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The art of development: how theaters can catalyze growth

A typical scene on H Street NE on a weekend

Sam Sweet, executive director of the Atlas Theatre, remembers when "people were told not to come here."

"Nobody came here. People were told not to come here," says Sam Sweet, executive director of the Atlas Performing Arts Center in the H Street Corridor in Northeast.
He's talking about H Street Northeast. Of course, that was a decade ago, before the revival of the Atlas Theater -- a once-successful movie theater that barely survived the 1968 riots that devastated H Street -- and with it the Atlas District.

The neighborhood couldn't be more different now. It's one of the hottest in the District, with new restaurants opening too quickly to keep track of them all, and home prices in the area soaring.
It's not just that Atlas has seen the neighborhood revive. The theater itself was a major factor in that revival.
"Theaters, like other art pieces, tend to be real catalysts for reinvigorating and drawing investment to neighborhoods," says David Schon, a partner in Nixon Peabody's tax credit finance and syndication practice. "There's really no better example — that I'm aware of — of the catalytic effect that a theater can have on the neighborhood than the Atlas."
Part of the reason is simple economics. Theaters don't just provide employment, they also lure a revolving crowd of outsiders to the area for performances and exhibits. These visitors may choose to have a drink or grab dinner nearby. After all, they don't call it "dinner and a show" for nothing.

There's also the less tangible but no less important sense of community spirit that theaters and performing arts centers bring. For example, the Atlas chooses its programming to reflect and respond to the needs and interests of its neighbors. "We think of ourselves as the artistic heart of this community," says Sweet.

The Atlas' recent Intersections festival featured local performers, including the Northeast Senior Singers, a musical group from an independent living place down the block. And, as the neighborhood's development has brought families to H Street, the Atlas has upped its family programming to bring in newer residents.

"All of these people are enjoying the arts and talking about them and mingling in the lobby here, which is at that time functioning like a big town square," says Sweet.
Promoting Growth

Federal and local governments are interested in incentivizing this kind of development, and their weapons of choice are tax credits. Nixon Peabody's Schon helped the Atlas gain financing through federal tax credits. One that they used, the New Markets Tax Credit, is specifically designed to promote commercial development in areas that need it.

"When you grow business in low-income areas, you grow jobs in low-income areas, and that brings people out of low-income status," explains Scott Sergio, who works with Schon in the tax credit finance and syndication practice at Nixon Peabody.
Of course, a theater is not an instant magic bullet for neighborhood revitalization. In the Atlas' zip code, which comprises the southern part of Northeast, sixteen percent of residents still qualify for food stamps, according to 2010 census data. That's compared to three percent of the population in tony Logan Circle.
"You had Washingtonians and people from the neighborhood who just really wanted to see the Howard come back, the light come back on again."
Sergio helped the newly reopened Howard Theatre in Shaw use the New Markets Tax Credit.  Without government incentives such as these, major projects like the Atlas and Howard would have trouble finding financing from private investors who may balk at putting their money into an untested area. "It really is a gap-filler for community development projects all over the country," Sergio says.

Both theaters were also able to take advantage of tax credit financing for the redevelopment of historic buildings.
Though others had tried to bring back the historic and beloved theater, which was also damaged in the 1968 riots, as—among other things—a go-go venue, but finding a concept that could turn a profit proved difficult.
"The Howard Theatre was in a completely dilapidated state, the roof was about to cave in," says Chip Ellis of the Ellis Development Group, which reopened the theater in 2012. The theatre has already hosted such acts as The Roots, Mos Def and Jerry Lee Lewis.
"You had Washingtonians and people from the neighborhood who just really wanted to see the Howard come back, the light come back on again," Ellis says.

14th Street comes to life

As Howard Theatre advocates wait to see what effect it will have on the neighborhood, the Studio Theater is reaping the rewards of successful development in Northwest.
The 14th Street Corridor is now a bustling commercial corridor, with galleries, homes stores, and a slew of apartments scheduled to open next year. But when the Studio Theater opened there in 1978, 14th Street Northwest was known for drugs and crime, says Keith Alan Baker.
Baker, now the managing director of the Studio Theater, started working there back in 1986.
"People -- if they dared to park -- they had to run from their car to the theater," he says. "Even 17th street, back then, was like a frontier."

The board of directors pushed for a move to the suburbs, but Studio stuck it out, along with the Source and Woolly Mammoth theaters, the latter of which has since moved to Penn Quarter.
They don't call it "dinner and a show" for nothing.?

One of the major turning points in the development of the 14th Street Corridor was the arrival of a Whole Foods on 14th and P Streets Northwest -- within sight of the theater. Studio's presence there was a major factor in Whole Foods' choice of location, Baker says. Both the theater and the neighbors lobbied hard for its arrival.

And with Whole Foods came the restaurants. Baler said when he started working at the Studio nearly three decades ago, his lunch options included Mid-City Fish Market and a little sandwich shop.

These days, Baker is spoiled for choice. Popular new restaurants including Estadio, Drafting Table, and The Pig have all sprung up within a block of Studio in the past few years.

The Mid-City Fish Market is gone, but the little sandwich shop remains.  Albeit with a few changes. "Her prices used to be like a dollar for a sandwich," says Baker. "Now, they're like $4.95."

Read more articles by Beth Marlowe.

Beth Marlowe has written for The Washington Post, the Associated Press, Bloomberg Television and other publications.  She's currently an editor at Washington Post Express. In her free time she enjoys house-hunting, food-trying and friend-having.
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