City says help coming soon for Austin music venues hurt by outbreak
The millions of dollars the city of Austin promised to live music venues who've been pummeled by the COVID-19 pandemic has yet to be delivered after two months, raising an already high degree of discomfort to clubs struggling to keep their lights on.
But the assistance is coming soon, the city insists, and it'll end up being more than originally planned through additional resources that at one time were thought to have been out of reach.
Last week, the Austin City Council threw a lifeline to venues by offering a tax reimbursement program that could make landlords think twice about proceeding with eviction for non-payment. The program will make use of Chapter 380 incentive agreements -- named for the portion of the state's local government code that authorizes them --- to offer tax breaks to landlords who are willing to renegotiate lease agreements.
Chapter 380 agreements, which are designed to promote economic development, typically are used by cities and counties to recruit companies. In this instance, the aim would be to hold onto companies that are already here. Under a tentative agreement with the city, property owners can get a variety of tax breaks --- for example, cutting rent in half for a term of 14 months could to full reimbursement on city property tax.
Another item the City Council authorized was the creation of an iconic venue fund using unallocated tax dollars collected from hotel guests. The long-term goal is to fill the fund with $15 million in the next five years. In the meantime, $2.4 million will available to selected venues in late January. Hotel occupancy tax revenue typically goes toward promoting tourism and the hotel and convention industry.
"We want this fund to focus on long-term sustainability," Council Member Ann Kitchen said. "We had talked about it to help venues purchase land through down payments or perhaps the city purchasing land and leasing it back to a venue."
Venues and restaurants identified by the city for the program include, but are not limited to, Historic Scoot Inn, Victory Grill, the Broken Spoke, Continental Club, Hole in the Wall, Antone's, Stubb's, the Little Longhorn Saloon, Donn's Depot, Saxon Pub, Elephant Room, Mohawk, White Horse Honky Tonk, Joe's Bakery and Coffee Shop, Sam's BBQ and Cisco's.
"We've done what we can do to weather the storm, but it's time for relief," said Ryan Garrett, general manager at Stubb's.
Stubb's owns the property on which it operates, making it unclear if it will qualify for the tax reimbursement agreement the city is offering to landlords. Garrett said he's in discussions with the city about those details, as well as about reimbursement for the Green Jay music venue on Red River Street, for which he is an operating partner.
"We're taking this month by month," Garrett said. "There's no crystal ball to indicate how quickly we're going to be able to return. This would certainly assist us down the road into the late spring."
As iconic venues have closed over lost revenue in the pandemic --- Shady Grove, Barracuda and North Door are a few --- those in the music industry have pleaded for help from the city.
Seven Grammy winners with ties to Austin --- Christopher Cross, Lyle Lovett, Shawn Colvin, Patty Griffin, Eric Johnson, Joe Ely and Edie Brickell --- sent the City Council a letter in October warning that without the city's intervention Austin will lose its throne as the Live Music Capital of the World. The letter went on to suggest that Austin should support musicians as repayment for the revenue the music industry has brought the city over the years.
Mayor Steve Adler has consistently said that the city cannot meet the overwhelming demand of the venue industry, but that it will be able to help some. Council Member Leslie Pool has estimated the need at $75 million.
The city created a $16.5 million relief fund for small businesses this year, but only a small drop, $377,000, went to 20 music venues. That was less than half of the $888,417 the city paid the Better Business Bureau to administer the program. Another program for creative spaces had $1 million available, but less than half of it, $417,000, went to 12 music venues.
"We've heard a lot of promises, but we need to see results," said Patrick Buchta, executive director of Austin Texas Musicians.
Last week, the council approved the distribution of $20,000 in emergency funds to troubled venues --- freeing up funds that had been on hold since October. The money is intended to keep venues open until they've had time to get approval for additional funding in the city's $5 million fund for at-risk venues. A second fund, also with $5 million, is available to the venues, but also to bars, restaurants and museums.
Adler said qualifying venues should receive $20,000 in emergency assistance by Christmas.
"Any amount of relief right now is going to be monumental to the survival of places like Cheer Up Charlies and Donn's Depot," said Jeannette Gregor, of Amplified Sound Coalition. "We've done everything we can to put pressure on the city council and city management."
The distributing of the money has been held up by a back-and-forth between council members and staff on things like funding sources, program criteria and a "technical assistance evaluation," that tells the city if a venue needs professional help to keep track of its finances.
Eligible applicants who complete the technical assistance requirements can apply for up to $40,000 per month for six months, not to exceed $140,000.
On Thursday, the council is scheduled to consider another item that will provide medical coverage for musicians who don't have any because of the pandemic. It's a contract with Health Alliance for Austin Musicians for a total of $500,000 for healthcare insurance access to Austin musicians.