Famous artist's space by town (7)
I believe the answer is:
eminent
'famous' is the definition.
(eminent can mean famous or influential)
'artist's space by town' is the wordplay.
'artist' becomes 'emin' (Tracey Emin).
'space' becomes 'en' (in printing, a space as wide as a letter 'n').
'by' is a charade indicator (letters next to each other).
'town' becomes 't' (abbreviation for town).
'emin'+'en'+'t'='EMINENT'
(Other definitions for eminent that I've seen before include "Lofty; famous" , "Respected; notable" , "Respected; distinguished" , "Respected; outstanding" , "Important" .)