Kresge Artist Fellow Joel Peterson is known as a composer and bassist who works in avant-garde idioms. But he is also a community builder who operated the Bohemian National Home in Detroit from 2005-08, a landmark performance space for experimental music.

Now Peterson and partner Rebecca Mazzei are close to acquiring a 9,000-square-foot building on Gratiot on the southern edge of Eastern Market. They plan to transform the space into a home for progressive music of all stripes, integrated with a curated gallery, a café and retail shops. All told, it's about a $200,000 development. To make it happen, they have partnered with the nonprofit Eastern Market Corp., which has nested the project within a larger grant proposal pending before a major foundation.

"What we really need are more places for culture that aren't bars or major institutions," said Peterson, who will be performing original chamber works at Art X Detroit. "That's the niche we'd fill, getting people out of isolated scenes and being a crucible for new ideas."

Culture has been on the front lines of rebuilding Detroit since the '90s, when the Detroit Symphony Orchestra, Michigan Opera Theatre and Detroit Institute of Arts began investing what would eventually total more than $300 million into cultural palaces and neighborhood projects. But now action has shifted to individual artists like Peterson, smaller institutions like the feisty Museum of Contemporary Art Detroit and cultural entrepreneurs like gallery owner George N'Namdi.

The five-day Art X Detroit festival is another marker of how culture has reshaped the city's economy and infrastructure and elevated the quality of life in the region. The festival also underscores what local and national arts leaders see as Detroit's untapped potential.

"I think Detroit is potentially the most interesting city in America when it comes to the arts," said Dennis Scholl, vice president for arts at the Miami-based Knight Foundation.

"It's like Berlin -- a city where artists go because studio space is inexpensive. But Detroit also has significant cultural assets like a symphony, opera and major museum, and you have people creating organic grassroots organizations that are young and lively and that draw the creative class."

Arts advocates say political and business leaders, along with many philanthropists, have yet to recognize culture as one of metro Detroit's greatest assets and drivers of renewal. State arts funding is at its lowest level since 1974, and Mayor Dave Bing has had little to say about how culture fits into his vision for the city's revival.

Even as Detroit has become a magnet for artists, the city's major arts institutions -- the DIA, MOT and DSO (which remains in the midst of an epic six-month strike) -- teeter on the brink of financial collapse.

Luis Croquer, director of MOCAD, cautioned that the arts are not a panacea for social ills, from poor schools to public safety, but he said culture has a major role to play in reinventing Detroit.

"The challenge facing the community is figuring out how to connect the dots between the islands of action," he said.

Some of these issues will be explored during panel discussions at Art X and will also be the focus of a separate conference, "Rust Belt to Artist Belt," hosted by the Detroit Creative Corridor Center, next week in Detroit. The conference aims to identify the ways cities like Detroit can leverage artistic communities and other assets to spark growth.

Arts leaders suggest a variety of strategies for growing Detroit's arts economy, from creating subsidies for living-work spaces for artists to funding creative urban pioneers like Peterson to commissioning public art for vast tracts of vacant land in the city.

Creating a reliable stream of public money -- tax dollars -- for the arts is also crucial, said Rip Rapson, president of the Kresge Foundation, which has granted more than $27 million to local culture since 2006.

"We have to figure out some way to get municipal, county and state government back in the conversation," said Rapson. "It can't play the lead, but it has to play a role, as it has in every successful city in America."

In Cleveland, for example, a dedicated county tobacco tax funneled $15 million to more than 130 arts organizations in 2010, including more than $1 million each to the Cleveland Orchestra and Cleveland Museum of Art. In comparison, the DSO and DIA receive no city dollars and a maximum of $20,000 from the state.

Local voters rejected property tax measures in 2000 and 2002 that would have meant millions for 17 leading groups. (The DIA secured legislation last year allowing it to put a property tax measure before voters to fund the museum.)

Meanwhile, while census figures show a 25% population drop in Detroit since 2000, artists have bucked the trend, attracted by cheap housing and studios, the raw energy of the city and an environment pulsating with opportunities.

Photographer Garrett MacLean relocated here from San Francisco in 2007 and cofounded the Yes Farm with two fellow transplants -- a cooperative helping stabilize a tattered east side neighborhood.

"When I moved here, nine out of 10 people who live here looked at me as if I was crazy," said MacLean, 33. "That's changed completely. When people move here now there's no longer any stigma."

Photographer PD Rearick, 32, a recent graduate of the Cranbrook Academy of Art, started a local business serving the photo needs of artists.

"I can be an entrepreneur and take a risk without having to bear the consequences of a bigger city," said Rearick.

Art X Detroit will shine a spotlight on the Midtown neighborhood, where the festival will unfold in a dozen locations. The latest up-and-coming slice of Midtown is the Sugar Hill Arts District, two blocks of emerging commercial, residential and arts activity just east of Woodward, a few blocks south of the DIA.

On a recent Friday night, 600 people poured into the N'Namdi Center for Contemporary Art, a Sugar Hill anchor on Forest Avenue, for the gallery's new show. George N'Namdi's space is part of a $5.5-million project he financed through federal loans, tax credits and grants. The crowd was a textbook of diversity and creative types -- black, white, young, old, city residents, suburbanites, artists, aficionados, students, Bohemians and collectors.

"It's about bringing a certain energy to the city," said N'Namdi. "When you do that everybody benefits, because everybody wants to be a part of it."

Contact Mark Stryker: 313-222-6459 or mstryker@freepress.com