Returning to 45 Armenian Street as co-tenant after renovation works are complete would have meant that The Substation could no longer operate as an arts centre, its “raison d’être”, said the centre in a press release on Friday (5 March).

In response to the National Arts Council (NAC)’s media statement on 2 March on the permanent closure of The Substation, the arts centre clarified that the Council’s claim that arts centre sought autonomy over the building was so that it would be able to generate income from venue hire is “incomplete”.

“We sought autonomy over the whole space so that we could continue to operate it as a multi-disciplinary arts centre and arts incubator,” read the statement.

It stressed that it is an ‘arts centre’ not ‘arts group’, adding that the operational model of the two are very different.

Using the Esplanade as a point of comparison, The Substation noted it operates much the same way, though on a smaller scale.

The Substation has autonomy over its space which it “dedicates primarily to arts usage” while attracting and hiring suitable hirers in both short- and medium-terms to provide a “community effect” at the space which goes “above and beyond their revenue contribution”.

Like the Esplanade, The Substation also leases out space in the building for commercial use as well as for use by arts groups at a non-commercial and highly subsidised rates. Though, the type of companies that they lease the space out to may differ between the two centres.

“Just as the Esplanade, we have employees who oversee building facilities and venue management, and we bear the costs of property maintenance and utilities,” The Substation added.

The statement went on to stress that The Substation differs from the Esplanade in terms of its market position, with the former catering to emerging and mid-career local and regional artists of all disciplines.

“Our track record of fostering cultural medallion recipients and internationally recognised senior artists attests to the enduring success of this community effect,” the centre added.

The Substation ‘disagrees’ with NAC’s statement of the centre’s financials

As to the NAC’s claim that about 86% of The Substation’s annual income relied on government funding, “the highest among NAC’s Major Companies”, the arts centre “disagrees” with that comparison.

It stressed that the operating model of an arts centre is different to that of a theatre, dance, or music company. It went back to the comparison with the Esplanade.

“Again, by analogy, the Esplanade’s headline figure for deficit before grants was $54,184,000 for FY19/20, and its grants for the year and government subvention-rental of property in aggregate amounted to $56,155,000 in FY19/202 (i.e. more than 100% of its deficit before grants),” explained the statement.

Still on financial matters, the NAC’s had also characterised that the centre’s expenditure on programming as being a “small proportion of total operational expenses”, with an average of 23% from 2017 to 2019, compared to more than S$1.5 million incurred on salaries and other manpower costs.

The Substation countered that the amount of $1.5 million is incurred over three years. On average, the costs was just over S$500,000 per annum. That amount covers the salaries of The Substation’s 11 employees including two Artistic Directors.

The Substation said: “We believe in paying fair wages to our employees, and we certainly do not overpay them.

“Indeed, we believe our employees turn down higher paying jobs in the arts market for the “symbolic remuneration” of working at the Substation.”

On the matter of programming cost, The Substation said that it was 35.7 percent of total expenditure on average for the three financial years, not 23 percent as NAC claimed, according to financial statements from 2017 to 2019.

It went on, “We would also point out that there are different ways to look at expenditure on programming as a proportion of total operational expenses.

“If you include the remuneration of employees whose work encompasses artistic programming, such as the Artistic Directors and Programming Managers, as part of programming costs, our percentage of expenditure on programming as a proportion of total operational expenses increases to 76.3% on average for FY17 to FY19.”

By comparison, the Esplanade’s headline programming cost was only 14 percent of its total expenditure in 2019/2020.

The Substation, at this point, also stressed that reference to the Esplanade is merely an example of the financial model for an arts centre and no a criticism or critique of its financial or operating model.

The Substation was not invited by NAC to be “co-creators”

Next, The Substation also refuted the NAC’s claim in its media statement that the Council had “invited the current Board [of The Substation] to co-create the vision for the renovated arts centre with us”.

“For full transparency, the NAC’s letter to the Board dated 17 February 2021 did not refer to “co-creation”.

“The letter merely stated that The Substation, as a co-tenant, would “be consulted to provide inputs for the future of 45 Armenian Street in relation to its precinct”.”

Not the right outcome for The Substation

The statement went to emphasise the importance of autonomy to is ability to function as an arts centre.

“Once the Substation vacates 45 Armenian Street, taking into account the financial support offered by NAC, and on the assumption we are unable to raise substantial private funding6, we would have to reduce staff by more than half, and our programming budget and bandwidth would have to be drastically reduced,” it noted.

“We believe that this would severely impact the Substation’s mission to nurture younger artists.”

The Substation lamented that the consequence of this would be a “drastic divergence” from its original mission, that “will no longer be The Substation as we know it.”

“Even if we had returned to 45 Armenian Street after the renovations, the Substation would have been a diminished presence in the building that it had occupied and defined for 30 years,” it added.

“The Board did not think this was the right outcome given the proud heritage of the Substation,” the statement concluded.

 

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