Darryl Smith, co-owner of the Luggage Store, stood on the corner of Sixth and Market. Above him, a row of ferns and moss grew out of his gallery’s exterior wall, filling the narrow space between the second and third floors.
“Before we put that up, there wasn’t anything there,” he said, by way of explanation. “It was just a blank space. It was too small for a mural, so we decided on that.” He took a moment to look at it, then added, “I think it’s beautiful, but it’s probably not something we could get away with now.”
Smith, along with his partner, Laurie Lazer, have operated the Luggage Store art gallery from the top floor of the Walker Building, at 1007 Market St., since 1991. From this vantage point, they have been witness to some remarkable change. Most recently, the gritty blocks of their Mid-Market corridor have been transformed by a wave of tech money, as well as the markers of the new economy that have quickly followed in its wake. Among the panhandlers and soft-drug peddlers that regularly surround the gallery, companies like Zendesk and Spotify have moved less than a block away. Further down the road, Twitter and the glossy towers of the NEMA luxury condos (now 96 percent occupied) loom large.
Unfortunately, this change also means that Smith and Lazer have seen many organizations like them (nonprofits, art institutions, etc.) leave. Office rent prices are now averaging north of $50 a square foot, with some predicting that price could soon reach closer to $75. All this makes it more interesting that, on the day Smith was admiring his building’s unique flora, workers inside were finishing up the last of the past six month’s worth of renovations. Electricity and plumbing have been updated, a building-wide sprinkler system has been added, and the gallery has been expanded into the second floor. The Luggage Store is not only surviving, it’s growing. Amazingly, it might soon even own the building itself.
This improbable success story is the result of a novel collaboration between the Luggage Store and the California Arts Stabilization Trust, or CAST. Using funding from the Kenneth Rainin Foundation, a nonprofit whose mission is to “champion and sustain the arts,” CAST purchased the Walker Building in January for $1 million, then undertook the renovations necessary to bring the building up to code. Over the next seven to 10 years, in partnership with the Northern California Committee Loan Fund (NCCLF), CAST will provide operational support while the Luggage Store raises the money to pay them back. Until then, CAST will act as a holding company, effectively securing the gallery from rising rents.
The beauty of this model, Smith explained, is that the Luggage Store is only required to return the initial investment. “By July,” he said, “before we started any work on the building, it was already valued at two million. Now, as we complete this scope of work, who knows, it could be well over three at the end. We will only be charged with paying back that million dollars.”
What’s more, a deed restriction has been placed on the building so that, in the event it does have to sell, it can only go to another arts nonprofit. “They’ve secured it for perpetuity,” Smith said. “It’s kind of a legacy piece. I think that’s rad.”
Sculptures by Marissa Neuman.
“CAST began as a result of the beginning of the economic surge in the Central Market neighborhood,” explained Moy Eng, the Executive Director of CAST. “A number of public and private-sector leaders were watching the elements unfold, and they saw an opportunity to address both short-term and long-term questions of stability and permanent space for arts and cultural organizations.”
By the time CAST was put together, in 2013, the Luggage Store had already been exploring multiple avenues of ownership for over a decade. In 2000, after their first landlord had died, they received a reasonable offer — $500,000 — from his sister to buy the building. Working with a real estate attorney, they formed a limited liability corporation and raised nearly half of the funds needed, but fell short when they realized how many renovations the building required to be brought up to code.
Luckily, Shelley Trott, an artist and former performer who had been very active in the street theatre festivals the Luggage Store had put on in the late ‘90s and early aughts, had since gone on to become the Director of Arts, Strategy & Ventures at the Kenneth Rainin Foundation. She, along with Joshua Simon and Leiasa Beckham of the NCCLF, came up with the the strategy to acquire and steward real estate for nonprofit arts institutions. With a $5 million initial investment from the Kenneth Rainin Foundation, CAST was formed. In addition to the Luggage Store, CAST has also purchased the Dollhouse, a former adult theater on 80 Turk St., for CounterPulse.
Already, CAST is looking ahead to even larger projects. With the city’s recent approval of the 5M Project, Eng said, CAST will assume responsibility of the Dempster building, at 447 Minna, and turn it into a permanent space for SoMa artists.
“We’ll be working with a number of neighborhood groups and artists in order to collaborate smartly and respectfully with art, cultural, and community groups already in the neighborhood in order to steward this building into being a vibrant hub,” said Eng. “This is our modest way of seeing if we can claim some affordable places and stem the erosion of artists and arts organizations from leaving San Francisco.”
Work by Alex Bradley Cohen, along with construction equipment.
Will CAST and its strategy serve as the model for other nonprofit arts institutions faced with eviction? Smith looked up at the plants growing out of his gallery, which date from before CAST’s intervention, and pondered the question.
“It’s one model, but it’s not the only one,” he said. “I feel very grateful to be a part of this deal, because it’s taking our building to another level of what we can offer artists, unknown and emerging and mid-career artists. That’s our whole scope of who and what we pay attention to.”
However, he went on, he also acknowledged the difficulties of the approach, especially for an organization such as the Luggage Store. Traditionally, he has seen his gallery as a renegade institution, one that “did things and asked forgiveness later.” Now, for the time being, they must focus their energies elsewhere in order to become a more viable, sustainable organization. They need more staff, for instance, as well as a managing director. They need a development plan in place in order to raise the funds needed over the next several years. Future shows, he said, will try to strike a balance between selling art and using the additional space they have to continue taking risks.
Smith worries that this focus on money might distract them from their core values, but he is also realistic about what has to be done. “That’s mainly our challenge as an arts nonprofit, he said. “We have to find our own independent ingenuity and make revenue in alternative ways. We’re there for artists who are working alternative to established traditions and methodologies. Now I think we have to do it, too, in our way.”
The Luggage Store is located at 1007 Market St. Current shows include “Candy Paint II” by Michelle Guintu, Rye Purvis, Yarrow Slaps, Justin Hager and Kristen LiuWong, and “In” by Alex Bradley Cohen and Marissa Neuman.