As community leaders recognize the role of creative arts and culture in sustainable economic development, cities and states are seeking new ways to amplify the positive effects of this sector.

The creation and promotion of cultural districts has increasingly become a successful strategy for communities to rehabilitate historic neighborhoods and revitalize downtown areas.

The Texas Cultural Trust retained Texas Perspectives, Inc. (TXP) to consider strategies to document the success of cultural districts and potential return on investment. As part of this process, TXP interviewed Texas cultural districts representatives; reviewed similar programs in other cities and states; developed a standard scorecard that could apply to the cultural districts; and created a methodology to project the economic impacts of those areas on Texas cultural districts. From this research emerged important lessons, key strategies for success, and potential incentive structures for emerging cultural district programs.

To assist local and state arts stakeholders in measuring and communicating the progress of these zones, TXP identified four key performance indicators that apply regardless of location or size. Population and employment speak to the general attractiveness of the area to residents, tourists, and local businesses. Many of the existing cultural districts are in the urban core or downtown part of the community. The cultural districts are also serving the broader role of economic development driver to stimulate growth and redevelopment in these areas. Property tax base and taxable sales measure tax revenue and return on investment to the public sector. No set of indicators will perfectly capture the quantity, quality, and diversity of the cultural districts. If a cultural district successfully implements its strategic plan, these indicators should move in a positive direction.

Since the Texas Cultural District program is in its infancy, there are not existing impact studies for the districts. However, it is possible to overlay the experiences in non-Texas cultural districts to generate an order of magnitude estimate for each cultural district. Based on the economic impact analyses of other cultural district programs, two approaches emerged that are useful methodologies to forecasting the economic and tax revenue impact of Texas cultural districts over time: 1) the impact associated with promotion and event planning activities by the cultural district organization and 2) changes in property value for parcels within the culture district.

Texas’ Cultural District program has the potential to be a leading statewide catalyst for economic development. The willingness of communities to complete the application process that requires bringing together diverse local stakeholders, developing a detailed funding plan, and documenting strategies and tactics bodes well for long-term success. After reviewing the programs in other states and cities, a series of adjustments and recommendations emerged that would improve the competitiveness and viability of the Texas model. In addition, these changes should make it easier to encourage other communities to participate in the Cultural District program.

  • Recommendation #1 – Modify the boundary requirements to ensure that private sector spillover effects are included in the cultural district.
  • Recommendation #2 – Develop specific state and local tax revenue funding mechanisms.
  • Recommendation #3 – Encourage cultural district communities to submit annual metrics.
  • Recommendation #4 – Create a standardized visitor tracking survey used by all cultural districts.
  • Recommendation #5 – Consider strategies or programs that assist interested communities in building the cultural base needed to qualify for cultural district designation.

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