2016 11 15 ddec design plan for the development of the fine arts industry in puerto rico by DDEC

CONFIDENTIAL MAY NOT BE EDITED OR DISCLOSED WITHOUT THE EXPRESS WRITTEN CONSENT FROM THE AUTHORS

DESIGN PLAN

FOR THE

DEVELOPMENT OF THE

FINE ARTS INDUSTRY

IN PUERTO RICO Prepared for

: CPA, MR. ALBERTO BACÓ BAGUÉ, ESQ. DEPARTMENT OF ECONOMIC DEVELOPMENT AND COMMERCE ("DDEC") SAN JUAN, PUERTO RICO

Prepared by

: GOÁS/PSC, CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS GLOBAL ECONOMIC & MARKETING SERVICES, INC.

Date

: November 15, 2016

DESIGN PLAN

FOR THE

DEVELOPMENT OF THE

FINE ARTS INDUSTRY

IN PUERTO RICO Note: This document will be used only for internal purposes of the Department of Economic Development and Commerce ("DDEC"). The information herein contained shall not be disclosed, photocopied, reproduced, published or in any way distributed to any party without the express consent from the authors, Goรกs/PSC, CPA'S & Consultants; and, Global Economic & Marketing Services, Inc.

Acknowledgments

Most sincere gratitude to all, special mention to: Department of Economic Development and Commerce (DDEC) Ms. Neyda L. Martínez Sierra Mr. Ignacio Villeta Jesús Goás, CPA & Consultants GEMS, Inc.

Table of Contents

Nature of Engagement ................................................................................................................

Pages 3

Background .........................................................................................................................

Scope ....................................................................................................................................

Present Assessment: Fine Arts Industry in the United States ............................

Art Dealers and Galleries ...................................................................................

Fine Arts Schools ................................................................................................

On-Line Art Sales ...............................................................................................

Puerto Rico Situation...........................................................................................

Lessons from the Field : Major American Cities .................................................

Chicago ...............................................................................................................

New York City ....................................................................................................

New Orleans .......................................................................................................

Los Angeles ........................................................................................................

San Juan, Puerto Rico .........................................................................................

Fine Arts in Puerto Rico - Vision ..........................................................................

Creative Industries ....................................................................................................

Business Plan For The Fine Arts Initiatives In The Creative Industries ..................

Artists ..................................................................................................................

Galleries ..............................................................................................................

Museums .............................................................................................................

Phase IV

Integration of Laws 20/22 to the Fine Arts Initiative ..........................................

Phase V

Findings ...................................................................................................................

Moving Forward .................................................................................................

Next Steps ...........................................................................................................

Phase I

Phase II

Phase III

Appendices Appendix Appendix

I: Organization Charts II: Report of "Industrias Creativas in Puerto Rico"

Appendix

III: Entities related to Fine Arts in Puerto Rico

Appendix

IV: "Ley para Fomentar Industrias Creativas de Puerto Rico", Ley NĂşm. 173 del 2014

Appendix

V: Sample Survey Questionnaire:

Appendix

VI: Interview Design

Appendix

VII: List of Interviews

Appendix Appendix

VIII: References, Sources and End Notes IX: Festivals and Festivities of Municipalities - Cultural Promotion Calendars X: Museums in Puerto Rico XI: Puerto Rico's Institute of Culture - Route of Museums "La Ruta de Museos del Instituto de Cultura de Puerto Rico" XII: Business Plan Model for Art Galleries XIII: Biographical Sketches

Las Hijas del Gobernador, JosĂŠ Campeche

"SAN JUAN, PUERTO RICO, HAS EVERYTHING A BURGEONING ART SCENE NEEDS: TALENTED ARTISTS, AN ART SCHOOL, MUSEUMS, COLLECTORS, A FEW COMMERCIAL GALLERIES AND, UNTIL RECENTLY, AN ART FAIR..." (CIRCA, 2005-10) - Pablo Leรณn de la Barra, Art Cities of the Future, @Phaidon Press Limited 2013

NATURE OF ENGAGEMENT BACKGROUND Culture has been recognized as a key component of the infrastructure of a country, more so, as the fourth stone of a nation's development. According to the United Nations Educational, Scientific and Cultural Organization (UNESCO), creative industries are those sectors related to the creation, production and the commercialization of "inputs" or intangible materials, which are commonly protected by copyright; but may be seen as goods and services, which sectors are characterized by:  exhibit the an interaction between economy, culture and laws;  incorporate the creativity as the production central component;  promotion of artistic cultural or patrimony expressions;  the production and promotion of activities, goods and services, which frequently are protected by intellectual property, copyright and related rights;  sectors with dual purpose, including: culture (promotion of moral values, meaning and identity), and, promotion of employment and wealth  these sectors entail the difficulty of accurately anticipating the response from the public and the demand for such intangibles. In terms of access and location, San Juan, as capital city of Puerto Rico, houses close to 44% of all cultural organizations. Moreover, breakdown of business for the period of years 2000-2012, is presented in the chart that follows. Both categories, artist, writers and independent arts and promoters of arts representations presented positive growth for the years 2010-2012.

Puerto Rico Businesses Breakdown (2007-2012) Industry Description

Change percentage (2010-2012)

2007

2008

2009

2010

2011

2012

Video and Cinematography industries

-.91%

Radio and TV Broadcasting

2.63%

Promoters of arts representations, sports and similar events

2.60%

Arts representation companies

Artists, writers and independent arts representatives

4.8%

Museums, historical sites and similar institutions

-5.0%

Also, in terms of employment figures for the same six industries, it can be observed a solid positive behavior during recent years 2010-2012.

Puerto Rico Employment Breakdown (2007-2012) Industry Description

2007

2008

2009

2010

2011

2012

Change percentage (2010-2012)

Video and Cinematography industries

1,750

1,685

1,750

1,577

1,599

1,534

-.91%

Radio and TV Broadcasting

2,136

2,055

1,921

1,769

1,773

1,780

-.21%

Promoters of arts representations, sports and similar events

484

492

474

396

386

440

3.70%

Arts representation companies

227

307

200

215

231

290

11.63%

Artists, writers and independent arts representatives

137

148

108

103

102

5.75%

Museums, historical sites and similar institutions

266

316

353

345

304

313

-3.10%

The above categories of creative industries form part of arts and culture. The latter, also bring together leisure and hospitality.

The arts, entertainment and recreation industry is, further, comprised by facilities or studios that provide services to meet cultural, entertainment and recreational interests of their patrons. These studios are engaged primarily in creating works of art using various media and materials. The typical labor force is an artist, artisan or craftsperson, sometimes assisted by other artists, artisans, craftsperson or apprentices. Conservators operating on their own account and independent photojournalists are also included. This industry also includes independent (freelance) entertainers and artists and the agents that manage their careers. Also, it makes a clear distinction between performing arts companies and independent artists and performers. The independent artists, writers and performers group comprises independent individual (freelancers) primarily engaged in performing artistic productions, creating artistic and cultural works or productions, or providing technical expertise necessary for these productions. The art market on a global scale is not one but a regional niche market. In the United States and Europe, the cultured professional classes have always invested on art and continue to do so. Recently, in 2014, the European Fine Arts Foundation, issued a market report indicating that: "average fine art auction prices increased by 82% and 100%, respectively in Britain and the United States from 2009 to 2013, far outpacing the growth rate of many professional salaries since the 2008 financial crash". Meanwhile, the UNESCO acknowledges that the functions of creative industries: "not only contribute to economic growth and the creation of employment, but also acts as salient element in the dissemination of the cultural identity, aspect that is essential in the diffusion and promotion of the cultural diversity."

SCOPE Within the creative industries, a key component is the fine arts. Such fine arts industry, encompasses arts and entertainment, which can be grouped into three blocks. One block groups: Theater, Dance, Opera, Symphony, and others. A second block focuses on independent artists, writers, performers and performing arts companies. A third block brings together a variety of types of museums, such as: Art Museums, Botanical and Zoological Museums, Children's Museums, Historical Sites Museums, History Museums, Natural History Museums, National Parks Museums, Science Museums, and other Museums. The Fine Arts Initiative in Puerto Rico intends to connect the world's premier galleries and their patrons, as well as serving as a meeting point for the international art world and for the regional interchange of Hispanic art. In that process, it would attract international galleries and collectors to San Juan, Puerto Rico. The main purpose is to establish the guidelines and the practical framework for an Arts Ecosystem of Creative Industries, in particular Fine Arts. The Fine Arts Initiative in Puerto Rico (FAIPR) aims to work together to further develop Puerto Rico as a cultural destination. The FAIPR will provide a platform for galleries and artists from around the world, specifically from Hispanic cities, regions and countries. FAIPR will facilitate the Galleries' role in development and promotion of visual arts. FAIPR will also stage: art shows, art fairs, exhibitions, and, cultural events held at public museums, at private collections, and at non-profit spaces and art galleries.

FAIPR will establish a global outreach programs for individual artists and institutions. Arts and cultural organizations provide the necessary background to Fine Arts initiatives. The former encompasses a wide array of personnel/labor varying from: teachers, managers, musicians, singers (performers), general office workers, ushers, fund raisers, and others.

El Velorio, Francisco Oller

"WHILE PUERTO RICO MIGHT HAVE MORE COLLECTORS PER ARTISTS THAT ANY OTHER NATION IN THE REGION, MANY TEND TOWADS INVESTMENT PAINTINGS SOLD BY NEW YORK GALLERIES RATHER THAN WORK PRODUCED BY LOCAL ARTISTS ON THE LOCAL SCENE."

- Pablo Leรณn de la Barra, Art Cities of the Future, @Phaidon Press Limited 2013

PHASE I PRESENT ASSESSMENT: FINE ARTS INDUSTRY IN THE UNITED STATES Arts and culture contribution to the U.S. economy has been and is unique. Arts and cultural production as defined in the United States of America, is consistent with that of the European Union. The definition of art and culture includes creative artistic activity, the goods and services produced by it; the goods and services produced in support of it, and the construction of buildings in which it is taking place. A leading government agency, Bureau of Economic Analysis, recently, 2015 has set up satellite accounts to measure the contribution of art and culture and its wide ramifications. For the year 2012, the production of arts and cultural goods in the United States was $698 billion, which amounts to 4.32% of its Gross Domestic Product ("GDP").

For that year,

American GDP was $16,157.40 billion. Meanwhile, the performing arts and independent artists ("PA&IA"), amounted to 35.4 billion or, .22% of the GDP. For the previous year, 2011, the GDP was $15,750 billion, and arts and culture represented 504 billion, or 3.2% of the GDP. Likewise the PA&IA added $48.9 billion, or .31% to the GDP. Looking at the trade balance of first years for the 2000-2010 decade, one can assert that prior to 2008, the United States ran a trade deficit in arts and cultural goods and services. However, in 2011, the United States exported $10.4 billion. At the same time, this sector employed 2.0 million workers and generated $280.5 billion in employee's compensation. The chart that follows shows the contribution of arts and culture (A&C) as a percentage of the GDP.

A&C

2000 3.5%

2001 3.5%

2002 3.7%

2003 2004 3.64% 3.7%

2005 2006 2007 3.63% 3.57% 3.3%

2008 3.3%

2009 2010 2011 3.20% 3.24% 3.35%

The average for the period of years 2000-2011 is within a range of 3.5% - 3.7%.

Concerning the output and value added by this industry, also can see its behavior, as depicted in the chart that follows: Year

American Economy - Arts & Culture - Output and Value Added

2012

Industry

Group A/

Core and Cultural Production

Group B/

Output

Value Added

$221,181

$129,011

Performing Arts

$81,267

$45,079

Museums

$11,520

$5,075

Design Services

$114,951

$71,277

Arts Education

$13,442

$7,581

$869,321

$547,003

$41,753 $1,132,254

$22,681 $698,695

Supporting Arts and Cultural Productions All other industries Total

As reported by the U.S. Bureau of Labor Statistics, the Standard Occupational Classification (SOC), system is used to classify workers and jobs into occupational categories. The Standard Occupational Classification is designed to reflect the current occupational structure of the United States, and it classifies all occupations in which work is performed for pay or profit. The table that follows gives a breakdown of key economic indicators for the arts and cultural industry occupations.

TABLE: Occupations for arts and culture industry in the American Economy: Labor Force and Earnings. Years 2012-2015 Occupation Archivists

Occupation al Code

Employment

Earnings

254011

5,640

$47,340

Years 2012-2015 % of occupation Industries Employing: self employed Government, colleges, 2.4% universities, private schools

Curators

254012

10,370

$49,590

Museums and historical sites, colleges, universalities, private schools, government

2.6%

Art Directors

271011

31,570

$80,880

Advertising and public relations, publishing, motion pictures

59.1%

Craft Artists

271012

4,810

$29,600

Independent artists, writers, performers, manufacture of mineral and clay products

59.8%

Fine artists, including painters, sculptors and illustrators

201013

12,480

$44,850

Independent artists, writers, performers, publishing, motion pictures

59.0%

Multimedia artists and animators

271014

29,270

$61,370

Motion pictures, computer systems design, advertising

58.8%

Artists and related workers

271019

6,850

$59,840

Personal care services, motion pictures, independent artists, writers, performers

57.6%

An overview of the Arts and Cultural production account for the year 2007, using as benchmark the Input - Output accounts, provide a detailed look at the relationships among industries, estimating each one's contribution to the GDP, and at its annual statistics. These statistics are grouped under two broad headings: core arts and cultural productions; and the supporting arts and cultural production. In particular, the core arts and cultural production includes the commodities in which output is identified as primarily contributing to Arts and

Culture; the performing arts is a leading component in terms of compensation and employment, as seen in chart that follows.

V.A.

Output

Compensation Million $

Employment (000's)

Core Arts and Cultural Production

$129,011

$221,181

$63,544.2

956.4

Performing Arts

$45,079

$81,767

$16,728.4

237.5

ART DEALERS AND GALLERIES Art dealers and galleries industries comprises a number of companies that display and sell original and limited editions works of art.

In terms the North America Industrial

Classification System, ("NAICS") it represents 453,920 or Standard Industrial Classification ("SIC") 5,999. Major markets for art dealers and dealers and auctions include as a first tier, the United States, China and the United Kingdom; and, as a second tier, Austria and Australia. In the United States, the arts dealers and galleries industry includes close to 5,000 establishments either single location, or units of multi-location companies. Its revenues for the year 2015 were about $20 billion. Meanwhile, global sales of art and antiques totaled $64 Billion U.S. Dollars in 2014, up 7% from previous year, as reported by the European Fine Arts Foundation, ("TEAF"). Major markets for art dealers and auctions, according to TEAF, are the United States which accounted for 39%, followed by China and the United Kingdom with 22% each of the global sales in 2014. FINE ARTS SCHOOLS The Fine Arts Schools Industry primarily includes establishments that offer instruction in the arts, dance, drama music and photography. This industry does not include: (1) programs that

offer academic degrees; or (2) commercial and graphic arts and commercial photography instruction. Primarily, it consists of four schools: visual arts, dance, theater and combined ones. Its activities provide instruction in a number of areas: art, ballet, ceramics, dance, drama, music, sculpture, voice and two others, photography and handcrafts.

On-Line art sales This industry primarily retails or auctions original and limited-edition artwork. Artwork is purchased from artists, individual owners and other dealers for resale or auction to consumers. Online art sales will continue to grow steadily as consumers increasingly use the internet to bid on art auctions. The market for online art sales will continue to benefit from an affluent and global customer base. Its revenue was $848 million in 2015, while its annual growth rate for the period of years 2011-2016 was 5.9%. Its industry's value added is forecasted to increase at an annualized rate of 9.6% during the next years up to 2020. A closer look at industrial classification 711, performing arts, etc., in particular, subclassification 711500, independent artists, writers and performers, and sub-classification 712000 museums, historical sites, etc. reveals the following behavior. The Bureau of Economic Analysis (BEA), from the satellite accounts established in 2015, determined that core arts and cultural industries, such as performing arts and museums grew 3.3% in 2013 in comparison with 1.1% income in 2012. Output for previous years 2007 to 2012 for core arts and cultural productions can be seen in the Chart I that follows.

Likewise, the BEA determined that the value added for the same arts and cultural production industry, and in particular, independent artists and others grew every year, as described in Chart II below:

Meanwhile, employment generated for these industries can be seen in Chart III:

In the end, within performing arts, the museums have contributed to expansion of the economy. For the year 2007, the BEA estimated, also, that its commodity output multiplier was at 1.76. The output in millions of dollars for selected arts and cultural good and services increased for three consecutive years: Selected Commodity (Years)

Gross Output (Millions $) 2011

2012

2013

All arts and cultural

$1,077,145

$1,125,431

$1,172,890

Fine Arts Education

$5,190

$5,396

$5,578

Independent Artists and Performing Arts

$28,999

$31,602

$32,143

Source: Bureau of Economic Analysis, U.S. 2013

Puerto Rico Situation Art, Authenticity and Culture are defining elements of today’s global economy. While globalization moves toward a staid homogenization; increasingly, cultural distinctions become an important competitive advantage and an important principle in economic development of local economies. Economists often emphasize the importance of focusing on what is unique about a place, location or community. By building upon the island’s rich cultural legacy, as well as its human capital, assets and strengths, Puerto Rico is poised to animate these forces to reignite a renewed competitive advantage towards the development of a robust arts ecosystem. Puerto Rico’s vibrant and knowledgeable artistic community is poised to come together to design innovative arts and cultural opportunities towards the development of sustainable businesses. In today’s crowded and uniform marketplace, emphasis on the distinct and unique aspects of Puerto Rican arts and culture can be harnessed for the development of a thriving arts and culture landscape. As markets for cultural products and cultural tourism continue to grow, and as technological capability continues to become standard and universal, the competitive advantage can shift to an arts and culture local economy for engagement with regional, hemispheric and international marketplaces. Puerto Rico has an opportunity to create new pathways to develop new business opportunities with its original and authentic product, content and experiences. Thus, the purpose of this opportunity design is to, present a range of suggestions on what a diverse and robust visual arts ecosystem in Puerto Rico could look like. Moreover, the “menu” of recommendations in this document are not intended to serve as mere “cut and paste” solutions. Rather, they are provided in the hopes of spurring further inquiry and conversation with local

leadership to help ensure buy-in, consensus, and to foster a desire to “work together” in support of building a vibrant fine arts sector in the Island. While the business opportunities can expand to include a broad swath of arts and culture industries –i.e. advertising, marketing, design, fashion, film and more; this document intentionally focuses on the creative industries specific to the visual fine arts in Puerto Rico, and in particular, in the San Juan metropolitan area. Assets in the San Juan Metro Area: -

Casa Cortés’ art gallery on upper floors

Museo de Las Américas

Museo de Arte Contemporáneo de Puerto Rico (San Juan)

Walter Otero Contemporary Art

Museo La Casa del Libro (San Juan)

Age Art Gallery (San Juan)

Museum of our African Roots (Museo de Nuestra Raíz Africana) (San Juan)

Espacio 1414, (Berezdivin Collection), Santurce

Petrus Gallery, Miramar, San Juan

Botello Gallery (San Juan)

Museo de Arte de Ponce

Centro de Bellas Artes Luis A. Ferré

Coliseo de Puerto Rico José Miguel Agrelot

One of the critical components of the fine arts industry in the United States and Puerto Rico are the museums. The leading museum in Puerto Rico are: the Ponce Art Museum; the Puerto Rico Art Museum and the Puerto Rico Museum of Contemporary Art.

Ponce Art Museum. Its collection is comprised of more than 4,500 works of art from many cultures, dating from the 9th century to the present. This collection includes paintings, sculptures, prints, photographs, drawings, decorative arts, pre-Hispanic and African objects, Puerto Rico folk art, contemporary ceramics, video and sound desk. Puerto Rico Art Museum. Straddling the border between San Juan's Condado tourism hub and its cultural heart of Santurce, the Puerto Rico Art Museum is accredited by the American Alliance of Museums and an affiliate of the Smithsonian Institution. This gleaming facility grew out of a neoclassic structure used as a hospital built and designed by architect William H. Schimmelpfennig in 1920; it was transformed into a contemporary museum, in accordance with the strictest and most modern standards for this use. Within its 130,000 square feet of space it includes 24 exhibition galleries, a theater, workshops, an interactive area for children, and a research area, among others. Works in its permanent collection includes an exhibition representative of Puerto Rican art from the 17th century to the present, as well as world-class temporary exhibitions. Puerto Rico Museum of Contemporary Art. Sitting in the heart of Santurce, the one-time cultural hub of San Juan, that is in the midst of a renaissance, the Puerto Rico Museum of Contemporary Art is located in a former public school built in 1918. The Georgian-style building, designed by architect Adrian C. Finlayson as part of a U.S. Department of Education drive to build public schools in urban zones, has been on the National Register of Historic Places since the late 1980's and was renovated under the direction of Puerto Rican architect Otto Reyes Casanova for its new role as home to the island's top collection of contemporary art.

The permanent collection at the two-story museum at the Stop 18 area includes important works by Puerto Rican, Caribbean and Latin American artists produced from the second half of the 20th century to the present. Beside the presence of museums, there is a need of art and cultural production through the promotion and development. Artists have expressed that: "An accelerating convergence between the economic and the cultural is currently occurring in modern life and is bringing in its train new kinds of urban and regional outcomes, and opening up new opportunities for policy makers to raise local levels of income, employment, and social well-being."(1) To act upon such challenge, Puerto Rico sets a new tone. In an increasingly globalized world culture, creativity and innovation encourage productivity to support the development of local economies. The creative economy is typically defined as the businesses and individuals involved in producing cultural, artistic, and design goods and services. It consists of creative professionals and enterprises that inspire us with their art and unique gifts to transform their concepts and ideas into practical goods, beautiful design, or one-of-a kind original works of art. Creative economies are oftentimes anchored by organizations that provide a venue for artists to exhibit and share their work with the public such as museums, art galleries and theaters. The Fine Arts Initiative in Puerto Rico is an answer. However, to reinforce synergies, both vertically and horizontally, consensus and collaboration among stakeholders is needed to build trust, stimulate networking and exchange of ideas and experience towards the development of creative strategies. Such a diverse cohort can support a vision for an arts ecosystem and its successful realization. These persons can come from the private sector, public authorities (i.e. government agencies, elected officials, or other relevant authorities), foundations, corporations, community leaders, artists and cultural

entrepreneurs. Global outreach from the United Nations Organization, and others, are shaping Puerto Rico opportunities. The UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions notes that arts and culture play an important role in education and lifelong learning, particularly as a means of promoting creative thinking, unlocking the creative abilities of people and helping develop new skills for new jobs in an evolving socio-economic environment. Culture and creativity are inextricably linked. Creativity is at the source of culture which in turn creates an environment that enables creativity to flourish. The most widely used definition for the creative industries is that set forth by the U.K. Department of Culture, Media and Sport (DCMS) in 1998. DCMS defines the creative industries as: those industries which have their origin in individual creativity, skill and talent and which have a potential for wealth and job creation through the generation and exploitation of intellectual property. This includes advertising, architecture, the arts and antiques market, crafts, design, fashion design, film and video, interactive leisure software, music, the performing arts, publishing, software and computer games, television and radio. More recently, the United Nations Educational, Scientific and Cultural Organization (UNESCO) provided a working definition of the cultural industries that explicitly acknowledges the place of traditional arts and culture. It defines the cultural industries as: those industries which produce tangible or intangible artistic and creative outputs, and which have a potential for wealth creation and income generation through the exploitation of cultural assets and production of knowledge-based goods and services (both traditional and contemporary). What cultural industries have in common is that they all use creativity, cultural knowledge and intellectual

property to produce products and services with social and cultural meaning. Puerto Rico has set the FAI within the creative industry program. Support for the local creative industries with policies and initiatives, such as Puerto Rico’s Law 20 and Law 173 increase the competitiveness of the region’s creativity -- by increasing awareness of the island’s creative and cultural capital it has the potential to create new marketplaces for its cultural production beyond the island’s borders.

Mangle, Myrna Bรกez

"GOOGLE BLOOMS IN COUNTRIES WHERE CREATIVITY AND TALENT FOR INNOVATION ARE PRESENT, AS IS THE CASE IN PUERTO RICO. THERE, WE HAVE THE POSSIBILITY TO TEST ALMOST ALL OUR PRODUCTS AND SERVICES, BECAUSE THE ISLAND IS LIKE A 'MINI PLANET': BIO-DIVERSE AND MULTICULTURAL."

Francisco Forero, Google

PHASE II LESSONS FROM THE FIELD: MAJOR AMERICAN CITIES To address the FAI envisioned for Puerto Rico, a number of American cities experience in art and culture production was reviewed. With an eye towards serving as a platform for further reflection and possible adaptation in Puerto Rico, lessons from the field are included with highlights of arts and cultural destinations such as the Mexican American arts corridor in the Pilsen neighborhood of Chicago, Illinois; a sampling of two Puerto Rican/Latino enclaves in New York, NY as well as a scan of New York’s Brooklyn Arts District anchored by the nonprofit campus, the Brooklyn Academy of Music and a commercial venue for sports and entertainment, Barclay’s Center; experiences from African American visionary leadership and cultural activists in New Orleans, Louisiana; the burgeoning new “Arts District” in Los Angeles, California, and newcomer, San Juan, Puerto Rico Additionally, the educational and outreach services provided by nonprofit arts organizations play an important role in training the next generation of creative individuals. And, central to a rich and diverse arts and cultural ecosystem is affordable live/work space for artists and pipelines to retain talent and providing professional development and arts education for the artist and cultural entrepreneur, students and younger generations,

as well as the wider

community if inland residents and visiting tourists. Significant in a holistic arts and culture ecosystem is recognizing the complex and interdependent nature of relationships among arts organizations; artists; and their communities -reflecting the people who live there, and the myriad local complementary businesses and

organizations that are invested in working together to develop, advance, and support cultural policies that influence the production and consumption of arts and culture. Chicago The National Museum of Mexican Art in the heart of Chicago’s Pilsen neighborhood was founded in 1982 by Carlos Tortolero, a visionary leader and former educator and school teacher. The museum’s current building is in Harrison Park. The facility opened in 1987 and is the house to one of the biggest collections in the world of work created by Mexican-American artists, and attendance continues to grow every year. Admission to the museum is free of charge and the museum generates its operating funds through a mix of corporate donors and outside grants. It also houses a book store and arts and craft gift shop with imports from Mexico as well as local artists and craft makers. A traditionally Latino neighborhood, Pilsen is a neighborhood of murals marking various generations and artistic movements. The neighborhood is one of the city’s most vibrant artistic communities. The Pilsen East Artists Open House began in 1970, when a small group of neighborhood artists invited friends and family to their studios for an intimate look at their creative process. At the time, Pilsen was a neighborhood struggling with urban decay.

Efforts by community

artist/activists transformed crumbling residential properties into artists’ lofts. Vacant alleyways became neighborhood gardens. The annual art walk set during the month of October takes place in studios, galleries and cafés along the corridor. Colibrí Studio/Gallery, located at 2032 W. 18th Street, is the central location for maps, tours and information on the event. Another venue is Giron Books, a Spanish language and international bookstore along the 18th Street corridor.

Pilsen is also home to the “greenest street in America.” In 2012, the Chicago Department of Transportation unveiled sustainable technologies and design and “complete streets” principles to improve the urban ecosystem, promote economic development, increase the safety and usability of streets for all users, and build healthy communities. The initiative provides both mitigation and adaptation strategies by reducing its carbon footprint and integrating technologies that allow the infrastructure to address and adapt to climate change. It sets sustainability goals in eight performance areas such as storm water management, material reuse and and energy reduction.

The project was funded largely through Tax Increment Financing, as well as

$800,000 worth of grants from the Federal Highway Administration, Illinois Environmental Protection Agency and Midwest Generation. New York City Manhattan’s experience with artists and arts activities inducing gentrification that eventually displaced the renovators and innovators is well-documented in Sharon Zukin’s, Loft Living: Culture and Capital in Urban Change. El Barrio, also known as Spanish Harlem, long-lives in the imagination of Puerto Ricans of the Diaspora as a place for family, community and vibrant cultural expression. Home to prominent artists such as Jose Morales, Diógenes Ballester, Marcos Dimas, Hiram Maristany, Miguel Luciano and the late Fernando Salicrup, the neighborhood was also the site of cultural resistance through the activism of the Young Lords in the 1970’s. Previous generations counted with figures such as Tito Puente, Rafael Hernández, Rafael Tufiño, a co-founder of El Taller Boricua, renowned poet Julia de Burgos and Johnny Colon’s Latin Music School where upcoming international superstar, Marc Anthony frequented.

Anchoring the neighborhood is El Museo del Barrio on 5th Avenue and 104th Street and most recently the renovation of an old firehouse on East 125th Street and the new home of the Caribbean

Cultural

Center

African

Diaspora

Institute,

founded

Puerto

Rican

scholar/activist/educator, Dr. Marta Moreno Vega. Despite its rich cultural history and legacy, El Barrio remains a fragile arts ecosystem, with artists and families fraught by the encroaching gentrification and zoning changes. A recent stabilizing factor in recent years however is the completion of El Barrio’s Artspace PS109 which garnered support from the Ford Foundation and an association with a local housing-rights advocacy group, El Barrio’s Operation Fightback. By 2009, Artspace had secured more than 20 buildings for housing and work spaces, in which artists could afford to live and work. Then the Ford Foundation approached Kelley Lindquist with a clearly sound proposition: Time and funding to work long-term with distinct cultural communities in order to bring their singular visions for affordable artist live/work housing and community spaces to fruition. Ford’s funding (with support also from Bloomberg Philanthropies, ArtPlace America and other groups) helped transform the abandoned public school building into an arts facility with 89 units of affordable live/work housing for artists and their families -- 87 percent of which are occupied by Dominican, Puerto Rican or African-American families. El Barrio also includes 10,000 square feet of space for local arts organizations, including El Taller Latino Americano (a cultural language and art educational group). “Nationally, it’s been forgotten, or never learned, that arts and culture is a way of healing and a way of overcoming differences, and finding a warmth and love in an expression of culture

rather than focusing on what may be perception of differences,” said Kelley Lindquist, in a public statement. In addition to Artspace another stabilizing factor in El Barrio has been the Lois V. and Samuel J. Silberman School of Social Work at Hunter College which houses a gallery and El Centro de Estudios Puertorriqueños and the Taller Boricua, originally founded in the same year as El Museo del Barrio and which is housed at the Julia de Burgos Cultural Center. In 2001, the Bronx Council on the Arts (BCA) designated a mile-long strip of the Grand Concourse as an area with a high concentration of cultural activity and branded it the South Bronx Cultural Corridor. It has been dubbed the “Gateway to the New Bronx” and demonstrates arts-based economic development in the zone. BCA’s goals for the corridor are to attract visitors, increase commercial activity and engage the community in a variety of South Bronx cultural events. The corridor includes Lincoln Avenue and the Bruckner Service Road up to 165th Street (north to south) and East River to the Harlem River (east to west), all within Honorable José E. Serrano’s Congressional District 16.

It includes light industry, residential, commercial

businesses and major health and educational institutions as well as increasing numbers of artists, designers, artisans, arts organizations and more. The area supports an ample representation of significant cultural non-profit institutions, galleries, and other arts hosting venues including: 

Andrew Freedman Home



Arthur Aviles Typical Theater/BAAD



Artisans Initiative



Boricua/Festival Hispánico



BronxArtSpace



Bronx Museum of the Arts



Bruckner Bar and Grill



Friends of Brook Park



Ghetto Film School



Greenworker’s Cooperative/Rebuilder’s Source



Gordon Parks Gallery at College of New Rochelle



Hostos Center for Arts and Culture



Lincoln Hospital



Longwood Art Gallery@ Hostos



The Point CDC



Pregones Theater



Rebel Díaz Arts Collective



Red Roots



Rincón Criollo



South Bronx Food Cooperative (Saturdays at Nos Quedamos)



Spanic Attack’s The Bronx Salon

On-going attractions and cultural offerings include: 

Bronx Culture Trolley, the first Wednesday of every month (except September and January);



Culture Trolley Saturdays;



Artisan’s Initiative;



Hand-crafted items for sale from Bronx Artworks



Skills and workforce development training via its Fine Arts Service Bureau/Art Handler training program,



Buy Creative! Buy Bronx! Creative Bronx Black Book -- a resource guide of creative services available in the South Bronx. Brooklyn's cultural ascendance has emerged in the last decade with international

repercussion to cities such as Paris and Tokyo.

Anchored by renowned institutions like

the Brooklyn Academy of Music, the Brooklyn Museum and the Brooklyn Public Library, this borough it boasts a host of music venues, art spaces, and theaters. Increasingly, it has become one of the most coveted and expensive districts and boroughs to live in with displacement of communities creating stress among long-time residents, as well the displacement of countless working and emerging artists to other cities as far as L.A. and Detroit. The Brooklyn Cultural District is a major priority project by NYC Economic Development Corporation, the Department of Cultural Affairs, the Department of Housing Preservation and Development, the Department of City Planning, and the Downtown Brooklyn Partnership -- which will provide the surrounding Fort Greene area with the space to thrive as a cultural epicenter for years to come. In the Brooklyn Cultural District, venues range in size from 200-seat quasi-storefronts to the 18,000-seat Barclays Center. The Museum of Contemporary African Diasporan Arts (MoCADA), is a small space; yet its curators have used every inch of it, including the windows and entryway, for the exhibitions At the center of the Brooklyn Cultural District stands its anchor institution, the Brooklyn Academy of Music (BAM), which has been influential in the design and planning of this particular district. It has also been a focal point of the borough’s cultural life since 1861. The

“new” BAM, located on Lafayette Avenue in Fort Greene, opened its doors in 1908. Its remarkable range of theatres, venues, and public spaces now serves more than 750,000 visitors annually. BAM’s facilities include the 2,000-seat Howard Gilman Opera House; the 800-seat Harvey Theater, and flexible 250-seat Fishman Space in the new Fisher building, BAM is the largest presenter of contemporary and international work in all performance disciplines in the United States. A welcomed renovation is Brooklyn BRIC Arts Media (BRIC), which houses a performance space and open art gallery as well as a TV and media center that airs local programs and trains individuals to develop and edit their own shows. BRIC is also home to Urban Glass, the largest glass blowing studio in the United States. Its ground floor shop is a testament to the artistry of these modern-day glass blowers. In the 4th quarter of 2015, BRIC presented a standout solo exhibition of acclaimed Nuyorican artist, Juan Sánchez, curated by Elizabeth Ferrer. Additionally, the district is home to the Theater for a New Audience (TFANA), after a ten-year effort to bring the itinerant TFANA to the District as well as the internationally acclaimed, Mark Morris Dance Group (MMDG) on Lafayette Avenue. New Orleans "For too long we have separated art and culture from what the business community calls economic development. Our citizens are finally recognizing that we are underutilizing our natural assets and raw talents and we are limiting our own potential to create more jobs and growth. . . we must move our state forward by capitalizing on these important assets". Lieutenant Governor Mitchell J. Landrieu Louisiana culture is rooted in the French, Spanish, and Afro-Caribbean influence that predates the 1803 Louisiana Purchase. Subsequent waves of Anglo-Saxon and European

immigrants joined indigenous Indians, African slaves, Acadian exiles, and free people of color in a complex racial, linguistic, and social mix that laid the foundation for todayâ&#x20AC;&#x2122;s diverse culture. While the inevitable mixing of people led to a melding of cultural expressions, strong geographic, racial, and linguistic boundaries preserved distinct cultures that survive to this day. This is a city that draws so much of its cultural heritage and economic and international strength from its Native American, Creole and most notably its African American culture. Against this backdrop, African American led Ashe' occupies three spaces -- Ashe', Ashe' Too, and its latest space, the Ashe' Powerhouse performance center. Ashe was born to provide an authentic narrative about African American life, culture and experiences. The neighborhood had a rich cultural community and legacy but no space in which to present, exhibit and foster creativity and is credited with ensuring equitable measures of community development and artist exhibition and presentations. In December 1998, the Ashe Cultural Arts Center was born in a then-underdeveloped area of Central City, inside the old Kaufman's department store on Oretha Castle Haley Boulevard. Asheâ&#x20AC;&#x2122;s physical capacity expanded with a state-of-the-art campus, the Ashe Power House located at 1731 Baronne St., just around the corner from Ashe's existing Oretha C. Haley Blvd. campus. The new space addresses the growing need for more performance and creative spaces in Central City. Developed by the local nonprofit Gulf Coast Housing Partnership (GCHP), the Power House represents a milestone in the 16-year relationship between the organization and Ashe Cultural Arts Center. Located in the once-blighted New Orleans Public Service Inc., Polymnia Streetcar Substation, the Ashe Power House hosts a performance center and visual arts gallery. Original exposed brick walls line a gallery space equipped with track lighting and exposed steel structures.. Twenty-foot ceilings are perfect for large-scale

installations. The 1924 building, rehabilitated at a cost of $7.4 million, and has more than 10,000 square feet of usable space. Ashe has attracted more than 40,000 visitors a year since first renting and eventually buying the Oretha C. Haley campus developed by the local nonprofit Gulf Coast Housing Partnership (GCHP). Along the Central City corridor where Ashe is located, previously dilapidated buildings are being renovated as part of a redevelopment effort, that took a decade to come to fruition. This was a result, in part, to a 2006 Louisiana Main Street and Cultural Products District designation that helped funnel $40 million of funding into the area following Hurricane Katrina. Additionally, Ashe has been an active voice in authentic community redevelopments that include a $20.6 million mixed-use project spearheaded by the New Orleans Redevelopment Authority (NORA), and The Good Work Network's $1.6 million small business incubator located in the Franz Building. A $900,000 Community Development Block Grant for streetscape improvements has been allocated. Louisiana enjoys a folk art and craft tradition as well as a growing more contemporary art scene. Before the Contemporary Arts Center (CAC) opened in New Orleans in 1975, there was no venue for consistently showing contemporary art. The opening of the CAC occupies an area that was once a skid row and warehouse district; it is presently filled with galleries, residences, hotels, clubs, and numerous art galleries.. Joint season and monthly openings take place at the CAC, galleries, and The Ogden Museum of Southern Art. Over a dozen galleries have opened on Magazine Street.

Also artist-run, in-studio and home galleries have found lower cost

residential and studio space in the Marigny/Bywater area.

The Young Aspirations/Young Artists (YA/YA) program in New Orleans trains young people in commercial, fine arts and entrepreneurial skills. In addition to its own studio facilities, YA/YA places students in apprenticeships with artists and designers to provide the youth with real-world experience in cultural industries. Perhaps the best-known program for young Louisiana artists is the New Orleans Center for Creative Arts/Riverfront School (NOCCA). It offers a pre-professional fine arts curriculum preparing youth for professional careers in dance, media arts, music, theatre, visual arts, and creative writing. Although the school covers all major artistic disciplines, its music program is particularly well known because of an alumni that includes Donald Harrison, Terence Blanchard, Harry Connick, Jr., and Marsalis brothers. Los Angeles Los Angelesâ&#x20AC;&#x2122;s distinctive character stands out among other U.S. cities for its combination of place, resources and open attitudes toward new ideas. The willingness to embrace new ideas facilitates an ability to make associations and connections that other people fail to see -- a hallmark trait of creativity. Thus, creativity continues to be one of the regions' underpinning assets with an arts and culture economy supporting its growth. Previously, culturally overshadowed by the film industry, the art world in the Los Angeles' Arts District is creating a new phenomenon -- a walkable area of town replete with attractive dinner offerings and varied contemporary art shows. Michael Govan, director of the Los Angeles County Museum of Art expressed for the New York Times:

"From 'art

neighborhoods' to warehouse districts located in old industrial areas of downtown, Los Angeles is home to a growing number of galleries featuring contemporary and traditional fine art, paintings, glass art, sculpture, fine art photography and other types of visual art. The presence of

artists and art galleries not only enhances the quality of life for local residents, they are a major draw for cultural tourists as well. Apps and websites such as Curate LA aid locals and tourists alike discover, navigate and explore the many openings and exhibitions around the region." Having been priced out of areas such as Venice and Hollywood, in the 1970s, artists sought new havens. Urban pioneers, artists occupied and transformed hazardous buildings by converting dilapidated spaces for themselves. Eventually, they opened art galleries and began to develop these buildings and preserved a distinctive feature of Los Angeles’s industrial history. The area faced added hardship with an economic downturn in the 1990s. Joel Bloom and his supporters are credited with naming the artist-area as the Los Angeles “Arts District.” Presently, the location boasts a population comprised of an array of artists and creative professionals, as well as professionals in green technologies, architecture and entertainment. A neighborhood on the rise, it is a walkable area -- a unique and distinctive feature given Los Angeles’s highways and geographic spread. Early 20th-century warehouses -- many ex-factories -- are appropriate to artists seeking studio space or loft apartments with exposed brick walls and floor-to-ceiling windows. After a number of years, Los Angeles’s ever-expanding Arts District now boasts more than 24 galleries which have moved into the warehouses and decommissioned factories in downtown Los Angeles on either side of the desiccated Los Angeles River, including the Arts District and neighboring Boyle Heights (a historically Mexican and Latino neighborhood). The destination also features galleries, coffee shops, socially conscious themed boutiques and a site for culinary experimentation and night time bars. The community is also home to Art Share L.A., a former textile workshop purchased in 1997 and turned into an art space. It is comprised of a two-story, 28,000 square-foot warehouse

which serves as creative center featuring 30 subsidized, live/work lofts on the top floor and community classes, exhibitions and events below. Monthly art walks take place throughout the city, including popular events in Downtown Los Angeles. The inaugural Downtown Art Walk which took place on September 9, 2004 began with a crowd of less than 100 persons. Overtime, however, the area previously known as “Skid Row” has been transformed into one of Los Angeles’s most vibrant areas for art. Crowds of approximately 3,000 persons or more prove the viability of the district which is serving as a catalyst for even more activities and businesses, and economic development. The caché of the district has attracted emerging and influential galleries from as far as New York and London, as well as nonprofit arts group such as the Los Angeles Nomadic Division, formed by a former curator at the Whitney Museum of American Art; not to mention the highly visible opening in the fall of 2015 of an anchor institution, the Broad Museum. Overall, L.A. county reported in 2014, that it was home to 231 art gallery/establishments responsible for providing 800 direct jobs. San Juan, Puerto Rico Two art collectors with residence in Puerto Rico were interviewed to secure their opinions as to how can Puerto Rico insert itself in the international modern and contemporary arts market.

They have been collectors for over thirty years and participate annually in

international art fairs, and buy art in established auction houses and galleries worldwide as well as support emerging artists. In the end, they contribute to the development of visual arts in Puerto Rico by sharing their collection. Their collections include artists from Puerto Rico, Latin American, United States and Europe. These two art collectors' comments and recommendations are presented in the next pages.

Interest in contemporary art has increased in the last two decades creating a movement of arts and culture and their institutions A primary development concern is expressed in the question: How can Puerto Rico insert itself into that market and receive economic and cultural benefits from this phenomenon?" An answer to that question has to consider the people who make up the "market": the artist, curators, art critics, publications, museums, biennials, fairs, collectors, galleries, dealers, auction houses, among others. Also, another consideration is the known magnetism of fairs and other public events. The component that most excites stakeholders in the market is the trade fair. Art Basel researched several cities in the United States until it decided for Miami Beach, Florida. The Miami Art Basel fair fame is undisputed. The next question that emerges is: "Why was Miami selected?" The outright response is obvious, Miami is in a privileged geographical position, has an accessible international airport from Latin America, Europe and parts of the United States and from the rest of the world. Miami, also, has an affluent population, an infrastructure with impressive hotels, collectors and the tradition of other art fairs, (Art Miami). The answers to these two questions lead to affirmation that Puerto Rico needs to branch out into the world of the contemporary art. Initial steps should include Biennials, Fairs and others. Puerto Rico has celebrated for many years the Triennial of Poly/Graphic Art of Latin America.

Except for one year when international curators assisted, in general it has not

generated much local and/or international enthusiasm. The reasons for such outcome are two: first, the resistance of the circle of "traditional art" to open and, accept the new manifestations of art.

Second, the lack of funds to hire

internationally known curators, and to sponsor the exhibition. The curators are a key component in the organizational chart of the arts and culture world. See Appendix I. The two more famous biennials in the Americas are the Biennial of Sao Paulo, Brazil, and the Biennial of Havana, Cuba. The fact that Cuba has been able to organize a Biennial with international recognition, with limited funds and resources, is a worthy case to study. Their success is to be understood as the commitment of its human capital. Someone understood what was the contemporary art and, its potential, and convinced the Government, which gave its promoters the green light to proceed. Puerto Rico has missed a number of opportunities but there are still other ways to expand and grow. Any road that is taken has to be based on professionalism and integrity. An artist has potential or doesnâ&#x20AC;&#x2122;t have it, there is no space for â&#x20AC;&#x153;ay benditoâ&#x20AC;?. Besides the artists presence, FAI entails a need of museums to exhibit their art. Usually the museums have a staff of curators who visit regularly emerging artists to see their work and their progress. In Puerto Rico only a few museums are engaged in this work. Therefore, to develop any program that benefits local and international artists, it would require a group of curators and contemporary artists who will select the beneficiaries. For Puerto Rico to venture in the international modern and contemporary art market, is required that a number of steps be executed: 1.

Create spaces for artists' workshops or studios at a low cost. In the metropolitan area there exist many vacant readily accessible buildings that may be used with a minimum investment.

Economically help artists to participate in seminars, courses, residencies, etc. outside of Puerto Rico.

Strengthen the School of Plastic Arts of Puerto Rico bringing international teachers and artists, thus, opening the curriculum to practices of contemporary art.

Give emphasis in the school of plastic arts to providing courses on curating, art critics, and restoration.

Remove the contemporary art from the jurisdiction of the Institute of Culture.

Create a program of seminars with artists and curators with international recognition.

Establish residences for international artists.

Establish a competition of emerging local artists with an international panel.

Invest in the San Juan Poly/Graphic Triennial to convert it into a renowned event.

10.

Provide tax incentives to the local and international artists.

11.

Provide tax incentives to the galleries.

12.

Provide financial assistance to local galleries invited to international events.

There is an institution in San Juan, Beta Local, (www.betalocal.org), founded by Michelle Marxuach, that would be an excellent guide on how to develop an international program in Puerto Rico for local and international artists. They have developed programs under which they have brought to Puerto Rico international artists to give lectures and classes. Artists, curators, etc., love Puerto Rico. In fact the Director of PS1, affiliated with MoMA, recently bought a house at El Yunque, RĂo Grande, Puerto Rico. The interest exists, what is called upon to is a Government facilitator that understands the potential.

Two well known local contemporary artists with over thirty years' experience were also interviewed (as per their request, we are withholding their names).. As well as other local artists, those two contemporary artists see the need that Puerto Rico inserts itself in the international art market. It will also help to increase the value or their works. However, they feel that their job is to create art and that the marketing is something that should be handled by the galleries, collectors, and investors. These artists feel that the local art galleries have failed to promote their work outside Puerto Rico. They add that only Puerto Rican artists that have moved abroad and get to be represented by international galleries have been able to participate in the international art market. This perception is, recently, changing. Local galleries have taken steps in that direction. It should be noted that Gallery, "Walter Otero Contemporary Art", was listed among the 500 best galleries in the world in the Blouin Modern Painters Magazine, August 2015 issue. Mr. Walter Otero commenced his career as an assistant to Painter Arnaldo Roche.

Now, Mr. Otero

represents Arnaldo Roche internationally; and, Allora y Calzadilla locally. Mr. Walter Otero was interviewed recently by Laura Tíscar García.

The complete

interview is included in the Gallery web-page and on Vision Doble, a virtual publication dedicated to discuss the artistic panorama and what local artists are accomplishing outside the Island. Mr. Otero was asked “how can the art gallery’s functions be expanded to promote the international interest as well as the local development in order for the Puerto Rican artist to be competent on a global level”. Mr. Walter Otero's response was that “everything has to do with relations”. As a representative of Arnaldo Roche Mr. Otero engaged in business relations with Museum Directors, curators and gallery owners. Through communication, exchanges, etc. with those

three group of people, the end result became a sort of chain reaction. The mentality of Walter Otero, is similar to that of Leo Castelli, who has been referred to as: “the acknowledged dean of contemporary art dealers.” Mr. Otero adds that Mr. Castelli stands for what is the prototype of gallery owners who protects the artists and facilitates them with the tools needed. In sum Mr. Walter Otero believes that the phenomenon of Art Basel has been a great stimulus to the fine arts market of Puerto Rico. Another leader gallery is Galería Petrus of Sylvia Villafañe. Galería Petrus is moving internationally and has developed a Mobile APP to exhibit art work and sell through the internet. Meanwhile, a third change is taking place within the Puerto Rico Art Museum participates in online auctions through Paddle 8 to raise funds to support the Museum's artistic educational and social mission. Paddle 8 is the auction house for the 21st century collection, providing online auctions of high caliber inventory.

La Plena, Rafael Tufiño

“CULTURE IS THE THIRD SECTOR WITH MORE DIRECT JOBS IN EUROPE. THERE ARE MORE JOBS DEPENDENT ON THE CREATIVE INDUSTRIES THAN IN THE TELECOMMUNICATION INDUSTRIES" EL PAIS, Edición América

PHASE III Fine Arts in Puerto Rico - Vision Arts culture, fine arts, stimulate local economic development. Arts and culture are critical to development of regional and global economies. Arts and culture are grouped under the umbrella of creative industries and as such are a very dynamic industry: creating jobs, attracting investments, stimulating tourism and fostering economic competitiveness and creativity. The presented design plan for its development aims to fulfill the full potential and economic benefits of the arts and culture industry and its fine arts sector, whereby local government must enact business development programs to foster core creative entities or clusters. The first cluster groups the Individual artists who have extensive social networks and conventions and are more and more interdependent; they are linked one to another through entrepreneurial opportunities, both within and beyond their local work areas. Another envisioned economic benefit is the development of skilled workforce. Young and talented individuals are attracted to vibrant and creative cities. Likewise, a thriving cultural scene attracts visitors who attend events and purchase gifts and goods such as paintings, sculpture and others; in the end attracting tourism dollars. All these economic benefits are to be measured; in particular, the arts and culture creative economies should be evaluated following a cluster analysis and case studies. Initially, should establish and update a database of artists, educators, art retailers, galleries, historic preservation, museums and other related initiatives. Later, engage in the mentioned cluster analysis whereby related producers, suppliers, distributors and consumers buy and sale one with the other, will be evaluated. Notwithstanding, should need to establish a broad base of support for the arts and

culture initiatives. In the end, need to devise economic development strategies to identify new opportunities, stakeholders, business and art leaders, all under one vision. In particular, a management group to spearhead the Fine Arts Initiative in San Juan, Puerto Rico, should be the number one business priority. The group has to command diverse artistic experience in the art world and related disciplines with the unique vision to cement an original Ibero-Hispanic art fair, through technological driven platforms for galleries and artists from around the world. Two envisioned organization charts, of both logistics and operations of Fine Arts Initiative, are presented in Appendix I.

An Executive Board led by a team of

experienced business persons to lead Puerto Rico fair exhibitions and its organization and manage its worldwide entrepreneurial activities is to be constituted through proper recruitment. This management group encompasses, also, marketing and communications, digital platforms, operations, public and private hospitality services, as well as the core relations, gallery, media and human personnel relations. The main objective is to fill the void of a practical framework for a guided and supported self-management. This self-management, coupled with other new elements in the Puerto Rican economy, such as the arrival of capital Laws 20 and 22, presents a unique opportunity for a strengthened ecosystem in creative arts and industries and projects Puerto Rico as a resurgent economy generating multiple sources of income flows.

Law 22 establishes incentives for

foreigners to establish themselves in Puerto Rico. The contemplated integration of these new residents under this law is essential to strengthen the business ecosystem. Puerto Rico and its Fine Arts Initiative (FAI), is a local response to the global leadership of Art Basel to stage in the San Juan Metro Area a number of artistic activities. The Fine Arts Initiative will present art shows and platforms for galleries and artists; exhibitions to promote

young artists from Hispanic Americas jointly with local and regional art galleries, massive sculptures, paintings. Additionally, Puerto Rico Fine Arts Initiative will show work of "little-known artists", large scale installations, as well as experimental film screenings, photographs, and live performances. This Art Fine Arts Initiative will allow curators, critics and collectors to discover "new talents" from across the Americas, providing a platform for single artist or groups of artists, to present major projects. In sum, Fine Arts Initiative will be a driving force in supporting the role that galleries play in nurturing the careers of young artists, including newest developments in visual arts. Also, panel discussions on access to first-hand information, collecting and exhibiting art, where their panelists will include prominent art collectors, museum directors, biennale, curators, artists, art critics. Old San Juan museums and The Institute of Puerto Rican Culture facilities offer artists a unique chance to present all forms of art. These activities will establish San Juan, Puerto Rico as a bridge between Hispanic speaking countries, all the Americas, and the European art world Creative Industries in Puerto Rico Puerto Rico, as of 2014, by means of Law 173 of October 13, 2014 is promoting the development of "Creative Industries". This law has established a list of industries that includes four groups: design, arts, media and creative services. The creative industries represent 5,267 establishments, with 69,459 employees and sales of $10 billion per year, as reported for the year 2012 from the U.S. Census Bureau. These industries represented in that year, 2012, close to 57% of total art sales in Puerto Rico. Two years later, 2014, there were 2,281 establishments and they represent 4.9% of all establishments.

Under Law 173-2014, there are a number of creative industries, and within it , three that form the Fine Arts Initiative; these are as follows: Creative industries

NAICS*

Architectural services

541310

Fine Arts schools

611610

Independent Artists

711510

*North America Industrial Classification System Code The Occupation Employment Statistics, (OES), prepared by the Department of Labor, Bureau of Labor Statistics, include labor information for more than 800 occupations. The table that follows presents the occupations considered to be part of creative industries of the economy. OCCUPATION Computer programmers Applications software developer Software systems developers Network designers Architects, except landscapers Art directors Craftsmen Artists: painters, sculptors, illustrators Multimedia and animation artists Commercial and industrial designers Fashion designers Graphic designers Interior designers Stage designers Editors Technical writers Writers and authors Photographers Movie projector operators Ushers, lobby assistants, tickets collectors Library assistants Technicians and pre-printing workers Press operators Press bookbinding workers Wood craftsmen (furniture maker)

SOC CODE 15-1131 15-1132 15-1133 15-1134 17-1011 27-1011 27-1012 27-1013 27-1014 27-1021 27-1022 27-1024 27-1025 27-1027 27-3041 27-3042 27-3043 27-4021 39-3021 39-3031 43-4121 51-5111 51-5112 51-5113 51-7021

From a business perspective, the creative industries, including artists, are grouped under Standard Occupational Classification (SOC) code 27-1013 and 27-1014. The creative industries sales volume was close to $1,600 million for the year 2012. When new and recent creative industries are taken into account, exceeding over 173, then the total sales volume reaches $10,000 million. This sales volume represents the 5.7% of sales volume of all Puerto Rico establishments. From the 2012 Census, there was an average of 173 activities and facilities, which were dedicated to creative industries, employed approximately 18,987 persons. When taking into consideration the new and recent creative industries, that exceeds 173 activities and facilities, then, total employment figures could go over 69,457 employees. Likewise, past economic literature and research has revealed that there is a positive relation between income level and purchase of art, in particular, as income level exceeds $50,000, a higher percentage of persons buy art and attend painting and sculpture exhibits, among many cultural events.(2) Needleless to add, the visual arts that include painting, photography, sculpture, engravings, installations and video have been favored by the general public. The former painting had the benefit of being the first choice, exceeding by twice the frequency of attendance in relation to second and third choices, photography and sculpture,(3) respectively. More so, the principal places to acquire these products/commodities were: fairs (63%) tourist areas (20.2%) and direct purchasers (18.5%).(4) At the same time, the internationalization or globalization of fine arts initiatives as a cultural strategy is second to none. Artists, promoters, educators, and other persons related to local Puerto Rico cultural environment foresee that the international projection of the art and

culture of Puerto Rico to be utmost importance. Principal objectives should be directed: to strengthen cultural linkages between Puerto Rico and the Puerto Rican Communities in the United States; and to integrate with international cultural organizations and their programs, such as UNESCO, the Organization of Ibero American States, OIS. Another objective should be to implement: benchmark institution standards related to collections, art conservation policies, artists' code of ethics and professional practices, such as ICOM, AAM and others. Further, develop the arts, in particular, the fine arts market in Puerto Rico, through a number of initiatives: promotion of open spaces art, regional and local art markets, as well as provide institutional support to Puerto Rican artists and other related entities. Also, with the impetus provided by the incentives in Law 20-2012, better known as â&#x20AC;&#x153;Law to Promote Service Exportsâ&#x20AC;? -- a law assigning $1 million to the DDEC from the Fund for the Promotion of Jobs and Economic Activity to carry out these tasks -- the time is now for Puerto Rico to assume its rightful place as "The Enchanted Island and Star of the Caribbean". The new laws states that Puerto Rico's government, through the Department of Economic Development and Commerce (DDEC) will be primarily responsible for implementing the public policy on creative industries and provide assistance to sell their products both locally and globally. To accomplish the above mentioned objectives, a necessary step is the use of a Strategic Business Plan. Business Plan For The Fine Arts Initiatives In The Creative Industries Business plans are important for several reasons. They can assist in getting financing for a project, help in the decision-making process of whether to proceed with a business, help an entrepreneur stay on track and meet goals, and allow for business improvements. The Small Business Administration, ("SBA" of the U.S. Federal Government) recognizes that every plan

should include the following aspects:

executive summary, market analysis, company

description, organization and management, marketing and sales management, service or product lines, funding request, and financials. Artists and other creative industries stakeholders should follow the steps and details outlined in the plan. Business plans are not static, but rather should be a continuous work in process, dynamic, and revised at times, as needed. Depending on the scope of a business, it may be necessary to consult a business and legal experts to assist in the planning and writing of a business plan. There are many types of business plan software and templates in the internet. Research which is the best suited to the business you plan to start. The Puerto Rico Commerce and Export Company provide seminars on how to elaborate business plans for any type of business. Their web-page includes guidelines for establishing a new business in Puerto Rico including the preparation of business plans. They also provide certain business consulting services to startups and assist the PYMES in obtaining available incentives. The core industry within the creative industries, the fine arts, encompass three stakeholders; artists, art galleries and museums. Artists The creative process of the artist is constantly expanding the definition of what is a piece of artwork. Art is an expression that is constantly changing. The medium through which the artist works is likewise expanding. An artistâ&#x20AC;&#x2122;s work, during their life and later, may sell numerous times, be seen in galleries more than once or become part o a museumâ&#x20AC;&#x2122;s permanent collection.. The sales value can vary from a small sum to millions such as with the work of Picasso. Van Gogh, etc. An artist may

achieve notoriety during their life or may never achieve it; however, their works are of no less importance. An artist may conduct their craft as their occupation as for profit trade or business or as a not for profit activity. Generally, they operate as individuals, some establish corporations. Whether the artist is a new artist launching its professional career, with little experience, a midcareer artist, or an artist with an enormous resume the Artists’ Biography and Artists Statements are as important as his business plan. Art doesn’t sell itself. Although many people may fall in love with an artwork they also rely on facts and credentials to make their buying decisions. The Artist’s Biography reassures buyers that their inclination to purchase a work of art has been validated. The same is true for art dealers, curators, and other influential art professionals who invest their time and effort to sell art works. Following is a partial list of the many uses of the Artist’s Biography: - Cover Letter to a Gallery

- Artists Exhibition Catalogue

- Grant Proposal

- Promotional Brochure

- Press Release

- Online Gallery

- Profile in Social Media

- Public Speaking Events

- Interview or verbal introductions

- Job Interview

When writing an Artist’s Biography the artist should ask himself the following questions: (5)          

What makes your art unique? Where and when were your born? Where do you currently live? Did you come from a family of artists? When and where did you begin to take interest in art? Did you study abroad? Are you self-taught? What college or art school did you attend? What degrees did you earn? What did you study outside of the art field that has been helpful to your art? Did you study with any well-known artists? What awards and other professional achievements have you earned?

                  

Did you obtain any art grants or artist residencies? Do you create work on commission? Have you created any public art projects? Where have you exhibited your work? Were the exhibitions curated or juried by well-known art professionals? Has your art appeared in any publications-in print or on the internet? What or who inspired you to become an artist? Is your art in any public or corporate collections? How has your travel influenced your art? How has your avocation, special interests or experiences influenced your art? How have your other career paths influenced your art? What organizations do you belong to that are related to your style or subject matter? Have you volunteered your artistic talent in any social, educational or political groups? What unusual experiences have you had that have played a role in your art career? What creative innovations have you achieved? Do you combine styles or have you invented your own style? Are you in any videos, podcasts, blogs or websites? Do you have a YouTube channel? What have writers, collectors, curators of others stated about your work? Do you have other art-related experience, such as being a curator, juror, or art teacher? There are individuals that assist artists in writing artist’s biographies. Renée Phillips

recommended by Puerto Rican Artist Eileen Figueroa is a mentor consultant and coach for artists helping them achieve their fullest potential. She provides career advice, writing services and e-Books. She is director-curator of the Manhattan Arts International. She can be contacted at www.renee-phillips.com. Exhibits I and II include as sample the biographies of Eileen Figueroa and Enoc Perez, respectively. Writing an Artist Business Plan(6) When you create art to sell, you’re running a business. For most entrepreneurs, a business plan justifies their reason for being in business. For you, creativity is your justification for making art to sell. A business plan gives you credibility as a serious businessperson by offering production, marketing and financial goals to consider for your startup. Describe what you do in a brief summary. Specify whether you paint still life, do abstract collages or illustrate children’s books. Describe your typical clients. They might be

private collectors, corporations, publishers, gallery owners or auctioneers. The summary can help you identify clients you might want but don’t yet have. State your purpose in a mission statement, iIn one or two sentences, the mission statement clarifies why you make art to sell and what you want to accomplish. Maybe you create prints out of your original paintings to make art affordable and accessible to more people. Or perhaps you illustrate note cards and donate a percentage of the proceeds to advance a charity’s cause. Describe your business team. Artists usually work alone and are responsible for all aspects of the business. However, if someone helps with billing, accounting, connecting with clients or hanging exhibits, include them as members of your team.

Describe each one's

function, skills and experience. Emphasize your special talent as an artist, such as having exhibited in galleries or having studied under a well-known artist. Use the “business team” description as your wish list for the type of people you need so you can stay focused on producing art. For instance, you might find the services of a part-time financial manager or administrative assistant necessary in six months to a year from now. Add market analyses. Show your knowledge of the art industry through market research. State any changes in the industry that might affect your sales, such as the shift from gallery exhibits to online sales. Keeping up with art industry changes helps you decide whether you need to find new buyers for your work or new ways to market it. Describe how you plan to market your work. List your ideas and when you expect to start them. You might want to run a local drawing for a free portrait sitting three months before the holiday season. Or you might want to give four art lectures at your local library for a stipend. Include all the necessary steps involved and whole help you might need. For a free portrait

sitting, for example, you might need a newspaper to advertise the event and perhaps a highprofile community figure to select the winnerâ&#x20AC;&#x2122;s name. Include a financial plan. List your current revenues sources. Add estimated for future sources.

Factor in the cost of art supplies, which is likely one of your largest expenses.

Also, factor in the cost of production methods, such as printing and framing; overhead if you work out of a rented studio; and marketing. Describe where or how you plan to get the money to increase sales or cover budget shortfalls. Perhaps you plan to approach art investors or apply for government grants. Maybe repurposing your art on new products might generate sales. Tips: Use your art business plan to see where your money and time could be better spent. Also, use your plan to price your artwork. Perhaps you need to put more time in finding new markets or less time connecting with galleries. Keep your plan flexible. You need to adjust it over time as your business grows and changes. Business planning is for all stakeholders, galleries as well. A number of and facts have to be considered when preparing a business plan for galleries Galleries The Second Component in the FAI is the Art Gallery. The Art Gallery industry is very diverse. The term itself, gallery, conjures up a wide range of ideas to different people. To some it merely includes paintings, while others it encompasses sculptures, pottery, rugs, jewelry and more. In Puerto Rico some also include Santos de Palo and local artisans fine craft works. As artwork and the media used is expanding by the creative nature of the artists, what is included in the gallery is likewise expanding. An â&#x20AC;&#x153;art galleryâ&#x20AC;? is one of the medium or outlet through which the works of art are marketed It is the wholesale or retail establishment through which one can acquire ownership of

an item of art either for personal enjoyment or resale. The gallery generally has a physical location even though the internet is reshaping how art is exhibited and sold. Galleries carter to the various types of works available. They may range from pure painting galleries showing only impressionist paintings to galleries that offer a wide range of products. Therefore, it is very difficult to categorize galleries by art form. Galleries also vary in size. Galleries have the ability to make the â&#x20AC;&#x153;unknownâ&#x20AC;? artist popular in the industry. Galleries that represent the most popular and skilled artists have been able to reap the economic rewards without tying up large amounts of capital investment in inventory by selling on consignment. Galleries generally operate in the form of corporations. Gallery owners are the key to the business. Some are experienced artists themselves, while others are collectors turned salespeople, or merely entrepreneurs seeking profits. However, the more knowledgeable the gallery owner is about the artwork, the clientele, and the market, the better the business will function. Galleries with similar art, prices, and location will succeed or fail, and the determining factor appears to be the owner of the business and his or her working knowledge of the industry. Appendix XII, includes a sample business plan for an art gallery for the purpose of raising capital. (7) Likewise, business plan for the remaining stockholders, museums and related entities, entail further and necessary considerations. Plans For Other Components of the Art Ecosystem. Art supply stores, art warehouses and other components of the art ecosystem can develop business plans similar to the one for the art gallery. As previously stated there are software and templates available for every type of business.

Fine art storage is one of the services sometimes provided by auction houses and museums. There are also commercial warehouses that include fine art storage facilities. The fine art warehouse industry is not regulated and insurance companies have begun to step in and set guidelines to educate art owners on the important criteria when looking for fine art storage. Those considering establishing this type of business should consider in their business plan the following key elements:       

Does the company have a professional art handling training program for employees? Does the company perform background checks on all employees? Is there a barcode inventory system in place to help locate items at any given time? Is there a central control system with camera monitors? Is there an alarm system installed? If so, what type? Does the facility have a fire detection system that provides instant notification to the fire department? Is the facility climate and humidity controlled? Is there a plan in place to protect against infestation? A critical stakeholder of the fine arts industry is the Museums.

Museums Museums look after the world’s cultural property and presents it to the public. Museum organization have special status in international legislation and there are national laws to protect them. Museums generally operate as non-, or not-for, profit foundations, trusts or corporations. Museums preserve the world’s natural and cultural heritage, and also constitute a significant component in defining cultural identity. Those interested in establishing a museum should consider the five aspects of a business plan stated above. In elaborating the business plan consideration should be given to “Running a Museum: A Practical Handbook” published by the International Council of Museums (ICOM) and the United Nations Educational, Scientific, and Cultural Organization (UNESCO). The 231-page handbook can be downloaded free in different languages at either ICOM or UNESCO web-page.

Leighton, Flaming June

“WE TOOK A LOOK AT PUERTO RICO AND WERE IMMEDIATELY CONVINCED. IT IS DIFFICULT TO BEAT. WE'RE ON U.S. SOIL WITH THE REGULATORY ENVIRONMENT WE'RE ACCUSTOMED TO, THE CLIMATE IS FABULOUS, THE TALENT IS INCREDIBLE, AND THE TAXES ARE VERY ADVANTAGEOUS. SO FAR, WE'VE DONE EXTREMELY WELL HERE, AND WE'RE CONSIDERING BRINGING IN OTHER UNITS”

(Mohnish Pabrai, CEO of Pabrai Investment Funds)

PHASE IV Integration of Laws 20/22 to the Fine Arts Initiative Act 22 of January 17, 2012, as amended was enacted to promote the economic development of the island by attracting foreign capital. The purpose of the Act is to stimulate residence in Puerto Rico of individuals who have not been residents of Puerto Rico by at least six years. Act 22 encourages new residents by providing tax exemption on all passive income realized or accrued after the individuals became bona fide residents of Puerto Rico. Passive income includes among others dividends, interest, and capital gains. Art in the hands of collectors are considered capital assets and any gain realize on the sale of art works would be considered capital gains. For investors and dealers gains from sale of art works are considered ordinary income. Most individuals moving to Puerto Rico under the benefits of Act 22 are collectors. Gains realized from the sale of their collectibles during their residence in Puerto Rico could be completely tax exempt.

When discussing passive income most of the investors think of

dividends and interest and donâ&#x20AC;&#x2122;t realize that art is a capital asset subject to capital gains. This should be emphasized in the Investment Summit conferences presented by the Department of Economic Development and Commerce. The new residents are individuals that have keen interest in the cultural activities taking place in Puerto Rico including local fine arts. To integrate the new residents in the ecosystem of creative industries in Puerto Rico the members of creative industries should be invited to exhibit, present, and participate in the Investment Summits. They should be allowed to hand-out their promotional and advertising materials as is permitted to financial institutions, law firms and others that participate in such events.

The Business in Puerto Rico web-page under the heading Learn/ Lifestyle section includes links to seepuertorico.com for cultural, nightlife, gastronomy, and nature related activities taking place in the island. Under the culture page there is information about libraries, museums, and theaters. Some of the recommendations that will facilitate the integration of the new residents with the creative industries ecosystem in the Island are: -

Relocate the Lifestyle section as a heading in the Business in Puerto Rico webpage.

Broaden culture to include musical, festival, fairs and art exposition activities taken place. Also include productions filmed in Puerto Rico

Periodically include a brief biography and sample work of local established and emerging artists. “Desde Cero “ magazine a bi-annual publication since 2013 has interest articles on the Puerto Rico art history that could be included in the site.

In the interviews and grant process due diligence with encourage potential new residents to become familiar with the Puerto Rico web sites.

Engage in direct communication informing new residents of the cultural events taking place through electronic media.

Many new residents have arms length relations with important galleries in New York, Miami, London, and other major cities and should be encourage to pass on information of the tax benefits and fine arts in Puerto Rico.

The new residents are individuals that make significant charitable donations for income and state tax purposes throughout their lifetime. They would hear presentations in the Investment Summits discussion related to charitable donations to Puerto Rico institutions and how they would benefit.

New residents should be invited regularly to the cultural activities in the Island through a simple postcard type of brochure with the DECC’s logo. This brochure should include the web-page for all cultural activities taking place . It could have as background, photos of art works from the local artists and a statement such as “Puerto Rico is Art,” “Our Culture” “See Our Culture,” “We Invite You to See Our Culture,” or even, “Be Part of Our Culture.”

Likewise, the new residents that move to Puerto Rico buy new homes, decorate them, and enjoy the benefits of the new of low or no taxes. There’s no reason why they should not support our local artists. Opportunities for the Ecosystem under Act 20.

Act 20 of 2012 was enacted on

January 17, 2012 to promote the “Export of Services” providing the adequate environment and opportunities to develop Puerto Rico as an international service center, encourage local professionals to stay and return, and attract foreign capital, thus promoting the economic development in Puerto Rico. Puerto Rican businesses providing services for exportation enjoy a 4% flat income tax rate on income related to such services. Distributions from profits derived from the export services income of eligible activities are 100% tax exempt for Puerto Rico residents. Several amendments have been to Act 20 since it was enacted. The first significant amendment benefiting Puerto Rico’s creative industries was Act 173 of 2014. Act 173 amended Act 20 to include as eligible activities creative industries. Section 3 (k) (v) of Act 20 states as follows: “Creative Industries defined by the Act as those business with the potential for creating jobs and wealth, mainly through the export of creative goods and services in the following sectors: design(graphic, industrial, fashion, and interior design); arts (music, visual arts, performing arts, and publishing); media (application, videogames, online media, digital, and multimedia content development); creative services (architecture and creative education).” Artists exporting their works, curators, art critic’s ,restorers exporting their services, and galleries exporting art works qualify under this definition. The second significant amendment was Act 232 of 2014 which broaden the definition of eligible activities under the Act 20 by adding among other eligible activities trading companies. Section 3 (k) (xxi) of Act 20 states as follows:

“ Companies devoted to international trading companies. International trading companies trading companies shall mean entities that derive not less than eighty percent (80%) of their gross income : (A) from the purchase of products manufactured in or outside Puerto Rico and the resale of such products for their use, consumption or disposition outside Puerto Rico; and (B) from commissions derived from the sale of products for their use, consumption and disposition outside Puerto Rico;…………………” Under the above definition art works produced in or outside Puerto Rico and resold for use outside Puerto Rico qualify for the exemption. This should attract art dealers, investors, and galleries to establish businesses in Puerto Rico to sell fine art internationally. Foreign and local galleries individually, jointly or partner with artists under series limited liability companies can apply for the tax incentives under the Act. In the case of local galleries to comply with the eighty percent (80%) gross income requirement it is advisable to organize a new entity exclusively for the sales for use outside Puerto Rico. Act 27- 2011: “Puerto Rico Film Industry Economic IncentiveAct". This Act was enacted to bring Puerto Rico’s production cost structure in line with other leading jurisdictions through innovative completive tax incentives. These include production incentives, infrastructure incentives and preferential tax treatment. Eligible projects include short films, documentaries and video games Contemporary art includes video art, short films and documentaries. Marketing of the Act has been concentrated with production companies and investors but not within the art world locally and internationally. Marketing efforts should address this potential population. Additional Legislation Required To Boost Puerto Rico in The International Contemporary Art Market.

Some important legislation is crucial to be able to insert Puerto

Rico in the contemporary art market.

Property Taxes. The most detrimental tax obstructing economic development is the tax on personal property held by businesses in the municipalities. The last three governors have made unsuccessful promises to eliminate this tax. Opposition from the mayors have not allowed for any legislation with such purpose. Art works in the hands of the collectors is considered tax exempt personal property under Article 5.01 (a) of Act 83 of 1991, as amended. On the other hand art works in the inventory of a gallery (inventory owned by the gallery and not on consignment by the artist) is subject to the personal property tax. The tax ranges from 6.33% to 8.83% on the average annual inventory. This tax does not make it attractive maintaining inventories of fine art works in Puerto Rico for resale. Act 173 of 2014 provides temporary relieve of this tax for creative industries certified under the Act. This relieve however, is only temporary for the five (5) first years of operations. Our recommendations regarding the adverse effect on this tax on the future development of the creative industries are as follows; -

Repeal the personal property tax sections of Act 83 of 1991, as amended; or

If the personal property tax cannot be repealed amend Article 5.01 of the Act to include fine art works as an exemptions; or

Provide the personal property tax exemptions under Act 20 and or

Amend Act 173 of 2014 to increase the exemptions for a least the first 20 years Sales and Use Taxes. Over the past decade Hong Kong has developed a pivotal role in

the global art market, and now hosts premier international art fairs and galleries. Hong Kong is now one of the three most important art auctions in the world along with New York and London. According to Mark Saunderson show director of the Asia Contemporary Art Show â&#x20AC;&#x153;several practical fundamentals have made it a success â&#x20AC;&#x201C;itâ&#x20AC;&#x2122;s a free port so there are no duties on art, and

Hong Kong doesn’t have a sales tax, which most markets do. There is transparency integrity and ease of movement” “Art Collectors Find Safe Harbor in Delaware’s Tax Laws” The New York Times Oct.25, 2015 Art storage in Delaware has increased significantly in the last few years. Art storage warehouses with storage capacity of 40 to 50 thousand square foot and controlled temperatures are opening operations in Newark, Delaware. The reason is that it is one of only five states without any sales or use tax. Collectors from the other forty five states, art funds and investors are storing art in Delaware. Insertion in the international market would require the exchanges between local and international galleries. Present sales and use tax law and regulation provide exemptions for art works introduced to the island for trade shows and returned afterwards. However, it is not easy and friendly process. It requires the inspection at the introduction and shipment by the same individual. This individual might not be a person sensitive and aware of the value of fine art. Can you imagine the introduction of art works for an art fair were more than one hundred galleries participate The message is clear.

If Puerto Rico wants to become part of the international

contemporary art market, it has to offer the same advantages as Hong Kong and Delaware. Therefore, the elimination of the sales and use tax on fine art works is required. Eligible Activities Under Act 20. Storage and warehousing of fine art works could be considered eligible activities under the definition of creative industries However, to make more attractive it should be specifically stated as an eligible activity. Act 20 should be amended for such purpose.

Art Basel. The Swiss foundation Art Basel announced last March 2016 that it is starting a worldwide initiative to partner and promote art in different cities around the world. The program aims to go beyond the art fair platform to work directly with

cities and government

bodies. In addition to hosting a unique art program in the partner city, the initiative will bring projects from the city to the Art Basel shows. Art Basel announced in September 2016 the first partnership with the city of Buenos Aires to host a number of cultural events to promote Buenos Aires rich and diverse history. This is the first initiative of its kind for the region, with Art Basel hoping to launch similar working relationships with different cities in the future. The events will take place in the second half of 2017. The Tourism Department should start initiatives with the Municipality of San Juan to partner with Art Basel for hosting such event in the future in Puerto Rico. This is recommend after all the necessary legislation is enacted. The benefits of Acts 20 and 22 available to participants in the art world should be brought to the attention of the organizers of Art Basel. Art Basel always offers special events for collectors, dealers, investors and art galleries. The Department of Economic Development & Commerce can sponsor with Rones of Puerto or any other sponsor an event or various events in the international art fairs. Such events can include presentation of local artists, and the advertisement of the tax benefits of Acts 20 and 22 as well as the other investment opportunities available in Puerto Rico. A local art collector and investor from Espacio 1414, LLC has very good relations with the directors and organizers of Art Basel and will be willing to make the initial arrangements start conversations as soon as the government is ready to start the initiative. Bringing such type of event to San Juan, Puerto Rico would be the ideal kick off for launching Puerto Rico as an international location for the fine arts.

Local galleries require the governmentsâ&#x20AC;&#x2122; financial support to participate in international fairs. At the same time, the local promoting entities, such as the Institute of Puerto Rican Culture, should redirect its efforts in this direction. All individuals collectors, gallery owners and artists interviewed expressed that programs related to plastics arts should be transferred from the Institute of Puerto Rican Culture to a newly created organization and/or the collections be donated to local museums.

Francisco Rodรณn

“...THE CREATIVE INDUSTRIES HOLD GREAT POTENTIAL FOR DEVELOPING COUNTRIES THAT SEEK TO DIVERSIFY THEIR ECONOMIES AND LEAPFROG INTO ONE OF THE MOST DYNAMIC SECTORS OF THE WORLD ECONOMY”

(United Nations Conference on Trade and Development, Creative Economy Report 2010, p.6)

PHASE V - Findings The development of the fine arts industry in Puerto Rico entails that the Puerto Rican arts are promoted globally. The first step should be the internationalization of the Puerto Rican art, through networks and fairs, being either international or regional events and parallel support to local galleries. .The second step should be the development and expansion of fine arts market in Puerto Rico, through promotion of local and regional markets of fine arts; support of alternative exhibition art spaces and institutional support for the Puerto Rican artists. The third step should be to strengthen the artists professional formation, and support the creation of graduate programs in visual arts, history of art, tutorship for curators and arts management administration. Moving Forward Arts & Culture and creativity are driving forces for the development of regions and cities, as they enhance local attractiveness and help revitalize local economies, including through the clustering of cultural and creative industries at local and regional level. Arts and cultural events produce revenue streams for many organizations and entities more than just for themselves. When people attend a cultural event, they are also likely to go to eat at the surrounding restaurants and if they are tourists, sleep in a nearby hotel. The restaurant and hotel owners then have more income, which they can spend at other local businesses, and the cycle continues in economic jargon, the multiplier, direct and indirect, effects are numerous Expanding the market of cultural products outside of Puerto Rico is important not only to increase income, but also to brand the island as a hub of cultural activity. Once people become accustomed to thinking of Puerto Rico as a haven for prime cultural activities and artistic resources, they are more likely to visit. Tourism is incredibly important to the cultural economy because a large proportion of patrons are tourists.

A number of recommendations to consider and debate for Puerto Rico’s renewed arts and culture eco-system are exposed. From the experience of the key American cities, previously discussed, can interrelate a number of such possibilities. Create a Spanish/English and/or multi-lingual Puerto Rico Art Now App and Website and provide an easy-to-use virtual destination comprised of current locations, studios, anchor destinations with an updated calendar of events. An enterprise such as this also helps build the brand awareness and supports the marketing of Puerto Rico’s arts offerings. It can help set the stage for visitation from foreign government trade delegations interested in arts and culture offerings. To those effects, conduct an analysis of the current ecosystem and create a database of resources that include existing assets: -

Museo de Arte de Puerto Rico, San Juan

Museo de Las Américas, San Juan

Museo de Arte Contemporáneo de Puerto Rico, San Juan

Casa Cortes’ art gallery on upper floors, Old San Juan

Museo La Casa del Libro, San Juan

Age Art Gallery, San Juan

Museo de Arte e Historia de San Juan, Calle Norzagaray, San Juan

Museo de las Américas, Cuartel Ballajá, San Juan

Museo del Mar, Calle San Francisco, Old San Juan

Museum of our African Roots (Museo de Nuestra Raíz Africana, San Juan

Espacio 1414, (Berezdivin Collection), Santurce

Walter Otero Contemporary Art, Hato Rey

Petrus Gallery, Miramar, San Juan

Galería Agustina Ferreyra, Miramar, San Juan

Galería Bertita Martínez, Ocean Park, San Juan

Botello Gallery, San Juan

Museo de Arte - Casa Amarilla Dra. Concha Meléndez, Caguas, Puerto Rico

Museo Casa José Celso Barbosa, Bayamón, Puerto Rico

Museo Pablo Casals, San Juan

Museo de Historia, Antropología y Arte, University of Puerto Rico, Río Piedras Campus

MUSA, Art Museum, University of Puerto Rico, Mayagüez Campus

Museo y Centro de Estudios Humanísticos, Dra. Josefina Camacho de la Nuez, Universidad del Turabo, Gurabo, Puerto Rico

Museo de Arte de Ponce, Ponce, Puerto Rico

Plus, existing public art sculptures In the short run, need to create upscale and personalized visits of corporate art

collections, private collections and studio spaces of prominent artists for high net-worth visitors to Puerto Rico (such as persons to come to the island for business conventions or for pleasure at locations such as the Hotel Vanderbilt, etc). Likewise, business leaders and executives such as Maria Luisita Ferré, Lourdes Ramos, Michy Marxuach and prominent artists such as Antonio Martorell and Arnaldo Roche Rabell can form a steering committee for further advice, discussion and exploration; as well as principals from the leading 5-star hotels and museum executives, etc. Another proposition should be to reestablish Puerto Rico’s renowned Bienal del Grabado Latinoamericano en San Juan de Puerto Rico, founded by the late preeminent scholar of Puerto Rico art and culture, Don Ricardo Alegría. To attain that goal, a number of steps would include:

Create curate exhibition salons at an anchor destination and satellite shows

Curate/re-create exhibitions based on historical shows or past jury awardees

Explore an exposition partnership with prints for sale with The International Fine Print Dealers Association

Organize educational printmaking visits to “talleres” and printmaking master classes

Organize public learning “tertulias” about the history of printmaking and its importance to the island art making practice as well as its intellectual and artistic legacy

A further activity would be to create a biennial "ExpoFeria de Fotografía” modeled on expositions such as: -

Photo L.A.

Paris Photo

FotoSeptiembre USA (San Antonio, TX)

Parallel, two other activities would be to: (1) create an annual "Feria de la Artesanía", that connect master and local artisans and craft makers around the island, leveraging natural destinations for tourism and further cultural exploration such as with the Paradores de Puerto Rico; or, with other focused cultural events throughout Puerto Rico; and, (2) create an affordable art fair for younger and emerging artists or partner with exciting new initiatives such as Trailer Park Projects. Founded in 2011, Trailer Park Projects -http://www.trailerparkproyects.com/ showcases exhibitions of young artists with works for sale with a maximum price of $500. Educates and includes new and younger collectors; cultivates an educated but culturally aware our mid-level target audience. Also, should coordinate Rutas del Arte and/or Noches de Galerías with built-in FREE trolley service. (Note: Trolley’s can become cultural experiences within themselves, with music

and artist designed exterior covers.) A viable model to study could be the Bronx Trolley http://www.bronxarts.org/culture_trolley.asp. The initiative was originally known as the “Bronx Culture Trolley”. Since its founding in 2002, it has offered locals and tourists a free ride to the cultural destinations in the South Bronx. Trolley is a replica of an early 20th century trolley with passengers hopping on/off as desired. Notwithstanding, other proposition that Puerto Rico should engage in is to revisit public art in public spaces such as transient, semi-permanent, long-term or opportunistic showcasing.. Public art can include performances, installations, sculptures, etc.

A historical

example to reference comes from a former Puerto Rico elected official, Former Governor Ms. Sila M. Calderón’s,

"Proyecto

Arte

Público

http://www.artepublicopr.com/html_espanol/noticias/agosto_1_03.htm.

Puerto

Rico"

On the other hand, a

contemporary example, "Sculpture Expo", emanates from a waterfront neighborhood in Brooklyn, New York, known as Redhook. It produces a public art exhibition of large-scale outdoor sculpture; a community arts project including tours, talks, workshops, and related events over a period of six months. All events are community based and open to the general public. Also, Puerto Rico needs to create an independent nonprofit arts service organization to foster artistic and professional advancement. This entails the following: an entity with the knowledge and capacity to provide technical support and instruction to artists’ aids with marketing, as the internet can be a primary resource for artists trying to sell their products. It can also offer free or low-cost classes to artists that teach them how to make their own websites and make contacts on social media sites can spur a city’s sale of artistic products. Organizations can provide re-granting (funding) opportunities for artists; can provide nonprofit tax exemption for artist projects; as well as other professional and artistic development opportunities.

Suffice to add that funding is the biggest challenge for most artists and small to mid-size cultural organizations.

There is ample desire and support for the arts, but because arts

organizations lack funds to development and economic entities that can help them raise funds. An art service organization with development knowledge can help artists raise funds from the philanthropic, business or private sector to help them carry-out their creative endeavors. Existing models for further study can include the following: Harlem Arts Alliance

which is a network based arts service organization

comprised of established and emerging visual and performing artists, art lovers, businesses and organizations that serve the arts and culture community in Harlem and the Greater New York City area. Harlem Arts Alliance produces its signature Artz, Rootz and Rhythm Series and annual Festival. These highly acclaimed events present more than 300 of our established and emerging visual and performing members, at more than 50 indoor and outdoor venues throughout Harlem. Their professional development series is designed to strengthen and grow the skills and capacity of the individual artists and arts organizations in their network of over 1,000 members. By popular demand, monthly meetings provide the optimum setting for artist networking, member presentations and community building. The National Association of Latino Arts and Cultures (NALAC) is the nation's

leading

nonprofit

organization

exclusively

dedicated

the

promotion, advancement, development, and cultivation of the Latino arts field. In this capacity, NALAC stimulates and facilitates intergenerational dialogues among disciplines, languages, and traditional and contemporary

expressions.

NALAC offers, leadership programs, grant opportunities , and arts

training and workshops Another challenge to emerging artists is the need to create affordable live/work space for artists Most artists have to pay for their work space out of their own pocket if they choose to work outside their home. Many artists also use part this work space as a gallery or an exhibit. Subsidizing work and living spaces for artists not only attracts arts to the area, but also allows them to focus on their career as an artist instead of working additional jobs to earn a living. Subsidies therefore allow artists more time to produce art, which leads to more artwork being produced. Some areas have specifically designed subsidized work/living spaces for artists that are all located within one building. Such spaces help artists network with each other and draw more people to come see their work. A leading nonprofit developer in the U.S. is Artspace.org which is dedicated to building better communities through the arts.

Artspace's mission is to create, foster, and preserve

affordable space for artists and arts organizations. Established in 1979 to serve as an advocate for artistsâ&#x20AC;&#x2122; space needs, Artspace effectively fulfilled that mission for nearly a decade. By the late 1980s, however, it was clear that the problem required a more proactive approach, and Artspace made the leap from advocate to developer. Since then, the scope of Artspace's activities has grown dramatically. Artspace is now a national leader in the field of developing affordable space that meets the needs of artists through the adaptive reuse of historic buildings and new construction. In sum, need to address the following opportunities for Puerto Rico: A renewed branding initiative; Marketing and partnerships that promote cultural tourism; Capacity building through programs that teach business skills to entrepreneurs, professional education, consulting and

coaching for business startups; Building physical infrastructure (e.g. affordable housing/spaces for artists to work; improving mobility for people and freight); Art Service organizations can help foster creative business incubation; provide training programs that meet the specific needs of artists and offer access to grants and financial resources

Next Steps In the coming 6-12 months, the Fine Arts Initiative for Puerto Rico requires that the following suggested next steps should be programmed and carried-out: -

Engage in facility and cultural asset audit to prepare budget and its itemized assignments.

Develop formal Request for Proposals for Apps and Website Design/Branding to be executed in initiation of plan.

Identify journalists (content providers or media partners) for App and Website and request their collaboration.

Identify and convene community leaders & cultural stakeholders to address planning strategies.

Identify and convene cultural stakeholders and economists and business leaders to articulate and design benchmarks and success metrics for fine arts. In sum, DDEC should move forward to address required legislation to insert Puerto Rico

in the international contemporary art market. Also, need to incorporate legislation related to property tax and sales tax to attract investors to this market.