Are music venues as valuable as houses – and can we prove it?

An economic powerhouse? The George Tavern in London's East End. Image: Dan Kitwood/Getty.

It is well documented that London has lost over a third of its grassroots music venues since 2007. One of the reasons given for this phenomenon is that, in our current economic climate and planning framework, venues are market failures.

What that means is that the value of a venue in London simply isn't comparable to that of the flats that could be built on its site. A venue worth £300,000 could be converted into 6 or 8 flats, each worth as much as the venue itself.

For a landowner in these circumstances, it is difficult to provide an economic argument to retain the venue (or art gallery, or rehearsal space, or comedy club, or...). And with our planning system prioritising housing over everything else, those flats are easy to develop, sell and profit from.


And yet, our councils, government and property developers all know that the cultural value of a grassroots music venue – or independent theatre, or cinema, or art gallery for that matter – can make an area desirable. One of the key reasons Hackney is one of London's fastest growing boroughs is its night time offer.

We can take this argument further. What if a venue was as valuable to the landowner as the aforementioned flats? What if, when a venue was supported, those businesses and residences around it would benefit economically? Land value would increase; more traders would open.

To argue this case, over a few cups of coffee a colleague of mine and I dissected his venue in Dalston.  Here’s our take.

Running the numbers

This venue sees 234 people go through its doors each day, each spending an average of £10 per head on entry fees, alcohol and food. It’s open seven days a week, and has a capacity of 250.

Let’s argue that, of these people, 60 per cent live locally. Half of those walked or cycled, while the other half took public transport to get to and from this venue, at a cost of £2.30 each way. The other 40 per cent commuted from other parts of the city. Of these, we estimate that 80 per cent took the tube and 20 per cent took taxis at a cost of £15 per ride.

Let's assume that one-third of these 234 people ate out, either before or after visiting this venue, each spending another £15 per head. On top of this, this venue contributes £64,000 each year in PAYE, alcohol duty, license costs and business rates to the exchequer. In addition, it pays £5,000 per month rent to the landowner, or £60,000 per year.

Using our iPhone calculators, we tallied up that his venue contributes £694,000 to the local economy each year, outside of its independent takings as a business. Include those, and the amount rises to £1.3m.

Furthermore, this venue employs 12 people at the London living wage. In total, this venue is worth, theoretically speaking, as much as £2m a year to the local and national economy.

And this is one venue. On Kingsland High Street in Dalston, there are half a dozen of these. Across Hackney, there are dozens.

Let’s compare this with the value of one flat in a local development in Dalston. A two-bed is retailing at £450,000, a price the developer will earn once. Council taxes and other fees on such a property, on average, add a further £2,500 to £4,000 to the local economy, not to mention another £4,000 to £6,000 in ancillary costs like utilities and other services.


The space this venue inhabits could accommodate perhaps four new properties, which would net a developer around £2m on the sales. That, though, is a one off return, not something that will be pumped into the economy year after year.

Our calculations are inevitably rough – but they merit further investigation. What they show is that the term "value" has different definitions, depending on the party doing the valuing. To a developer, building and then exiting a project is of more value that renting out equal space to a leaser to open a venue, regardless of art form.

But what if this venue, or all six on the High Street, closed? We would lose secondary and tertiary value: the service providers supporting the venue, its rate and PAYE bill, the value of the music (or art, or theatre) being incubated and of course, the space’s cultural value. What's more, the saleability of the flats would be impacted, because there would be fewer things to do in Dalston.

And with business rates returning to councils now, it is in local authorities’ best interests to understand and capitalise on the economies businesses create, both inside and outside their doors.

So when we look at that value of our grassroots music venues, our nightclubs – our music incubators, as they should be referred to – let’s value them both culturally and economically. If we measure their value properly, they are worth their weight in pounds and pence.

Dr Shain Shapiro is the managing director of Sound Diplomacy, a consultancy specialising in music cities and market development. 

 
 
 
 

A nation that doesn’t officially exist: on Somaliland’s campaign to build a national library in Hargeisa

The Somaliland National Library, Hargeisa. Image: Ahmed Elmi.

For seven years now, there’s been a fundraising campaign underway to build a new national library in a nation that doesn’t officially exist. 

Since 2010, the Somali diaspora have been sending money, to pay for construction of the new building in the capital, Hargeisa. In a video promoting the project, the British journalist Rageeh Omar, who was born in Mogadishu to a Hargeisa family, said it would be... 

“...one of the most important institutions and reference points for all Somalilanders. I hope it sets a benchmark in terms of when a country decides to do something for itself, for the greater good, for learning and for progress – that anything can be achieved.”

Now the first storey of the Somaliland National Library is largely complete. The next step is to fill it with books. The diaspora has been sending those, too.

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Some background is necessary here to explain the “country that doesn’t exist” part. During the Scramble for Africa of the 1880s, at the height of European imperialism, several different empires established protectorates in the Somali territories on the Horn of Africa. In 1883, the French took the port of Djibouti; the following year, the British grabbed the north coast, which looks out onto the Gulf of Aden. Five years after that, the Italians took the east coast, which faces the Indian Ocean.

And, excepting some uproar during World War II, so things remained for the next 70 years or so.

The Somali territories in 1890. Image: Ingoman/Wikimedia Commons.

When the winds of change arrived in 1960, the British and Italian portions agreed to unite as the Somali Republic: a hair-pin shaped territory, hugging the coast and surrounding Ethiopia on two sides. But British Somaliland gained its independence first: for just five days, at the end of June 1960, it was effectively an independent country. This will become important later.

(In case you are wondering what happened to the French bit, it voted to remain with France in a distinctly dodgy referendum. It later became independent as Djibouti in 1977.)

The new country, informally known as Somalia, had a difficult history: nine years of democracy ended in a coup, and were followed by the 22 year military dictatorship under the presidency of General Siad Barre. In 1991, under pressure from rebel groups including the Hargeisa-based Somali National Movement (SNM), Barre fled, and his government finally collapsed. So, in effect, did the country.

For one thing, it split in two, along the old colonial boundaries: the local authorities in the British portion, backed by the SNM, made a unilateral declaration of independence. In the formerly Italian south, though, things collapsed in a rather more literal sense: the territory centred on Mogadishu was devastated by the Somali civil war, which has killed around 500,000, displaced more than twice that, and is still officially going on.

Somalia (blue) and Somaliland (yellow) in 2016. Image: Nicolay Sidorov/Wikimedia Commons.

The north, meanwhile, got off relatively lightly: today it’s the democratic and moderately prosperous Republic of Somaliland. It claims to be the successor to the independent state of Somaliland, which existed for those five days in June 1960.

This hasn’t persuaded anybody, though, and today it’s the only de facto sovereign state that has never been recognised by a single UN member. Reading about it, one gets the distinct sense that this is because it’s basically doing okay, so its lack of diplomatic recognition has never risen up anyone’s priority list.

Neither has its library.

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Rageeh Omar described the site of the new library in his fundraising video. It occupies 6,000m2 in the middle of Hargeisa, two minutes from the city’s main hospital, 10 from the presidential palace. In one sequence he stands on the half-completed building’s roof and points out the neighbours: the city’s main high street, with the country’s largest shopping mall; the Ministry of Telecoms that lies right next door.

This spiel, in a video produced by the project’s promoters, suggests something about the new library: that part of its job is to be another in this list of landmarks, more evidence that Hargeisa, a city of 1.5m, should be recognised as the proper capital of a real country.

But it isn’t just that: the description of the library’s function, in the government’s Strategic Plan 2013-2023, makes clear it’s also meant to be a real educational facility. NGOS, the report notes, have focused their resources on primary schools first, secondary schools second and other educational facilities not at all. (This makes sense, given that they want most bang for their buck.)

And so, the new building will provide “the normal functions of public library, but also... additional services that are intentionally aimed at solving the unique education problems of a post conflict society”. It’ll provide books for a network of library trucks, providing “book services” to the regions outside Hargeisa, and a “book dispersal and exchange system”, to provide books for schools and other educational facilities. There’ll even be a “Camel Library Caravan that will specifically aim at accessing the nomadic pastoralists in remote areas”.

All this, it’s hoped, will raise literacy levels, in English as well as the local languages of Arabic and Somali, and so boost the economy too.

As described. Image courtesy of Nimko Ali.

Ahmed Elmi, the London-based Somali who’s founder and director of the library campaign, says that the Somaliland government has invested $192,000 in the library. A further $97,000 came from individual and business donors in both Hargeisa and in the disaspora. “We had higher ambitions,” Elmi tells me, “but we had to humble our approach, since the last three years the country has been suffering from a large drought.”

Now the scheme is moving to its second phase: books, computers and printers, plus landscaping the gardens. This will cost another $175,000. “We are also open to donations of books, furniture and technology,” Emli says. “Or even someone with technical expertise who can help up set-up the librarian system instead of a contemporary donation of a cash sum.” The Czech government, in fact, has helped with the latter: it’s not offered financial support, but has offered to spend four weeks training two librarians.  

Inside the library.

On internet forums frequented by the Somali diaspora, a number of people have left comments about the best way to do this. One said he’d “donated all my old science and maths schoolbooks last year”. And then there’s this:

“At least 16 thousand landers get back to home every year, if everyone bring one book our children will have plenty of books to read. But we should make sure to not bring useless books such celebrity biography books or romantic novels. the kids should have plenty of science,maths and vocational books.”

Which is good advice for all of us, really.


Perhaps the pithiest description of the project comes from its Facebook page: “Africa always suffers food shortage, diseases, civil wars, corruption etc. – but the Somaliland people need a modern library to build a better place for the generations to come.”

The building doesn’t look like much: a squat concrete block, one storey-high. But there’s something about the idea of a country coming together like this to build something that’s rather moving. Books are better than sovereignty anyway.

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and also has a Facebook page now for some reason. 

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