Defective arts loan program administration moves to Grants for the Arts

By Aldrich M. Tan

May 9, 2006

City officials approved for the administration transfer of a defective neighborhood arts loan program at the Government Audit and Ordinance committee meeting on Monday.

The committee passed an ordinance to move administration of the Nonprofit Performing Arts Loan Program from the Mayor's Office of Housing to Grants for the Arts and allow Grants for the Arts to develop criteria for loan forgiveness.

"I hope this will ensure that local nonprofits arts programs will find ways to pay their loans back," Supervisor Tom Ammiano said.

The ordinance is one of the many made by the San Francisco Arts Task Force to restore arts funding throughout the city, said Tony Kelly, Task Force vice chair.

"We hope this change in leadership will revive the neighborhood arts programs," Kelly said.

Launched in 1984, the program made 22 loans to small neighborhood arts organizations totaling $2.3 million, said Matthew Franklin, executive director of the Mayor's Office of Housing.

"The loan program was formed during a crisis," said Kary Schulman, Grants for the Arts director. "Organization spaces were being shut down because they didn't meet safety requirements. These loans intended to maintain the buildings for nonprofit arts use."

The Nonprofit Performing Arts Loan Program led to the development of two theatre spaces, the employment of 500 full- and part-time employees and 2,000 performances throughout the city, Franklin said.

15 of the program's clients still continue to serve the community, Franklin said. Richard Livingston, managing director for EXIT Theatre, said his organization took out a loan from the program for $90,000.

"We took an abandoned storefront and, 13 years later, we continue to provide alternative and safe forms of entertainment for the 1900 block of Eddy Street," Livingston said.

However, the EXIT Theatre has not been very financially successful and finding a way to pay back the loan is challenging, Livingston said.

"The loan has been a burden on our organization," Livingston said.

Only five of the loans have been paid back in full, Franklin said. He cited several problems in the program's existing management, including poor oversight and lax recordkeeping.

"I agree with the committee's disappointment in the program," Franklin said. "The program left some of its clients in too much debt for too long."

Grants for the Arts is suited for the program's management because the agency has experience dealing with community-based performing arts programs, Franklin said.

"I believe that Grants for the Arts has the ability to take on this program, cleaning it up and get it back in solid shape," Schulman said.

"Good luck with it," Ammiano said to Schulman.

Supervisor Aaron Peskin said he was pleased with the exchange and moved for approval of the ordinance.

"This is the third time that we heard the issue in several months," Peskin said. "I think that we finally got it right."

Livingston said he looks forward to working with Grants for the Arts.

"I think that this exchange is going to create policies that are fair and equitable and will benefit the city's performance arts community," Livingston said.

The ordinance is one of the many recommendations that the San Francisco Arts Task Force presented to the committee on April 24 to restore arts funding in the city, vice chair Kelly said.

Based on the task force's presentation, Ammiano said he made three specific recommendations. Ammiano requested for the city attorney to draft legislation including each of the recommendations so he can introduce it to the Board in order for discussions to begin around which actions can be taken to strengthen the administration of city arts funding.

Ammiano said he would work with chair of task force to put together a planning council of five or more members from the San Francisco Arts Task Force to begin more in depth study around the more contentious recommendations. The council would work with the Office of Economic Analysis and the budget analyst to study those issues in-depth.

Ammiano also requested the clerk of the Board of Supervisors to draft a letter to the Budget and Finance Committee that would recommend for discussions to occur with this year's budget process on developing a process to fully restore the arts funding that had been cut over the last ten years.

Kelly said he is impressed with Ammiano's efforts to fully restore citywide arts funding.

"Ammiano is clearly championing the arts community," Kelly said. "He has made the city a better watchdog in regards to the arts."

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