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. 

 
 
 
 

Which pairs of capital cities are the closest together?

Vienna, which is quite close to Bratislava, but not quite close enough. Image: Thomas Ledl

It doesn't take long to get from Paris to Brussels. An hour and a half on a comfortable Thalys train will get you there. 

Which raises an intriguing question, if you like that sort of thing: wich capital cities of neighbouring countries are the closest together? And which are the furthest away? 

There are some that one might think would be quite close, which are actually much further part. 

Buenos Aires, Argentina's capital, sits on one side of the estuary of the Río de la Plata, while Montevideo, Uruguay's capital lies on the other side. 

Click to expand: Image: Google Maps

But at 207km apart, they're not really that close at all. 

Similarly, Singapore – capital of, er, Singapore – always sticks in the mind as 'that bit on the end of the Malaysian sticky-out bit'. But it's actually pretty far away from Kuala Lumpur, Malaysia's capital. A whole 319km away, in fact:

Click to expand: Image: Google Maps

Thinking of 'countries that cause problems by being close together', you inevitably think of South Korea and North Korea. 

Click to expand: Image: Google Maps

And while Pyongyang in the North and Seoul in the South are pretty close together, 181km just isn't going to cut it. 

Time to do some Seoul-searching to find the real answer here.

(Sorry.)

(Okay, not that sorry.)

Another place where countries being close together tends to cause problems is the Middle East. Damascus, the capital of Syria, really isn't that far from Beirut, in Lebanon. Just 76km:

Click to expand: Image: Google Maps

Seeing as Lebanon is currently host to millions of refugees fleeing the horrors of Syria's never-ending civil war and the atrocities of Daesh, or Isis, this is presumably something that authorities in Beirut have given a certain amount of thought to.

Most of the time, finding nearby capitals is a game of searching out which bits of the world have lots of small countries, and then rooting around. So you'd think Central America would be ripe for close-together capital fun. 

And yet the best option is Guatemala and El Salvador – where the imaginatively named Guatemala City is a whole 179km away from the also imaginatively named San Salvador.  

Click to expand: Image: Google Maps

Another obvious place with lots of small-ish countries is Europe – the site of the pair of capitals that drove me to write this nonsense in the first place. 

Click to expand: Image: Google Maps

And in fairness, Vienna and Bratislava do make a pretty good showing of it. Austria's capital sits on the Danube; drift downstream, and you swiftly get to Slovakia's capital. As the crow flies, it's 56km – though as the man swims, it's a little longer. 

There are more surprising entries – particularly if you're willing to bend the rules a little bit. Bahrain and Qatar aren't really adjacent in the traditional sense, as they have no land border, but let's just go with it. 

Click to expand: Image: Google Maps

Manama, Bahrain's capital, is 140km away from Doha, the centre of the world's thriving local connecting-flight-industry which moonlights as Qatar's capital. 

Sticking with the maritime theme, Port of Spain in Trinidad and Tobago is 152km from St George's, Grenada. 

Click to expand: Image: Google Maps

Good, but not good enough. 

Castries, the capital of the Carribbean country of St Lucia, is 102km north of Kingstown, the capital of St Vincent and the Grenadines. 

Click to expand: Image: Google Maps

Better, but still not good enough. 

Basseterre, the capital of St Kitts and Nevis, inches ahead at 100km away from St John's, the capital of Antigua and Barbuda.

Click to expand: Image: Google Maps

But, enough teasing: it's time to get down to the big beasts.

If you ask Google Maps to tell you the distance between the capital of Congo and the Democratic Republic of the Congo, it comes up with a rather suspect 20km. 

 

Click to expand: Image: Google Maps

A short distance, but considering the only thing separating the two is the River Congo, something's up: Google places the centre of Brazzaville a little north of where it should be, and the centre of Kinshasa many many miles south of where it should be, in some sort of suburb.


So, in true CityMetric style, we turn to train stations. 

Though such transport hubs may not always perfectly mark the centre of a city – just ask London Oxford Airport or London Paddington – in this case it seems about right. 

Kinshasa's main train station is helpfully called 'Gare Centrale', and is almost slap-bang in the middle of the area Google marks as 'Centre Ville'. On the other side of the river, 'Gare de Brazzaville' is in the middle of lots of densely-packed buildings, and is right next to a Basilica, which is always a good sign. 

 

Click to expand: Image: Google Maps

And when marking that distance, you get a more realistic 4.8km. If you want to be really keen, the ferry between them travels 3.99km, and the closest point I could find between actual buildings was 1.74km, though admittedly that's in a more suburban area. 

Pretty close, though. 

But! I can hear the inevitable cries clamouring for an end to this. So, time to give the people what they want. 

Click to expand: Image: Google Maps

If you ask Google Maps to tell you how far away the Holy See, capital of the Vatican, is from Rome, capital of Rome, it says 3.5km. 

Click to expand: Image: Google Maps

If you set the centre of Rome to be the Palatine Hill, the ancient marking point for roads leading out of Rome, that narrows to 2.6km.

 

Click to expand: Image: Google Maps

Fiddle a bit and put the centre of the Vatican as, well, the middle bit of the roughly-circular Vatican, that opens up a smidge to 2.75km.

Click to expand: Image: Google Maps

Mark the centre of point of the Vatican as the approximate location of St Peter's Tomb within St Peter's Basilica, which is after all the main reason the Vatican is a thing and not just a quirky suburb of Rome, and 2.67km is your answer. 

Though obviously in practice Rome and the Vatican are as far away as one single step over the railings at the entrance of St Peter's Square, which fairly blatantly makes them the closest capital cities in the world. 

But that would have been a very boring thing to come out and say at the start. 

Oh, and if you hadn't worked it out already, the longest distance between a capital city and the capital of a country it shares a land border with is 6,395km. 

Click to expand: Image: Google Maps

I know it's tough for you, Vladimir and Kim. Long-distance relationships are a real struggle sometimes.

I can't make a pun work on either Moscow or Pyongyang here, but readers' submissions more than welcome. 

Jack May is a regular contributor to CityMetric and tweets as @JackO_May.

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