Recently I floated the idea for a downtown arts district, maybe dubbed NoMad (for North of Madison) and ideally extending up the Pike/Pine corridor. A possible model comes from Baltimore, as portrayed in this article from The New York Times.
The Baltimore model gives developers a property tax break if they construct or renovate arts-related facilities; artists are exempt from state income tax for art created in the district. (There! Another argument for a state income tax!) I'd put in another feature, borrowed from England: During economic downturns (say when commercial vacancy rates pass 25 percent) and many storefronts are vacant, create temporary incentives for renters and landlords to fill up such spaces with arts-oriented uses. Such a step helps an area to avoid that defeated look, which drags down all other businesses. This might be a fine idea for Pioneer Square.
The Times' story looks at some of the pitfalls. One of the arts districts in Baltimore, for instance, seems to have generated no new arts in its district, Highlandtown/Patterson Park. It lacks a person to lead the effort and it's mostly residential. Clearly, one drawback of the idea is that areas with political clout will demand such a district, even if unsuited. On the other hand, spreading the idea to smaller towns in Maryland seems to have worked, with Elkton (pop. 15,000) using the idea to reduce retail vacancies from 33 to 30.
In Seattle, the action focuses on CODAC, the Cultural Overlay District Advisory Council, which is exploring such ideas for Capitol Hill. The sparkplug is City Councilmember Nick Licata, who tends to favor smaller arts groups over the bigger ones clustering downtown. Adding downtown groups and clout would seem a good idea, though not an easy task in the factionalized world of arts politics.