Preliminary Feasibility

Report

Prepared for the

Prairie Skyline Foundation, Inc. Crookston, Minnesota

June 2010 ARTSPACE PROJECTS, INC.

250 Third Avenue N., Suite 500 Minneapolis, MN 55401

612.333.9012 www.artspace.org

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Introduction

ike many other small rural cities, Crookston, Minnesota, with a population of about 8,000, is doing its best to keep its downtown alive. But it’s an uphill struggle. Over the decades, two wellsprings of Crookston’s early growth and prosperity –

agriculture and railroads – have been significantly reduced. Agribusiness and modern equipment have dramatically shrunk the number of farm families that Crookston formerly served as a social and economic center. Rail service, at one time provided by eight different lines, has ceased to be a major economic factor. Crookston is more fortunate than many other rural cities, however. It is the seat of Polk County, geographically the fifth-largest county in the state with more than 2,000 square miles. It has a campus of the University of Minnesota that offers 28 undergraduate degree programs to some 1,300 students from 40 states and 27 countries. It has its own daily newspaper, the Crookston Times, and its own radio station, KROX-AM. Not least, it has a real downtown: four square blocks of substantial buildings, many of historic interest. Indeed, the Crookston Commercial Historic District has been listed on the National Register of Historic Places since 1984. The Historic District is anchored by a splendid edifice, the Palace Hotel, located at 119 W. Second Street. Completed in 1896, boasting a four-story masonry center section flanked by matching three-story wings, the Palace in its heyday was perhaps the grandest of Crookston’s ten hotels. But it has been vacant for years, and its future is very much in doubt. The Preservation Alliance of Minnesota first listed the Palace – also known as the Wayne – on its annual roster of the state’s most endangered historic sites in 2006, when Polk County acquired the building through tax forfeiture. That listing led to two attempts to rehabilitate the structure by MetroPlains, a respected Saint Paul developer, but these initiatives had the misfortune of coinciding with the collapse of the national real estate market, and neither was successful. What had been an urgent concern has now become a critical one. The County Board, concerned because the building generates no tax revenue and represents a drain on fiscal resources, voted in early 2009 to demolish the Palace if it couldn’t find a way to stop the financial bleeding. Although execution has been stayed pending the possibility of a new proposal, the county does not appear to be working hard to save it: the Artspace team was told we would not be permitted inside the building because of hazardous conditions, including mold – a prudent course of action, no doubt, if liability is the only concern, but perhaps not the one most likely to generate interest from a prospective developer. In

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fairness, we note that we also did not have the opportunity to walk through the former Cathedral of the Immaculate Conception or the former Villa St. Vincent. These buildings, however, do not appear to be in as imminent danger as the Palace. It was the sense that something has to be done soon that prompted the Prairie Skyline Foundation to invite Artspace to Crookston for a Preliminary Feasibility Visit. The Foundation was motivated not only by a desire to save the Palace and other threatened buildings in and around the Historic District but also by a desire to determine the potential of using one or more of these buildings to help transform Crookston into a regional arts destination. Arts-oriented “old towns” have revitalized communities elsewhere: could it be done in Crookston? The visit, underwritten by a grant from the Laura Jane Musser Fund, took place April 14-15, 2010. Artspace was represented by Wendy Holmes, Senior Vice President for Consulting and Strategic Partnerships, and Roy M. Close, Senior Director of Creative Capital. The community was represented by a Core Group consisting of:

• Dan Johanneck, Crookston Housing and Economic Development Authority • Joyce Johnson, Crookston Community Theater • Sandy Kegler, Crookston Convention and Visitor's Bureau • Dale Knotek, Valley Crossing Arts Council • Wayne Melbye, City Council • Sonia Spaeth, University of Minnesota • Lori A. Wagner, Crookston Chamber of Commerce • Mara Wittman, Northwest Minnesota Arts Council • Kay Hegge, Prairie Skyline Foundation

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Findings

uring a Preliminary Feasibility Visit, Artspace gathers information about five main issues: project concept, artist market, site feasibility, financial feasibility, and local leadership.

If the project concept has been determined, we evaluate it in the context of other factors. For example, if the community wishes to adapt a particular building for use as an arts facility, we consider whether the building is structurally sound, suitable for the intended use, available at a price we can afford, and so on. We ask, too, whether the project concept appears appropriate to the needs of the community. Are there enough artists in the area who need and qualify for affordable live/work space to justify the time and expense of developing a project? Is the difference between market rate and affordable rents sufficient to make a live/work project an attractive option for artists of low and moderate income? Because our business model requires substantial civic investment as well as fundraising in the private sector, does the community have the financial resources and the will to make a significant philanthropic investment in the project? Finally, we ask whether there are local leaders willing and able to advocate for the project in a variety of ways. While these are not the only factors we consider in making recommendations, they help us frame the discussion. PROJECT CONCEPT

Many communities have a clear project concept in mind before they contact Artspace. Buffalo, New York, for example, was interested in a live/work project to catalyze development in an economically challenged neighborhood. Brainerd, Minnesota, wanted to find a use for a junior high school that was being replaced by a new facility. In Santa Cruz, California, where real estate values are among the highest in the country, the goal was to keep artists from being priced out of the community. In Crookston, the project concept revolves around the issues of historic preservation and economic renewal. Proponents of saving the Palace Hotel and other buildings in and around the Commercial Historic District seek to fill them with artists and arts activity that would make Crookston a destination for cultural tourism and thereby help revitalize the community’s economy. This concept has succeeded in other small cities. A notable example is Stillwater, Minnesota, a city of about 15,000, whose historic downtown area, filled with galleries, antique shops, restaurants, and other tourist-friendly businesses, is packed with visitors every weekend from

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April through October. Stillwater, of course, has the advantages of the St. Croix River, a natural scenic attraction, and a nearby major metropolitan area. But Crookston has its own scenic river in the Red Lake River, one of 30 designated state water trails (and one of only two in northwestern Minnesota), which winds its way through the city and is widely used for canoeing, kayaking, and tubing. And the Greater Grand Forks metropolitan area, a 20-minute drive away, has 100,000 residents. Although there are obvious differences in scale, Crookston certainly has the potential to transform itself into a tourist destination that uses a combination of attractions, including its historic downtown buildings, recreational opportunities, and the arts. ARTIST MARKET

Every community of artists has space needs, and Crookston’s is no exception. In the artist focus group, we heard from a representative group of about a dozen artists who addressed issues ranging from the lack of dedicated performance space to the need for studios with shared equipment. All agreed that younger artists in the community would be interested in live/work space, though only one member of the group self-identified as a member of that category. Much of the discussion focused on the perceived need for shared studio spaces where artists could come together. The focus group noted that there are a number of wood sculptors, ceramic artists, quilters, and musicians in the area and that good, affordable studio space is hard to come by. Membership-based studios struck some focus group members as an idea worth considering. Several knew about a cooperative studio in Roseau, 100 miles to the north, that is shared by some 20 artists; something along those lines, they thought, would be good for Crookston artists as well. Lack of dedicated performance space is another perceived problem. The only suitable spaces, we were told, are in schools, and these cannot be booked more than about six months in advance, making it difficult for performing groups to plan their seasons. And, of course, school events take precedence. Combining arts and educational space is a concept that resonated with a number focus group members. We were told of several institutions that need space, including the Crookston branch of the University of Minnesota and the North Dakota Museum of Art. Combining arts and community education space, arts and youth gathering space, and similar mixed-use scenarios also struck many in the group as a good idea. One possible tenant for a mixed-use space would be the Northwest Minnesota Arts Council, currently located 30 miles north of Crookston in Warren; Mara Wittman, the Arts Council’s director, has been exploring the possibility of relocating the agency’s office to Crookston, East Grand Forks, or

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Thief River Falls. The Arts Council, though not large enough to be an anchor tenant, would be a welcome one, for it serves artists throughout northwestern Minnesota. While developing affordable housing can be problematic in small cities, we note here that Crookston is experiencing an affordable housing shortage; the City has a waiting list for vacancies. This fact might make it more difficult politically to sell an affordable housing project with an artist preference; but it also opens the door for consideration of a project that mixes dedicated live/work space for artists with conventional affordable housing. An in-depth Artist Market Survey is a necessary early step in the predevelopment phase of an affordable live/work project. We use the survey to determine both the size and the nature of the market for the project. It tells us with reliable accuracy how many live/work units the local arts community can fill and whether there are special considerations, such as the need for specific kinds of studio space, that might influence the design and scale of the project. If a mixed-use project is under consideration, the survey can also be used to identify the need for space for arts organizations, creative businesses, and arts-friendly commercial ventures such as coffee shops and restaurants. A full-scale artist survey, conducted on-line with a telephone back-up for artists who lack Internet access, is typically designed to reach at least 3,000 artists. Developing the questionnaire, publicizing it, gathering the responses, and analyzing the data takes about four months. In analyzing the results, we look for a three-to-one redundancy – that is, three income-qualified artists who express a strong interest in residing in the project for every unit being proposed. Sometimes the survey will reveal such a strong demand for space that we will enlarge the project to include more units. This was the case in Buffalo, where we expanded a proposed 36-unit project to 60 units on the strength of the Artist Market Survey. On rare occasions, the survey will tell us that there is insufficient demand to warrant any project at all. We recommend proceeding with an Artist Market Survey if we are confident that it will indicate the existence of a market sufficient to support a project of at least 25 (and preferably 35) units. In a few cases, we recommend an Artist Market Survey to a city that wishes to have a better or more complete picture of the size and makeup of its arts community, even though we believe that the survey is unlikely to reveal a market large enough for an Artspace project. That’s the case in Crookston. SITE ANALYSIS

Crookston’s greatest asset in terms of development potential is its large stock of historic buildings. The Palace Hotel is the grandest of the lot, but it has plenty of company, including

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the splendid Fournet Building, a Carnegie public library, the former cathedral, and the former Villa St. Vincent, the original motherhouse of the Crookston Diocese’ Benedictine Sisters, to name several. Here is what we found. Palace Hote l W. Second Street between N. Main Street and N. Broadway The building identified in this report as the Palace Hotel was originally known as the Reckitt Block, after Francis Reckitt, the leader of a group of British investors who had acquired

property in Crookston. Its architect, Arthur Permain, was only 23 years old when he was commissioned to design the four-story building, which opened its doors in 1892 and boasted such modern conveniences as steam heat, electric lights, and an elevator. The Palace Hotel originally occupied only the third floor but later expanded to take over most of the

building. Between 1930 and the 1970s it was known as the Wayne Hotel. The entire building has been vacant since the early 1990s. It is regrettable that we were not permitted to go inside the Palace Hotel during our visit to Crookston. While hotels can be good candidates for adaptive reuse (Artspace’s 26-project portfolio includes three former hotels) and while there is ample external evidence that the building remains structurally sound, there is no substitute for direct observation. And it would have been helpful to see the interior spaces as they relate to one another; the original hotel lobby, in particular, has great potential. Whether the Palace Hotel is a viable candidate for an Artspace live/work project will depend in part on the results of an Artist Market Survey and in part on whether a range of

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complementary uses can be identified. Adaptive reuse of a building of this size would be a substantial challenge for a city the size of Crookston. But the potential is there. The Palace is ideally located and has the look of an important building. Given a sustainable adaptive reuse (or uses), there is every reason to believe the Palace could reclaim its historic claim as a cornerstone of downtown Crookston. Whatever else can be said about the Palace, the citizens of Crookston should make it clear to their elected leaders that they want the building preserved. While we are sympathetic to the County Commissioners who see the building chiefly as drain on scarce resources, we cannot state too strongly our view that tearing it down would be akin to burning a Rembrandt because you can’t afford to have it cleaned. Every effort should be made to find the money needed to stabilize the building until a suitable reuse can be found. Once gone, it can never be replaced. Fournet Bui lding Corner of N. Main Street and N. Broadway In a city of handsome historic buildings, the three-story Fournet Building is one of the best. Built in 1892 and still privately owned, the Fournet was designed for retail uses on the

ground floor (at least some spaces are still occupied) with a variety of uses –hotel, offices, apartments, and Masonic lodge meeting rooms – on the upper levels. Among its features is a remarkable two-story lobby on the second and third floors that boasts a grand staircase, a balcony that wraps around three sides of the foyer, and a large skylight that lets in a

wealth of natural light. Visitors to the Fournet must have been awed – and rightly so – by the elegance of the space. Although the Fournet’s upper floors bear all the evidence of long vacancy, the building appears to be structurally sound and in generally good condition. The best adaptive reuse, we believe, would be residential. A Fournet project would necessarily be smaller than one involving the Palace, but as with the larger building there is significant potential.

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Cathedral o f the Immaculate Concept ion N. Ash Street between E. Second Street and E. Third Street Completed in 1912, this red-brick neo-Gothic structure, the former mother church of the Diocese of Crookston, is notable for its three towers, handsome proportions, and matching side balconies designed for antiphonal choral music. With a seating capacity of 1,000, it was one of the largest cathedrals in the state if not the country. It has been vacant since 1990.

Although we did not see the interior, the Prairie Skyline Foundation’s website describes the former cathedral as structurally sound despite significant deterioration. The exterior appears to be in relatively good condition. The Foundation has set forth an 11-step plan for renovating the structure and adapting it for reuse as a performing

arts center (a sister cathedral in Duluth, designed by the same architect, has already been converted to arts use). Because the building is on the National Register of Historic Places, Historic Tax Credits will be available to help pay for its renovation. We think the intended use has some merit, though 1,000 seats is undoubtedly far more than any community performing arts group needs in a community the size of Crookston. If the Foundation’s plan moves forward, the planning group would be well-advised to consider a much smaller facility – say, to 250 to 350 seats – and finding compatible uses for the remaining space. Another possibility would be to transform the former cathedral into a visitors’ center that could house the Chamber of Commerce, the Convention and Visitors’ Bureau, and a regional museum built around the elements that have defined Crookston over time: glacial Lake Agassiz, the Red River Ox Cart Trail, the Great Northern Railway and other early railroads, migratory birds and flyways, and the Red Lake River, to name a few. There are two oxcart replicas in the community that might be candidates for such a museum; and the William Crooks, an 1862 steam engine that bears the name of the railroad builder for whom Crookston is named, would be a terrific addition if the Lake Superior Railroad Museum in

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Duluth could be persuaded to part with it. Relocating the Chamber and the Visitors’ Bureau would not only put these important agencies in a facility with relatively high public traffic but would make it possible to include a gallery of local artists’ and artisans’ work, with the agencies’ staff available to transact sales or answer questions. Other bui ldings The Prairie Skyline Foundation has identified a number of other historic buildings that could be redeveloped as part of a long-term project to preserve the best of Crookston’s historic center. These include:

• the Union Building and former Crookston Paint and Glass Building (Second between Main and Broadway), adjacent buildings owned by the Prairie Skyline Foundation. The three-story Union Building, which we toured, is suitable either for residential or studio uses over the ground floor, currently used as a thrift store. The vacant one-story CP&G Building is more suitable for studio or gallery space.

• former Villa St. Vincent (Seventh

Street), also known as the Professional Building, built in 1902 as the 45-bed mother-house of an order of Benedictine Sisters. It is a lovely three-story building with 12,000 square feet on each floor and many intact original features. Like the Palace Hotel, it is county-owned and slated for demolition in 2010 unless a suitable use can be found.

• the Carnegie Public Library (Second and Ash), a neoclassical building dating from

1910, with two floors of about 2,500 square feet each. Although it is not a large building, it has a good site between the old cathedral and the new public library on the east side of Ash Street. In terms of adaptive reuse as an arts facility, it would appear best suited to provide office and meeting space for arts agencies and gallery space for exhibitions. The City of Thief

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River Falls is in the process of renovating its vintage Carnegie Library into a community center; a similar reuse would make sense for Crookston as well.

FINANCIAL ANALYSIS

An Artspace live/work project usually represents a significant investment of civic resources. While an assortment of federal and state programs can be used to generate revenue for construction, we typically look to the community for predevelopment revenue and a commitment of affordable housing allocations, typically in the form of Community Development Block Grants, HOME funds, or the equivalent. In smaller cities, however, the financial picture often looks quite different. Most small cities lack resources sufficient to cover the full predevelopment expense of even of a small project. Their artist markets tend to be small, and this is problematic because Low Income Housing Tax Credits are designed to encourage economies of scale: they work best with large projects and – in our experience, at least – cease to be an effective tool for projects of fewer than about 25 units. And despite recent adjustments in the formula used to determine rental rates in rural tax credit projects, the difference between “affordable” and “market rate” rents tends to be insignificant in cities like Crookston; this eliminates one of the main advantages affordable housing projects have over their market-rate competitors. This is not to say that an Artspace project, or a project in the Artspace mold, is out of the question in Crookston. We have worked successfully in cities as small as Brainerd and Fergus Falls, whose populations in 2000 were less than 14,000, and we are moving forward with a scope of predevelopment work in Taos, New Mexico, which has fewer than 5,000 permanent residents. The best comparable example is the Kaddatz Artist Lofts in Fergus Falls, a 10-unit project in an historic hotel in the city center. The Kaddatz budget did not utilize Low Income Housing Tax Credits; in their place, we secured a grant from the Minnesota Department of Employment and Economic Development (DEED). The City of Fergus Falls donated the building. And two local family trusts provided major gifts. A scenario of this sort might also work in Crookston. If the project involves the Palace Hotel, a building roughly 50% larger than the Kaddatz, it will be necessary to find other uses. Market rate housing, space for arts and/or social service organizations, or some combination of these might answer. Regardless of the use mix, identifying sufficient resources will be a challenge in Crookston. This was underscored by the failure of MetroPlains’ two attempts to redevelop the Palace Hotel; although the project concept was sound, the national economy was in recession and the project did not move forward.

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LOCAL LEADERSHIP

Strong local leadership is an essential ingredient of an arts project. Without someone on the ground who can advocate effectively for the project, open doors, and keep the lines of communication open between the developer and the community, there is little chance of success. For this reason, we place a very high value on local leadership. Crookston appears to have strong leadership potential. Artspace’s visit was co-sponsored by the City of Crookston, the Crookston Housing and Economic Development Authority, the Crookston Chamber of Commerce, the Convention and Visitor’s Bureau, the Crookston Community Theatre, the Valley Crossing Arts Council, the University of Minnesota-Crookston’s Arts and Humanities department, and the Prairie Skyline Foundation, which acted as fiscal agent and host. That all of these entities were willing to sign on as co-sponsors is a positive indication that individual leaders will emerge from one or more of them. The Valley Crossing Arts Council, a small umbrella organization that promotes and supports the activities of the community’s various arts groups, was cited by several stakeholders as a potential tenant for an arts facility used by some of the groups it serves, such as the Civic Music League and the Crookston Community Theatre. Mara Wittman, director of the Northwest Minnesota Arts Council, attended all our sessions in Crookston and made it clear that she will actively support any arts project in Crookston whether or not she moves her agency into it. And the Prairie Skyline Foundation’s leader, Kay Hegge, has become a strong advocate for historic preservation in downtown Crookston. If the community decides to move forward with an Artist Market Survey, we think the groups identified here would do well to form a project team that includes representatives from the arts, business, and government sectors.

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Recommendations and Next Steps

t is too soon to say whether an Artspace project is possible in Crookston. One of the key unknowns is the size of the artist market, and for this reason we think the community would be wise to undertake an Artist Market Survey. As noted in the Artist

Market section above, this survey will answer many questions about the project, including its optimal size and the best mix of uses – residential, commercial, studio, office, gallery, and so on – within it. Even if a project does not move forward, civic leaders will have a much better sense of the size, nature, and space needs of its artist community. As a second recommendation, we urge the community to do everything it can to preserve the vacant buildings in the Commercial Historic District. Few small cities have such a wealth of historic structures; to begin tearing them down would be to throw away one of Crookston’s best prospects for reinventing itself as a cultural destination. It is not enough, of course, simply to keep the Palace/Wayne Hotel and other landmarks standing; suitable uses must be found for them. But the first step is to stop thinking of the buildings of the Historic District as albatrosses around for the community’s neck. On the contrary, they are an asset, and potentially a very valuable one. We strongly recommend the establishment of a task force consisting of Kay Hegge as head of the Prairie Skyline Foundation, Mara Wittman of the Northwest Minnesota Arts Council, a representative of the Valley Crossing Arts Council, one or two working artists, and one or more members of the Crookston city staff. Its long-term goal should be to preserve and recycle as many of Crookston’s historic buildings as possible. As its first order of business, it could devise a plan for the temporary use of vacant ground-floor commercial spaces throughout downtown Crookston as galleries, “pop-up” stores, venues for special events, and the like. The Arts Commission of Greater Toledo, Ohio (www.acgt.org), has a program that could serve as a model: it created an “art zone” in downtown Toledo that uses vacant storefronts for a variety of arts-related purposes. This is an economic development strategy: the goal is to benefit downtown Toledo by bringing people into the city center and to benefit individual property owners by bringing much-needed attention and income to their properties. Another relevant example is in Macon, Georgia, which has converted a portion of the underutilized Macon Mall into space for artists; for details, see (http://www.macon.com/2010/05/30/1144927/retail-space-makes-way-for-art.html).

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We also recommend a very insightful book: John Villani’s The 100 Best Small Art Towns in America: Discover Creative Communities, Fresh Air, and Affordable Living, available from Amazon and other sources. This 1998 volume profiles smaller communities throughout the United States that have successfully transformed themselves into arts destinations and now have thriving arts-based economies. Many of them, like Crookston, began with little more than a cluster of vacant or underutilized downtown buildings. The three Minnesota communities profiled in the book are Stillwater, Lanesboro, and Grand Marais; of these, only Stillwater is larger than Crookston; Grand Marais has about 1,400 residents, Lanesboro fewer than 1,000. Stillwater, like Crookston, is a small city near a metropolitan area, but Lanesboro and Grand Marais are both well off the beaten track – proof that creating an arts destination requires neither a large population nor proximity to a larger city. We believe that Crookston has the potential to become another Minnesota “small arts town” with a flourishing economy based on the arts, recreation, and tourism. The buildings of the Commercial Historic District are ideally suited to such uses, in part because historic districts are themselves natural tourist attractions – as Stillwater and Lanesboro, among others, have discovered. The idea of transforming the vacant Cathedral into a visitors’ center and museum has already been discussed; we think it has considerable merit and would represent a complementary use. The upper floors of the Fournet building and the Eagle Drug Store building, which formerly housed meeting rooms for fraternal groups, have potential as dance studios. Too many communities look at their older buildings and see only liabilities. We hope that Crookston will recognize the true potential of what it has in its downtown core. An economic strategy that uses the historic buildings of downtown Crookston as raw material would be highly achievable and relatively inexpensive – the buildings, after all, are already in place – and over time it could lead to a new identity for this community. Artspace would be happy to participate in the design of such a program.