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Artscape Wychwood Barns in Toronto is a century-old streetcar facility redesigned as a community space for arts and cultural events.Ted Chai

Toronto’s Artscape said this week that it would be placed into receivership after three decades of providing studio, living and residency spaces for artists.

Artscape, a group of largely not-for-profit organizations helmed by Toronto Artscape Inc., said in a statement that it would no longer manage its 14 facilities across the city as part of the process, but that “we are working hard with the City in an effort to have facilities remain operational.” It has nearly 400 tenants throughout Toronto.

The organization took advantage of Toronto’s low commercial real-estate costs in the 1990s to build out studio spaces for artists. As the cost of living crept up, it became increasingly necessary for Toronto artists to work with support organizations such as Artscape in the increasingly expensive city. Thousands of artists have used Artscape’s facilities over the years as it expanded from a studio provider to offer a suite of services across Toronto.

Many Canadian authors credit residencies at Artscape Gibraltar Point, at the Toronto Islands, in their book acknowledgments; others across various disciplines have in recent years depended on Artscape’s affordable rental and ownership units. When the Weeknd-affiliated creative accelerator Hxouse first launched in 2018, it spent its first couple of years sharing some space in a waterfront building with the Artscape Daniels Launchpad facility.

According to a statement from Artscape this week, it financed much of its expansion with debt, which only further accumulated during the pandemic as event-hosting revenue crashed and it needed to stay afloat. Burdened by repayments, the company said it began a restructuring plan earlier in 2023.

Key to that plan was selling the jewel of its property assets: the 30,000-square-foot Artscape Daniels Launchpad facility on Queens Quay Boulevard, which cost $34-million to develop before its November, 2018, opening. It was listed for sale this year for $22.5-million.

Numerous artists who have used space with Artscape in the past decade, some of whom worked for the organization, told The Globe and Mail on Tuesday that the time and effort it spent on building the waterfront Launchpad property came at the detriment of its other properties and initiatives.

“As soon as they introduced this Launchpad project, it was clear that this was a bad idea,” said Chris Foster, who also worked for Artscape as a building superintendent about a decade ago.

In recent years, Foster has used studio space at Gibraltar Point for screen-printing, sculpture and installation work. When Launchpad became a priority, he said, “A lot of the staff had concerns about it, and a lot of the buildings were being underinvested in. They were concerned about sort of how this was going to affect the organization moving forward. Those concerns were not met with any interest from leadership.”

Vanessa Rieger, a multidisciplinary artist who develops immersive audiovisual experiences, oversaw maintenance at the Gibraltar Point facility around the same point. “It just felt like pulling teeth with head office to get the okay to fix and repair things,” she said.

She also established a work-exchange program there to allow artists with trades expertise to stay there in exchange for a few days of work each week maintaining the aging school building it’s based in – but said that her own job disappeared after she introduced the program for other artists.

Artscape said it planned to use proceeds of the Launchpad sale to repay debt to an unnamed lender. (A July report from Toronto’s controller and its general manager of economic development and culture, however, describes a $5-million line of credit from Toronto-Dominion Bank.)

“Despite these financial challenges, our commitment to meeting the needs of artists and arts organizations that have relied upon Artscape for space, programming and other services remains strong and, through the receivership process, we will work with partners towards a model with strong oversight and financial stability that remains committed to this mission,” Artscape said in a statement.

A report from municipal staff shows that TD asked the City of Toronto to guarantee a $1.5-million extension to Artscape’s $5-million line of credit. City council approved this extension in July, with the guarantee set to expire either by Oct. 31 or when the Artscape Daniels Launchpad sale completed – which would have allowed Artscape to repay debts.

But in a letter to tenants dated Monday, Artscape chief operating officer Kelly Rintoul wrote that the organization “was advised on Friday that we would not be able to secure the much-needed funds. The impact is Artscape no longer has access to cash and has become insolvent.”

Asked to clarify what happened after the city’s approval, Artscape’s vice-president of community experience, Subagini Sivapatham, said in an e-mail that “an agreement was not reached on the terms for the line of credit extension and the loan guarantee.”

If the line of credit had worked out, Sivapatham added, “it would have resolved the debt owing to TD which would have helped greatly, but would not have ensured long-term stability. Artscape has other debt and as well is recovering to pre-pandemic revenue levels.”

In a second letter early Tuesday morning, Rintoul said a small group of Artscape staff would remain employed for the week to maintain operations as the receivership came into place. “Pending funding approvals, we are also hopeful their term will be extended to ensure a reasonable runway to transition operations at our various sites,” she wrote.

Carrie Perreault, a sculptor who does performance and installation work and is based in a live-work studio at Artscape Weston Common in the city’s northwest, said she has been studying Artscape’s finances in recent years and has been concerned with its financial decisions.

As such, she said she expected an announcement about Artscape’s end much sooner, but that the news has left her and dozens of other tenants mired in uncertainty: “We know nothing, and that is very anxiety-inducing.”

Sivapatham said in an e-mail that Artscape’s tenants should be “unaffected,” and that “we are working with the City to ensure any disruption of property and community services are minimized.”

Artscape also previously operated space in Toronto’s Distillery District, but announced in December, 2021, that it would exit the space at the end of its 20-year lease in 2022, citing “the pressures of the real-estate market.” Organizations including Tapestry Opera and Nightwood Theatre were left without a home, though those groups in particular are expected to set up in a new facility in Yorkville as early as 2024.

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