Over the past decade, the cultural portfolio of Miami Beach has expanded exponentially. The Grant Program currently supports approximately 50 cultural organizations each year, including the 16 cultural institutions based on Miami Beach. As published by Americans for the Arts in Arts & Economic Prosperity 5 (2015), the nonprofit arts and cultural industry in Miami Beach generated $7,725,000 in revenue to local government and supported 4,489 jobs. Event-related spending by arts and cultural audiences totaled $75.1M (excluding the cost of admission) and drew a total attendance of 1,868,555 resident and nonresident cultural audiences.

The Miami Beach Cultural Arts Council (CAC) was established by the Mayor and City Commission on March 5, 1997. The 11- member Commission appointed advisory board, is charged with developing, coordinating, and promoting the arts and culture in the City of Miami Beach community. An essential component of the mission of the Miami Beach Cultural Arts Council is investing in cultural arts programming through the Cultural Arts Grant Program (“Grant Program”). Since the Grant Program inception, the Mayor, Commission and Cultural Arts Council ("CAC") have awarded approximately $18 million in cultural arts grants, supporting thousands of performances, exhibits, and other cultural activities in Miami Beach. The Grant Program is managed by Tourism and Culture Department.

In 2001, the City set aside 1% of the Resort Tax for a cultural arts reserve fund and those funds support cultural affairs grants and programs and the Quality of Life Fund for North Beach, Mid-Beach and South Beach programming. Currently the 1% Resort Tax set aside is distributed as follows: 10% to CAC, 30% to Quality of Life and 60% to Transportation/Trolley operation.  An eight-year funding history of the Cultural Arts Council, is noted as follows:

The funding to cultural arts grants and programs is divided into two (2) restricted funds, that are managed by appointed members of the Cultural Arts Council, which reviews and makes recommendations for Commission approval.  The two (2) funds, essential to the operations, quality and growth of Miami Beach cultural arts programming are as follows:

Cultural Arts Council Fund Balance

In 2014, the Cultural Arts Council recommended, to the City Commission, to create a Cultural Arts Council Fund Balance (“Fund Balance”) in the amount of $2,467,000, that is capped (providing for an annual increase for inflation). This recommendation was approved on September 10, 2014 by Resolution No. 2015-29045. The original City Commission (Resolution No. 2014-28732) referencing the fund balance, contained a scriber error in the fund amount referenced and was replaced by Resolution No. 2015-29045. The purpose of the Fund Balance is to set aside rainy day funds that will ensure the Cultural Affairs program operation and grants continue for a period of two (2) years, in the event of an emergency, unforeseen difficulty, trouble or need.  All funds remaining, at the end of each fiscal year, are rolled over to the following fiscal year.

Cultural Arts Council Endowment

The Cultural Arts Council Endowment ("Endowment") was established by the CAC in an optimistic attempt to become self-sufficient by using fund. The Endowment is capped at $1,581,873, and is to be saved, spent, invested and distributed for the purpose of enhancing Miami Beach's art institutions, collections and operations.  Currently, $800,000 of the Endowment is allocated to the renovation of the Rotunda in Collins Park. The Rotunda construction is not time sensitive and could be postponed, by City Commission, and revisited. CAC, at its February 6, 2020 meeting, expressed it would be prudent to retain a rainy-day balance, of no less than $500,000, for emergencies and unforeseeable situations, circumstances and opportunities. 

COVID-19

Due to the COVID-19 pandemic, Miami Beach arts organizations are facing unprecedented revenue losses. As of June 2020. Miami Beach based cultural organizations collectively reported over $6M+ in lost revenue, reflective of the first few months after closures. Depending on social distancing guidelines and community perceptions, it may be more than a year or more before Miami Beach institutions are able to operate at full capacity, if they survive at all. Venues such as the Colony Theatre, managed by Miami New Drama, received 40% of their annual revenue from ticket sales. The management of Miami New Drama has estimated approximately $615,000 in lost revenue since closing in March 2020. The Miami Beach Botanical Gardens depends heavily on facility rentals and has lost upwards of $300,00 in event rentals.  

In April 2020, the combined fund balances for the Cultural Arts Council totaled $4,280,368. As part of the FY 2020 budget balancing plan presented to the Finance & Economic Resiliency Committee on April 17, 2020, the Administration recommended funding the FY 2020 budget allocation of $1,540,000 from the CAC fund balance instead of the 1% Resort Tax for Quality of Life to free that allocation up for other purposes such as supporting the trolley system or other resort tax purposes.

The Administration then recommended, with the support of the CAC, the creation of a $1 million Miami Beach COVID-19 relief fund for cultural organizations to mitigate and alleviate the financial and programmatic hardships created by the current COVID-19 pandemic. On May 1, 2020, via Resolution No. 2020-31247, the Mayor and City Commission established a Cultural Arts Emergency Fund in the amount of $1,000,000 to provide financial assistance to Miami Beach-based cultural organizations experiencing revenue losses due to the COVID-19 crisis.  The $1,000,000 COVID-19 Emergency Relief grant, as well as the current FY 19-20 Grant Program funding of $1,540,000 is being funded through the Cultural Arts Council Fund Balance, reduced the fund balance from $4,048,873 to $1,740,368 (see table below).

The nonprofit arts and cultural industry is a vital economic driver for Miami Beach, a growth industry that supports jobs, generates government revenue, and is the cornerstone of tourism. Most recently, the COVID-19 pandemic has had a catastrophic effect on this industry with reported revenue losses for Miami Beach nonprofit arts and cultural organizations at approximately $7M since closures in mid-March 2020.  These worsening results document that COVID-19 threatens the very survival of cultural facilities and events and the livelihoods of arts workers, ranging from security guards to artists and stagehands to accountants.

Without more resources, both the costs of re-opening at vastly reduced capacity and the additional expenses needed for required safeguards are daunting.  The reactivation of theaters, museums, cultural centers and events is an indispensable part of restarting our overall economy. Investing in Miami Beach’s cultural life will send a compelling message to tourists and businesses alike that Miami Beach is an attractive, diverse and dynamic place to come back and visit, to grow a company, and raise a family.

On Thursday, July 9, 2020, CAC reviewed and discussed the impact of their recommended FY 2021 annual grants and Emergency Grants to be distributed to the cultural community and concluded that the crisis COVID-19 continues to create would have a longer impact than expected. (Attachment 1) As a result, CAC recommended that there is a need for additional support to cultural organizations to adapt and continue to prepare and share their work with the public, until we can safely gather in person again.

CAC recommended additional funding that could help the Miami Beach cultural contributors adapt their programs, spaces, and operating models as a result of long-term COVID-19 recovery. This includes costs for finding new safe spaces for performance and rehearsal, adapting existing facilities to comply with public health standards, developing new capacities in streaming and virtual engagement, addressing issues of equitable access on digital programs, retraining staff, and other costs associated with physically distanced program delivery. 

Upon review of the CAC Fund Balance and Endowment, the Administration supports the CAC recommendation  and further recommends an additional $1 million allocation to the Cultural Relief Fund in addition to the $92,000 necessary to fully fund the CAC’s FY 2021 operating budget due to projected revenue loss from COVID-19 as shown in the table below. This additional $1 million allocation and $92,000 to fully fund the CAC budget would reduce the fund balance from $1,740,368 to $648,368 (see table below).

Given the fluidity of the current economic environment, the Administration also recommends issuing the additional funding in the Fall 2020. The Administration could process, together with CAC, how this additional funds can further support, sustain and protect the Miami Beach cultural community with insight on the impact of the $1m Emergency Grants.

On July 17, 2020, The Finance and Economic Resiliency Committee recommended the use of additional funding from the Cultural Arts Council Fund Balance, in an amount of up to $1,000,000 to provide financial assistance to Miami Beach-based cultural organizations experiencing revenue losses due to the COVID-19 crisis, with funding criteria to be assessed by the Cultural Arts Council throughout FY 20-21 in $500,000 increments. Staff, in consultation with the Cultural Arts Council, will present a plan for distribution of the first installment of $500,000 in October 2020 and assess the need for the additional $500,000 in April 2021.

Funded from the Cultural Arts Council Fund Balance

Cultural anchors and presenters are challenged now, but six (6) months, the impact will be even greater. Sadly, some cultural presenters, who typically manage smaller operating budgets, will cease to exist without financial support. Continued investment in our cultural institutions is vital and long-term funding solutions to support our cultural community is more crucial than ever.

Providing financial support to arts and cultural organizations right now just makes economic sense. We know the creative sector contributes to Miami Beach's economic productivity, a robust tourism sector, more livable neighborhoods, the development of young leaders, and community cohesion. Additional funding, from resource developed for such a crisis will  protect the creative sector now to ensure it can support the long term economic and communal recovery of the city.