anonymous high-net worth individuals had gotten to know the neighborhood through various initiatives, from the Mónica Perez-led local response to pandemic food insecurity as well as more joyful initiatives like “The Build Up,” a monthly local arts and performance showcase co-curated by Melanie Granger and hosted at South Park Hall.

Richter says he presented the high-net worth individuals the opportunity to support the project as co-investors in the properties, as lenders to help acquire the property, or as donors. All three elected to donate a total of $3.5 million– enough to acquire the El Barrio properties without any debt. Richter says additional philanthropic donors are now considering supporting the rehab work needed on the properties.

“It was a beautiful story to hear that these anonymous donors were moved to do this because of the work that people like Melanie and Monica have done, which has so for so long gone unrecognized and marginalized,” Brown says.

Richter also believes the anonymous donors were also attracted by the mission that this project represents, as the first acquisition supported by the Cultural Space Agency. A handful of storefronts, an event space, three second-floor apartments and a parking lot may not by themselves seem like a very significant project, but Richter says they gain significance as the first in an emerging pattern of cultural and commercial development led by the communities that development usually leaves behind or displaces.

But the harder part has really only just begun — the work of bringing that community into that conversation now that something real is at stake in these properties.

“It’s a beautiful mission, but we’re gonna be dealing with a lot in terms of healing and trauma, and all these other historical things,” Brown says. “But we are willing to work with our community and our neighbors and the city and other community partners, people who have been in [other] South Park agencies, who have been in South Park long before us, the beautiful collaborations that already exist and the healing that we hope to make a part of this work.”

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 Bottom Line newsletter.

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Oscar is Next City's senior economic justice correspondent. He previously served as Next City’s editor from 2018-2019, and was a Next City Equitable Cities Fellow from 2015-2016. Since 2011, Oscar has covered community development finance, community banking, impact investing, economic development, housing and more for media outlets such as Shelterforce, B Magazine, Impact Alpha and Fast Company.

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Tags: real estateseattledevelopment without displacement

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