San Francisco Examiner: Savvy group sees homes for art groups in low building prices

Ken Ikeda, CEO of Community Arts Stabilization Trust — a nonprofit dedicated to securing real estate for arts and culture groups — said he feels a strong sense of urgency because of the way San Francisco’s commercial real-estate values have crashed in recent years.

“There are office buildings where millions of dollars have been invested, they’re worth sometimes 70, 80% less than what they were six, seven years ago,” said Ikeda, who took the helm of CAST in September 2023.

“We realized quickly when I joined that the market had shifted to a point where it made sense to go after larger-scale buildings,” said Ikeda, an experienced hand at cobbling together financing from disparate sources to buy properties for public media organizations.

“We’re focused on that opportunity,” he said.

Founded in 2013 to prevent displacement of cultural organizations amid soaring real-estate prices, CAST’s primary funder has been the Oakland-based Kenneth Rainin Foundation, but it has received philanthropic support from other companies and organizations.

CAST has acted decisively to take advantage of current real-estate market conditions. It announced in February that together with partner KALW Public Media it had purchased the historic Warfield Building at 988 Market St. for $7.3 million in order to create an arts, culture and media hub.

In December, CAST also loaned $1 million toward a $3.2 million purchase of 457 Minna St. and a neighboring lot, which the Filipino American Development Foundation now jointly owns with CAST. A $2.89 million grant from the API Equity Fund helped with the purchase and is funding tenant improvements at the site, which last sold for a combined $9.7 million.

And CAST is currently helping spearhead a plan to create The City’s largest combined artist studio and exhibition space in the 122,000 square-foot Pier 29 on the northern waterfront.

CAST brought the opportunity to activate the long-dormant Pier 29, a property that city officials say has been hard to fill for a variety of reasons, first to the Port and then to Art and Water — a new organization formed by the Hawkins Project, a San Francisco-based foundation associated with author Dave Eggers’ youth and culture nonprofit endeavors, and J.D. Beltran, an artist, educator and longtime member of the San Francisco Arts Commission. Art and Water will be the anchor tenant.

“It will be constantly active every day of the year, with an emphasis on education, accessibility and inclusion,” Eggers told a San Francisco Board of Supervisors committee this week.

The San Francisco Port Commission has already approved a two-year lease with options to extend for two more years and plans to provide CAST up to $500,000 for property improvements.

City officials have expressed eagerness to see life brought to Pier 29, which can hold thousands of people and is advantageously situated for attracting tourists between the James R. Herman Cruise Terminal and the Ferry Building to the south and the Pier 33 Alcatraz ferry landing and Fisherman’s Wharf to the north.

CAST always partners with anchor cultural organizations and seeks for those entities to have equity in whatever projects it is pursuing. CAST typically either retains interest in purchased properties or includes deed restrictions to ensure sites can only be to other arts nonprofits. Pier 29 is the first project CAST has pursued that doesn’t involve a property purchase or long-term ground lease.

“We’re really focused on community ownership with the promise that these properties won’t be flipped if the market dramatically shifts, because we’re really focused on antidisplacement,” Ikeda said.

In the case of the Warfield Building, Ikeda had known James Kass, KALW’s new executive director, for about 20 years from Bay Area nonprofit circles.

KALW has long operated from the campus of Philip and Sala Burton Academic High School in the southeastern corner of The City, which Kass said was great but provided no foot traffic.

Since October 2023, KALW has had a satellite operation downtown in a space provided virtually free of charge as part of the public-private Vacant to Vibrant program, which seeks to get empty storefronts occupied. The success of the events KALW has hosted there underscored the need to find a home that could enable more community interaction, Kass said.

After nearly a year of searching, CAST and KALW succeeded in buying the Warfield Building, into which a developer had invested significant resources in what was in part an effort to convert offices to residences. Both organizations will both move into the building, Ikeda said.

“It was available,” Kass said. “It was the right place, right time, right price.”

Kass said he’s also hoping for KALW to use the neighboring Warfield theater for events.

Ikeda said one immediate goal is is to fill the structure with other organizations in areas such as arts, culture and media. Some floors were well-fitted out by previous tech-industry tenants and have only been lightly used, Ikeda said.

“These are incredible digs to build a future around,” he said.

CAST got its start helping to buy 80 Turk St., a 9,418 square-foot former adult-entertainment theater. It set up a lease-to-own arrangement there with CounterPulse, an experimental performance-arts group, which in 2023 took complete ownership of the building. CAST invested $3 million and helped land more than $1.8 million in federal tax credits to subsidize a total project cost of nearly $6.2 million.

In tandem with the CounterPulse initiative, CAST teamed up with another arts organization to buy the historic three-story Walker Building at 1007 Market St., which is currently the home of Hospitality House‘s Community Arts Program. The $4 million renovation project opened in 2016 after CAST invested $2.6 million and helped get $1.2 million in federal tax credit subsidy.

In 2019, CAST invested about $6.3 million and helped get $3.1 million in tax credit subsidy to buy and transform the historic Dempster Building at 447 Minna Street, a $13.2 million project that opened in 2022. CAST has been headquartered in the multitenant arts structure.

CAST also contributed $1 million and helped get $4.7 million in federal tax credit subsidy to install an arts center and youth arts-education hub in the Geneva Car Barn and Powerhouse in the Outer Mission. CAST partnered with the San Francisco Recreation and Parks Department and the nonprofit Performing Arts Workshop on the project, which opened in 2020.

In addition, CAST invested $2.5 million to the $8.1 million Oakstop cultural-hub project at 1721 Broadway in Oakland, which was announced in May 2023.

And CAST is investing $2 million and is working to secure $9.3 million in federal tax credit subsidy in support of the commercial portion of the massive Black Cultural Zone — Liberation Park project in Oakland.

Aside from buying real estate, CAST has also consulted with Brookfield Properties about how to foster a thriving arts community in the massive Pier 70 development on the Central Waterfront south of Mission Bay.

In addition, CAST since last year has been working along with The City to support the GLBT Historical Society‘s efforts to secure 2280 Market St. as a home for a LGBTQ history museum and archives.

Ikeda said that in the future, he would like to see CAST partner with other organizations to develop affordable housing for artists.

For the moment, however, he’s on the hunt for funding and arts organizations capable of pursuing real-estate deals before the historic pricing window that is now open closes.

“We need to be able to secure low-cost capital, because this generational market, it’s still there. It hasn’t disappeared yet,” he said. “And so frankly, the active question for us is which anchor partner can we move quickly with?”

Real-estate machinations aside, the need for partners is the true bottom line, Ikeda said.

“We only exist so long as these arts organizations exist,” he said.

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