We are disappointed by the announcement from the Board of The Substation on their decision to close the company permanently. The Substation has been a Major Company with a long history of more than 30 years. It has had a rich history and has contributed significantly to the cultural scene in Singapore.
The Substation has been aware of the decision to renovate 45 Armenian Street since 2017. There have been constructive discussions throughout this time, most recently, when NAC met with the Board of The Substation on 15 February 2021.
Throughout these engagements, NAC has emphasised that it would like for The Substation to continue its role as an arts incubator. Two key matters have been discussed – the use of 45 Armenian Street, and continued support for The Substation to enable it to contribute to our arts ecosystem.
45 Armenian Street
45 Armenian Street has been earmarked for renovation, alongside the renovation of buildings like The Peranakan Museum and The Singapore Philatelic Museum in the vicinity. The renovations to 45 Armenian Street are targeted for completion in 2023. The site has the potential to serve as an inclusive, vibrant arts space as it did before, in a precinct which has grown in its diversity and accessibility over the years.
The Substation has acknowledged the need for renovations at 45 Armenian Street. NAC has consistently explained to The Substation that it would be welcomed back after the renovations. However, it would return as a co-tenant, along with other arts companies. This would allow for more arts companies to benefit from the enhanced space.
The Substation’s request was to return as the sole tenant and to be the only user of the entire space. It 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. However, NAC was of the view that this was neither feasible nor sustainable in the longer term. 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.
Continued support for The Substation
NAC also offered continued support for The Substation, through the period of the renovations and beyond. NAC offered several interim premises to The Substation, and also agreed to increase its grant funding during the period whilst The Substation was operating from interim premises. This additional funding would come on top of NAC’s direct grants (such as the annual Major Company Grant) which The Substation has been receiving since 1990, as well as funding it has already received from Government’s COVID-19 support schemes such as the Jobs Support Scheme and Arts and Culture Resilience Package. The Substation would have stood to receive further support through such schemes this year.
We had explained that it would not be feasible for any arts company to be sustainable if it relies on almost 90% 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 NAC.
NAC also believed the period which The Substation would operate away from 45 Armenian Street would be a good time for the Board to reflect on the company’s current operating model and role in our arts landscape, given the maturing scene in Singapore.
In this context, NAC offered to work with The Substation on the latter’s review of its artistic and financial strategies, and help it draw up plans that would allow it to uphold its mission and vision, engage in business transformation to return to long-term sustainability, and more importantly contribute richly to the arts and culture ecosystem. In that vein, NAC invited the current Board to co-create the vision for the renovated arts centre with us, and welcomed its return as a co-tenant after renovations.
Permanent Closure of The Substation
NAC was prepared to work closely with The Substation in this effort, even during the interim, both in terms of additional funding and venue arrangements.
NAC therefore deeply regrets that the Board of The Substation has turned down our support to re-imagine its impact on the arts scene and to co-create the vision for the renovated arts centre with NAC, and has decided to discontinue The Substation’s operations, permanently. It is a missed opportunity.
Nonetheless, NAC respects the decision taken by the Board.
We would like to assure the arts community: we agree that 45 Armenian Street must remain a safe space for artistic experimentation, one which supports the work of young unproven practitioners, and is an inclusive, multi-disciplinary arts space. NAC also believes it is important to honour the vision of the founding Artistic Director Kuo Pao Kun.
We have plans to engage practitioners and stakeholders to jointly envision what this new space in the emerging cultural precinct could be. NAC hopes the community will join us in this important exercise to get more Singaporeans excited about and inspired by our arts and culture, and its connection to who we are as a people.
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About the National Arts Council
The National Arts Council champions the arts in Singapore. By nurturing creative excellence and supporting broad audience engagement, our diverse and distinctive arts inspire our people, connect communities and profile Singapore internationally. We preserve our rich, cultural traditions as we cultivate accomplished artists and vibrant companies for the future. Our support for the arts is comprehensive – from grants and partnerships to industry facilitation and arts housing. The Council welcomes greater private and corporate giving to and through the arts so that together we can make the arts an integral part of everyone’s lives. For more information on the Council's mission and plans, visit www.nac.gov.sg.
ANNEX - BACKGROUND INFORMATION
The Government has been financially supporting The Substation since its inception in 1990. Over the last 31 years, NAC grants have amounted to a total $6 million, excluding The Substation’s rental subsidy at 45 Armenian Street, and the matching grants it has received from the Cultural Matching Fund for the donations raised.
The Substation is amongst the top 25% of NAC Major Companies in terms of funding quanta. Based on publicly available data for the period FY17 – FY19, government grants form, on average, 45% (direct funding) of its income with another 41% (indirect funding) from rental income earned from its subsidised space at 45 Armenian Street allocated by NAC. This heavy reliance on direct and indirect government funding of an average of 86% of annual income, the highest among NAC’s 52 Major Companies, would not be sustainable in the long term, and would pose more challenges in a pandemic.
Upgrading of 45 Armenian Street
The Framework for Arts Spaces (FFAS) Scheme, introduced in 2010, aims to benefit as many artists and groups as possible, through the establishment of multi-tenanted spaces, setting a clearer time frame for leases and allowing new entrants into spaces through open calls. Under the FFAS scheme, there is greater opportunity for new entrants in open calls, while existing tenants take part in an open call which is competitively assessed, if they wish to stay on.
This is a fair approach which offers greater access and inclusivity to balance support for existing tenants and potential new tenants. The Scheme applies to all arts tenants, but NAC has taken a phased approach for implementation, and ensure that sufficient notice of at least 18 months is provided to affected tenants.
In the case of 45 Armenian Street, a significant majority of the usage of the premises is by third parties, not The Substation. With more arts organisations and practitioners in today’s landscape, it would thus benefit more arts companies if the space was organised under the FFAS. As custodians of Government resources, it is not feasible for NAC to continue to provide subsidised premises to The Substation, which is then re-let out on commercial terms.
NAC and The Substation had been in discussion on the upgrading of 45 Armenian Street since 2017. The Substation has acknowledged the need for renovations of the site in tandem with ongoing works in the precinct, such as for The Peranakan Museum and The Singapore Philatelic Museum. NAC intends for 45 Armenian Street to be upgraded as an accessible and inclusive multi-disciplinary arts centre with enhanced connectivity to the precinct. This would have required The Substation to re-locate from July 2021 to new premises for the next two years. NAC had offered several interim sites to The Substation.
Arts Infrastructure is a key enabler of the arts scene. This is why we continue to refine the policy on spaces and actively seek private developers and philanthropists to unlock more possibilities, in order to accommodate our growing arts and culture scene. The next phase of our SG Arts Plans will focus on this critical need.
Continued support for The Substation
After 31 years of funding support, the NAC has been concerned as the company was increasingly financially unsustainable. The Government provides almost 90% 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 $70,000 in rental per year. 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 $410,000 to $525,000 of its income over the past three years.
On the other hand, The Substation’s own arts programming activity has reduced significantly, over the years. Its expenditure on programming has been a small proportion of total operational expenses, at 23% on average from FY17-FY19. In contrast, The Substation has incurred more than $1,500,000 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.
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.
NAC had committed to sustain funding support of The Substation as a Major Company until FY2022, as well as to provide increased financial support as a transitional grant for FY2021 and FY2022 when it is off-site. In addition, the Substation has also received funding through the Government’s COVID-19 support schemes, including the Arts and Culture Resilience Package, and stood to receive further support via these schemes. The grants would have helped mitigate operational expenses including salaries and rental costs that may arise from being off-site, while allowing The Substation to continue with some programming.
NAC had offered to support The Substation’s transformation efforts. We had invited them to share their future plans for sustainability and growth so that we could work toward a positive outcome. 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.