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NAC ‘disappointed’ with The Substation's decision to close, says company was ‘increasingly financially unsustainable’

NAC ‘disappointed’ with The Substation's decision to close, says company was ‘increasingly financially unsustainable’

The Substation cited the inability to return fully to the premises and the loss of autonomy over the space and facilities as reasons for its closure on Mar 2, 2021. (Photo: TODAY/Raj Nadarajan)

SINGAPORE: The National Arts Council (NAC) said on Tuesday (Mar 2) that it was “disappointed” with The Substation board’s decision to close permanently, and that the company was “increasingly financially unsustainable”.

Earlier on Tuesday, The Substation board cited the inability to return fully to the premises at 45 Armenian Street and the loss of autonomy over the space and facilities as reasons for its closure. 

It has been a mainstay in the arts scene in Singapore for more than 30 years.

READ: The Substation to close permanently after moving out of Armenian Street building

The NAC said that the centre has been aware of the decision to renovate 45 Armenian Street since 2017.

It met with The Substation board on Feb 15 this year, and has emphasised it would like the firm to continue its role as an “arts incubator”, said a spokesperson for the council.

The spokesperson added that the council has “consistently explained” to the centre that it would be welcomed back after the renovations, which are targeted for completion in 2023, but it would be as a co-tenant with other arts companies.

“This would allow for more arts companies to benefit from the enhanced space,” said the NAC spokesperson.

“The Substation’s request was to return as the sole tenant and to be the only user of the entire space.”

“INCREASINGLY FINANCIALLY UNSUSTAINABLE”

According to the spokesperson, The Substation had sought autonomy over the whole space so that it could generate income from venue hire, including the space formerly leased to Timbre. 

Commercial venue hire contributed to a substantial proportion of The Substation’s annual revenue, he added.

"However, NAC was of the view that this was neither feasible nor sustainable in the longer term," said the council spokesperson.

"In a landscape where there are now more organisations and practitioners, the space would be of greater benefit to the broader arts community, when made available to other arts groups."

The NAC said it has been concerned as The Substation was "increasingly financially unsustainable" after 31 years of funding support.

"The Government provides almost 90 per cent of The Substation’s income through direct and indirect funding. This indirect funding is through the provision of 45 Armenian Street as subsidised premises to The Substation. It pays around S$70,000 in rental per year," said the NAC in response to CNA’s queries.

"At the same time, The Substation lets out part of this subsidised premises on a commercial basis and keeps the proceeds. This includes letting to Timbre, and to various other users, which accounted for S$410,000 to S$525,000 of its income over the past three years.”

The council spokesperson said the NAC had explained that it would not be feasible for any arts company to be sustainable if it relies on almost 90 per cent of its income from government funding, including the commercial tenancy income it derives from leasing out parts of the subsidised premises at 45 Armenian Street allocated by the NAC.

The NAC said that The Substation's own arts programming activity has "reduced significantly" over the years. It pointed out that the company’s expenditure on programming has been a "small proportion" of total operational expenses, at 23 per cent on average from FY2017 to FY2019.

The Substation has also incurred more than S$1.5 million in salaries and other manpower costs.

"This would not be sustainable in the long term, and would pose more challenges in a pandemic. Furthermore, there are assets that belong to the company that will need to be replaced as the building ages," said the NAC.

"The next two years - when 45 Armenian Street is being upgraded - would have been an opportunity for The Substation to review its current artistic and financial strategies and to rethink its mode of operations as its current model is unsustainable in the long term."

CONTINUED SUPPORT FOR THE SUBSTATION

The council spokesperson said the NAC has offered continued support for The Substation "through the period of the renovations and beyond", including several interim premises.

It also agreed to increase its grant funding during the period while The Substation was operating from such premises. This additional funding would be on top of the funds it has been receiving since 1990, as well as funding from the Government’s COVID-19 support schemes.

The grants would have helped to mitigate operational expenses while it was off-site, while allowing The Substation to continue with some programming, said the council.

"We had invited them to share their future plans for sustainability and growth so that we could work toward a positive outcome," said the NAC. 

"We had been prepared to work closely with The Substation to review and draw up plans so that it will uphold its mission and vision, and enhance its contributions to our arts ecosystem."

"A HOME FOR THE ARTS COMMUNITY"

In an FAQ on its website, The Substation addressed the issue of the use of 45 Armenian Street for multiple arts groups instead of as a single arts centre.

It noted the rise in the number of arts groups and space being “at a premium”, but pointed out that it has "always worked with emerging artists and arts groups".

The centre said its facilities have been hired out primarily for arts usage and to members of the arts community.

“After the upgrading of 45 Armenian Street, if the NAC had seen it fit to return 45 Armenian Street to The Substation, 45 Armenian Street would have continued as a home for the arts community and a myriad of diverse artists and multiple arts groups, as it has been for the last 30 years,” the centre said.

It added that NAC's decision to take back control of the premises "appears to have been largely on utilitarian grounds".

“In making this decision, it also decided against conserving the identity and the precious heritage, built over the last 30 years, of 45 Armenian Street,” said The Substation.

“We believe that there must be other buildings or spaces in Singapore, without such a long intangible heritage and historical significance, that could have served as a multi-tenanted arts facility operated by the NAC.

“We understand that all policy decisions come with trade-offs. However, we also note that the arduous work of placemaking also comes with trade-offs, such as the need to prioritise identity and heritage over utilitarian or functionalist concerns.”

Source: CNA/ic

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