By Gary Schuster, Esq.

A new law of interest to everyone in the arts and culture been passed by the New York State legislature, effective immediately: the Municipal Theme Districts Act (General Municipal Law Article 19-B). The purpose of the law is stated as follows:

Across the nation municipal theme districts have arisen to construct, renovate and geographically coordinate areas of a municipality into a common area for art, entertainment, education, culture or business. These areas develop the economy, tourism, culture, education and the quality of life of a community. It shall be the public policy of the state to encourage the development of theme districts and to promote their establishment, designation, administration and success.

Under the new law any county, city, town or village (“Local Government”) may designate a Theme District for the purpose of promoting, advancing or coordinating an “approved theme”. The theme must relate to art, entertainment, education, culture or business.

Any resident or business owner within a proposed Theme District may apply to the relevant Local Government for designation of a Theme District. The application must identify the boundaries of the proposed district, the nature of the theme, and must include a detailed development plan. A Theme District must consist of at least 10 acres and 30 buildings, or must be reasonably certain to contain 30 buildings within 5 years of designation.

A Local Government would approve an application and create a Theme District by appropriate resolution or local law. When creating a Theme District, a Local Government must also appoint a 7-member Theme District Board to operate and administer the Theme District. Each member of the Board is to serve at the pleasure of the appointing body. Any Theme District may be terminated or modified by the Local Government that created it.

The Municipal Theme Districts Act does not provide for any financial incentives to businesses or non-profits within the Theme District. Another law proposed during the last legislative session, the Cultural Development Areas Act, did provide for both specially designated areas and various financial incentives, but that law was not passed. No doubt the legislature was unwilling to offer state-wide incentives in times of fiscal austerity. Compared to the Cultural Development Areas Act, The Municipal Theme Districts Act might seem to be “half a loaf”, but it does offer communities something of value.

Once created a Municipal Theme District will facilitate the enactment of special zoning and other regulations. Local Government could require the use of uniform styles of building signs and “street furniture”: streetlights, trash cans, benches and the like. Hours of operation of businesses might be changed. Types of businesses not ordinarily permitted might be allowed. Marketing is made easier since a Theme District will likely be given a catchy name like “Little Italy” or “Tribeca”. Once a Theme District is up and running, its members might be inclined to take the next logical step and create a Business Improvement District, in which a corporation is created having the power to assess its membership and spend the funds on improvements and programs within the district.

While the Municipal Theme Districts Act might not be everything some arts activists could hope for, it is a meaningful step and a sign the legislature appreciates the arts and culture as an engine of economic development and urban renewal.

Gary Schuster is an attorney with Jacobowitz & Gubits, LLP, in Walden, New York. The information in this article is for general information purposes only. It is not, nor is it intended to be, legal advice for any particular person or circumstance, or for Internal Revenue Code purposes as described in IRS Circular 230. This article is no substitute for obtaining legal advice from an attorney based on your particular circumstances.