The business of art: South Florida's art scene is growing in international stature and many businesses, as well as artists, are profiting

South Florida CEO, Nov, 2004 by Mamie Ward, Barbara Perkins

Artwork no longer simply adorns the walls and public spaces of South Florida's legion of condominiums. Increasingly, art is being used to lure new business, and in the process is becoming a lucrative business on its own.

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Gaining respect from art enthusiasts and critics around the world, the art market in South Florida has evolved into a moneymaker for some local business owners. Area real estate developers--many prominent art collectors themselves--are leading the charge and dropping big bucks to partner with artists to promote upscale living spaces and impress potential buyers.

"If you don't think about art then you are missing a part of the equation," says Craig Robins, chief executive of Miami Beach-based Dacra Development, developer of Aqua and other condo projects in Miami Beach and in Miami's Design District. "My approach is that I like to work with urban design and make interesting neighborhoods. By aspiring to show the best of the creative disciplines, you get the best results."

His current undertaking, Aqua, on 63rd Street and Collins Avenue in Miami Beach, is perhaps one of the most ambitious examples of integrating art and business. The $225 million low-rise project will house three site-specific art projects: painter Richard Tuttle will design a mural for the community, Argentine painter Guillermo Kuitca will design the central square plaza, and sculptures will inhabit the lobby of the project's Spear building. Robins also donated artwork from his personal collection to be exhibited in Aqua's common areas.

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Robins takes from his personal collection of contemporary art and lends works to all of Dacra's projects. He started collecting in Barcelona in 1982, and today owns pieces from established contemporary artists such as John Baldessari, Janine Antoni and Antoni Miralda as well as Latin American artists such as Jac Leirner, Jose Bedia, and Glexis Novoa.

He is not alone in using art to beautify real estate projects and draw buyers in. Developer Martin Z. Margulies, who is also a well-known South Florida art collector, may have started the trend during the 1970s when he constructed a sculpture garden for his 20-acre Grove Isle condo project in Coconut Grove.

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"I didn't have the intent to put art there," Margulies says. "I started collecting and thought it was nice to add there. It gave the island a certain tone; most people didn't know art back then."

The relationship between art and commerce benefits the artists, too, most obviously by giving them another revenue source. Margulies says buyers these days have more sophisticated tastes, and he now largely confines his art collecting to personal rather than business pursuits. In 1994 he removed Grove Isle's sculptures and donated them to Florida International University. "I fell in love with the art and I don't want to use it any more for commercial purposes," he says.

That sentiment has not taken root with many others, some of whom have seen a way to profit from both ends of the spectrum.

Collecting Art, Making Money

Gallery owner and hotelier Diana Lowenstein spent 16 years collecting art before she merged it in with her business. Art, she says, added another dimension to hospitality for the Ritz-Carlton South Beach, which is part owned by the Lowenstein family's Lionstone Group. Lowenstein loaned the hotel 50 pieces, worth $2 million, from her personal collection.

"It was the most natural instinct to get involved with art," Lowenstein says. "Using art in this fashion is also good for the artist. Clients get interested and they start asking questions about the artist and their work."

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Lowenstein also owns the DL Fine Art gallery in Miami's Design District. The gallery houses works from local and international artists such as Matte, Wendy Wischer, Sterz and Gracielia Sacco. Lowenstein says her sales have increased by 20 to 25 percent during the last three years, mainly as a result of Miami gaining attention through events such as the annual Art Basel exposition. Lowenstein would not release exact sales figures.

"Miami is still a very young art scene, but we are growing tremendously," she says.

Investing in art can be a costly endeavor, but advocates say both private and public sector acquirers need to keep the investment in perspective: they are taking a financial risk. Profit is fine but good artwork can impart prominence and notoriety, according to David Kusin, the CEO of Kusin and Co., a Dallas-based institutional economic research firm specializing in the art market.

Kusin says annual revenue for the entire art sector is approximately $22 billion worldwide, with 92 percent of the commerce coming from US and European buyers. Despite that overwhelming statistic, he says there is still room to expand, especially among dealers of contemporary art, which comprise a tiny but growing subset of those annual earnings.

South Florida first gained recognition in the international art world when it began to host the Art Basel exposition in Miami Beach several years ago. Named after the original festival held in the Swiss city of Basel, the exposition displays modern and contemporary art works from North America, Latin America, Europe, South Africa and Asia, which are sold to patrons who attend. The work is mostly 20th and 21st century art, including paintings, drawings, sculptures, installations and photography, by more than 1,000 artists. The festival begins Dec. 1 and last for several days.