If you’re one of the 2.3 million tourists expected to visit Iceland this year, you’re in luck. The capital city of Reykjavík, home to a modest 120,000 inhabitants, has been graced with a major new arts complex.

Dubbed the Marshall House, the complex officially opened to the public on March 18th and welcomed over 4,000 visitors (a significant turnout for small city). It serves as the new home to the existing artist-run spaces Kling & Bang and the Living Art Museum, as well as a permanent project space and studio for leading Danish-Icelandic contemporary artist . The space represents a milestone for the country’s intimate art scene, and a vote of confidence in its artist-led initiatives.

This is not your token art destination in the style of the Guggenheim Bilbao or Fondation Louis Vuitton. Rather, the Marshall House is located in a former herring factory—a lofty, bright-white building lined with windows that sits on the industrial end of Reykjavík’s harbor. The surrounding area, known to locals as Grandi, is increasingly emerging as a new cultural district, populated by shops and restaurants.

Built in 1948 with U.S. aid from the post-World War II Marshall Plan, the 1,800-square-meter warehouse sat vacant for years before local architecture firm Kurt og Pí hatched a plan for the arts complex. Coordinating with local contemporary art gallery i8 (which represents Eliasson in Iceland), the architects developed a team of interested occupants. Together they pitched the ISK 450 million (just over $4 million) redevelopment to the owner of the building, the fishing company HB Grandi (the neighborhood’s namesake). Kurt og Pí then obtained a 15-year lease funded by the City of Reykjavík to establish the Marshall House.

The space arrives following a rapidly changing real estate climate in the city over the past decade. Following the major financial crisis of the late 2000s, the number of new residential buildings being built in Reykjavík plummeted, and tourism exploded (due in part to the depreciation of the krona). And last year, new laws were passed to regulate Airbnb and other temporary rental practices that have contributed to rising housing prices. Within this context, artist-run spaces Kling & Bang and the Living Art Museum have struggled to survive and keep their spaces.

“It’s a new level for the art scene here,” Ingibjörg Sigurjónsdóttir of Kling & Bang told me over coffee at the gallery’s new headquarters. The site overlooks the harbor and fishing warehouses, while the gleaming Harpa concert hall (its faceted glass facade was designed by Eliasson) lingers in the distance. The gallery launched its new space with “Bad Company,” a group show of artists who recently graduated from art school in Iceland or those with close ties to the country.

“There’s not much of a commercial art scene here, so being an artist and having exhibitions is very different than other places,” she added. Founded in 2003 by 10 artists, the influential collective has become expert in occupying disused (often leaky) buildings that sit idle while waiting to be sold. As such, the group has had to move frequently.

The Living Art Museum has known similar challenges. The space was begun in 1978 by a group of artists who were reacting to what was then a conservative art establishment. In May 2014, it moved its considerable collection of over 2,000 artworks (all of which were donated) to a secondary space in the suburban town of Breiðholt, after the bank that owned its downtown premises increased the rent nearly threefold.

“We need to keep the state involved in this scenario,” Living Art Museum director Thorgerður Ólafsdóttir told me over lunch at the new restaurant on Marshall House’s ground floor (which serves some of Iceland’s finest seafood delicacies). “I think the city has realized what an important contribution artist-run spaces can bring—and then it’s a bonus to have Olafur Eliasson in the building!”

The Living Art Museum opened its new space with a solo presentation of its late founding member Ólafur Lárusson. Despite being known as a performance art pioneer in Iceland, Lárusson has often gone overlooked by art historians.

During my visit with , the internationally acclaimed Icelandic contemporary artist, he too stressed the important role that artist-run spaces have played here. “Artist-run spaces are the backbone of Reykjavík’s art scene,” Kjartansson told me at his studio, a converted fishing storage unit a stone’s throw from the Marshall House. “Having this permanent space will give them the freedom to focus on their shows.”

Eliasson, too, will benefit from the new space, with a two-floor section of the complex to host a rotating selection of his works, in addition to special events and projects. And beginning later this year, he’ll open a studio space on the top floor (his main, bustling studio is run out of Berlin). “I’ve always felt emotionally very connected to Iceland,” Eliasson said. “Its landscape and unique light conditions have been a strong source of inspiration, and an environment in which to test artistic ideas.”

As the excitement builds for what is set to be a new chapter of Reykjavík’s art scene, trendy cafés and shops have sprung up alongside the road leading to the harbor. And even though the city has imposed a strict ban on hotels in the area, one is left wondering about the long-term effects of regeneration and the possibility of soaring rents for the artist-led initiatives.

“The City of Reykjavík is committed to investing in arts and culture,” said Dagur B. Eggertsson, the city’s mayor. “We are certain that the new neighbors will further strengthen the development in and around the old harbor district, where we now have a perfect harmony of residential area, fishing industry, small and medium businesses, culture, and art.”

The next 15 years (the duration of the current lease) will be telling for the Marshall House occupants, and the Reykjavík art scene at large. “We don’t know how the cultural landscape will evolve in the next 15 years,” Ólafsdóttir said. “Maybe if a lot of puffin shops pop up, this end of the area wouldn’t be as exciting for us!” she joked, nodding to the ubiquitous souvenir shops filled with stuffed toy birds found across the city center’s streets.

Puffins or not, there’s reason to celebrate the Marshall House, a new symbol of Reykjavík’s persistence in supporting its artists through innovative, bold initiatives.