MAUREEN Halligan never has to worry about working two jobs to afford expensive vinyl paints and matte acrylics again. Halligan, her boyfriend Marshall Kleiber and fellow painter and filmmaker Ray Sumser each pay $300 a month for a three-bedroom loft at the Tannery Arts Center that includes brand-new kitchen appliances, high ceilings and a music studio with room enough for Kleiber's drumset, electric keyboard and vintage Gretch guitar. High windows and track lighting provide Halligan with just the right amount of light while she works on the series of oil paintings she plans to debut at the grand opening this Friday.

The gathering celebrates the completion of the lofts, Santa Cruz's affordable housing project for the arts, and serves as a reminder that there's more to come at the complex just north of Highway 1 along River Street. On deck for Phase Two are work-only spaces that will provide affordable studios for artists throughout town. A black box theater and the renovation of the old Hide House for use by the Santa Cruz Ballet Theatre Company, along with office suites for nonprofit art organizations, a cafe and an art gallery, will complete Phase Three. Visitors from all over the Bay Area are anticipated, cementing the vision of the Tannery as a collaborative, tight-knit community of dynamic artists as well as a bustling focal point of cultural tourism.

It's the end-product of a process that started years ago, when a Redevelopment Agency survey revealed that many valued members of the creative arts community were being priced out of town. Not only are paints and plaster expensive materials, but unless an apartment is big enough to choreograph dances in or comes equipped with a dark room, money for studio space is an additional financial strain.

"Artists were kind of living stacked up on top of each other," says Tannery Arts Center board director George Newell. Restoring the old Salz Tannery on River Street and turning it into affordable housing with incredibly low rent and ample work space was a way of reeling back in painters, drafters, writers and dancers.

The finished first phase, completed by the East Coast-based nonprofit Artspace Projects Inc., erected 100 units of live-work space, which have been inhabited since February 2009 by some 220 people (including 56 children). To qualify for low-income housing, the applicants must earn less than 50 percent of the median area income, which fluctuates yearly.

The total cost of Phase One was $35.4 million. Trust fund investments of $3.7 million were able to generate or attract around $32 million in outside funding. "These are some of the smartest economic development dollars we have invested in our local economy in a long time," Newell says. He buffers this claim by pointing to the hundreds employed locally for the two years it took to build the lofts.

The work-only studios and performing arts center will solidify a reciprocal relationship between the Tannery and the community. "Phase Two and Phase Three are really the public-serving parts of the project," explains Newell, "As we develop each part of this project, it helps to add credibility to the next chapter. The housing goes up, people go 'Oh, that's the real deal!'"

Each phase was designed independently, so that a wrench thrown into one gear would not disassemble the other two. "As you can see, the first phase is more certain than the last two, since it is built and paid for," says Newell. And that's the trick. This summer renovation will start on the old buildings. Newell assures that "the only real barriers that remain now are funding."

Phases Two and Three are estimated to cost $10 million dollars each. A $2 million grant from the California Cultural and Historic Endowment has given a substantial kick-start to Phase Two, along with a $5 million federal grant still pending. But it's the private sector that Newell credits as the "precious and hopeful source that remains the Tannery's biggest life-saver."

The grand opening will showcase the residents' progress and help keep private investors intrigued. "The day's event will be a good sampling of what the people who live and work have been able to achieve," says Margeret Niven, head of the events committee.

Halligan sees the event as an opportunity to shake the hands of those who have made her new home a reality. At 3pm a speakers program of city officials, including Mayor Cynthia Mathews, will precede a barrage of dance and spoken word performances. An open studios tour of the lofts will give visitors an inside-out view of the creativity Newell identifies as Santa Cruz's most robust renewable resource. "We pretty much achieved our goal of trying to keep people here," he says.

THE TANNERY LOFTS GRAND OPENING CELEBRATION takes place Friday, June 5, at 2pm at 1040 River St., Santa Cruz. Free bike valet provided.

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