(c) Karoliina Eerola

How real estate can do good for the arts

In Helsinki, a former Nokia factory has become a place for culture and creativity. Instead of going through with the planned demolition, the city gave in to the creative tenants who lobbied to keep renting spaces in it after the factory’s closure.

Stories of industrial buildings being repurposed as creative and artistic hubs are not uncommon in cities – there are examples in Ljubljana, Brno and Valladolid, to mention a few. Yet, what makes Helsinki’s case unique is that the city uses KAAPELI – a wholly-owned council real estate company, to manage the buildings and borrow against them as assets.

A fair income

Helsinki is undergoing accelerated urban development, with many former industrial areas proving to be commercially attractive, while others remain too costly to repurpose. But in the municipality’s view, abandoned buildings can be used as cultural resources to support creative and artistic development – as KAAPELI has proved.

The KAAPELI model demonstrates how to transform a significant heritage asset while managing financial risk. The building of the Nokia cable factory was given to KAAPELI as a capital contribution to boost its balance sheet and solvency. This initially enabled KAAPELI to take a bank loan and start renovating and developing the space. Additional income was generated through renting out the first spaces to artists and was reinjected into the building as it was used to renovate it.

Today, rents are set depending on the use, financial capability of the user and the amount of space rented. Such a flexible rent system allows lower rents for non-commercial art activities to be subsidised by higher, market-oriented rents from commercial uses. Additional income is generated by the provision of tenant and visitor services. Any income is used to work on the building, to pay for maintenance costs and KAAPELI’s employees.

KAAPELI does not receive public funding for operational expenses; it even pays an annual fee for the use of the land which belongs to the city. In turn, KAAPELI does not have to pay dividends to the city. Through KAAPELI, the City of Helsinki has secured 100,000 m² of affordable space for creative uses without spending from its yearly budget.

Concert in the former cable factory
Design Market - (c) Patrik Rastenberger

Creative freedom

The model provides tenants – mainly artistic, creative, sporting, and commercial organisations – with only the basic facilities to design premises to suit their purpose. The company does not programme or curate the activity on-site, allowing cultural tenants the freedom to operate independently and personalise the space to their specific needs.

“We need to let spaces be and not over curate or design them,” said a representative of the City of London at the Cultural Heritage in Action study visit last summer, where a dozen cities’ representatives visited Helsinki’s cable factory in person. “If we provide the spaces, artists and community organisers will come.”

Today, the former cable factory consists of 63,000 m² of space, comprising 130 ateliers, two bars, 12 galleries, three museums, two restaurants, multiple event venues and a new dance house with two halls. In 2019, more than 500,000 people attended events there.

With the development of the KAAPELI company, Helsinki could repurpose more facilities with limited risk to the Council. The model has grown incrementally, and the company has become a skilled and trusted partner. For example, KAAPELI has recently taken over a former gas plant and a former pharmaceutical factory.

Strategic approach

The case of KAAPELI informed Helsinki’s broader strategic approach, which includes a clear policy for temporarily using empty buildings. The success made the city adopt a new Art and Culture 2030 Vision and Real Estate Strategy for historical premises.

More cities, like Aarhus, are looking up to Helsinki to push their strategies further. “As a result of the visit to Helsinki, we have decided to evaluate our handling of the buildings for cultural purposes to develop a strategy for how we take active ownership of our buildings. We want to expand this and create good conditions for our art and cultural life,” declared Aarhus’ representative during the Cultural Heritage in Action visit.

Watch our discussion on the sustainable reuse of old premises for culture, with more examples from Helsinki, Bologna, the Puglia region and Bucharest:

Wilma Dragonetti Eurocities Writer