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Council approves $15 million for music venues and child care, but some members want more

Ryan Autullo
Graffiti at Threadgill's Old No. 1 on North Lamar Boulevard on Wednesday commemorates the place where rock 'n' roll superstar Janis Joplin launched her singing career in the 1960s. The restaurant and live music venue closed in April during the coronavirus pandemic. The Austin City Council on Thursday approved $15 million in funding to help live music venues, bars and child care services affected by the pandemic. [JAY JANNER/AMERICAN-STATESMAN

Austin City Council members on Thursday tossed a $15 million lifeline to live music venues, bars and child care services that are drowning in debt from lost revenue during the COVID-19 pandemic.

The SAVES resolution — short for Save Austin’s Vital Economic Sectors — will give a boost to selected businesses that are likely to close without the assistance.

But efforts to increase the funding mostly failed as the council voted against directing the city manager’s office to get back to them with an impact analysis of temporarily using at least $10 million from Austin Convention Center reserves. The council also rejected a similar item that would have directed the manager to explore reducing incentives to local corporations by up to 75% to free up money for SAVES.

Council Member Kathie Tovo, who represents the district that covers the downtown area, proposed both amendments. The item related to the convention center failed 5-4, with Council Member Delia Garza abstaining. Council Member Pio Renteria voted against it, saying the proposal would give “false expectations” to those it would benefit.

The $15 million will be allocated to three pools, each of $5 million. The Austin Music Venue Preservation Fund supplies grants to live music venues. Those venues are also eligible for the second pool, the Austin Legacy Business Relief Grant, as are restaurants and arts organizations. A third pool is strictly to help child care providers.

The source for much of the funding changed since the council’s work session on Tuesday. An amendment from Mayor Steve Adler struck plans to take $4.8 million from a pay for success initiative for responding to the city’s homelessness crisis and $3.7 million collected from temporary use of right-of-way fees.

To make up for the $8.5 million struck out by Adler’s amendments, the council is scheduled on Oct. 15 to discuss using sales tax revenue collected this fiscal year in excess of budgeted projections. The other $6.5 million will come from financial and building services funds.

Adler, as he has done for weeks, cautioned that the city will not be able to help every at-risk business. He has been calling for additional federal assistance and challenging Gov. Greg Abbott to release more than $5 billion that expires at the end of the year.

“There is such an incredible scale of need in the city that we can’t address,” he said.

To qualify for the $15 million, businesses must face a substantial likelihood of closing permanently without assistance. Additionally, there must be a very low likelihood of a similar business reopening in the same or nearby location because of rent costs.

There was some movement on the council to allocate more of the $15 million for restaurants. But Adler countered that restaurants are operational right now and music venues are not. He also argued that music venues will be more difficult to replace if they close. The amendment failed 7-3.

A survey conducted by the University of Houston’s Hobby School of Public Affairs found that up to 90% of the city’s live music venues could close by this month.

The $15 million is well short of the $75 million Council Member Leslie Pool said is needed. That estimate, she said, assumes 1,500 businesses on average will each need $50,000 to keep from closing. Pool has failed to convince the majority of the council to tap into the city’s hotel occupancy tax reserves, which city staff recommended against.

Pool on Thursday offered a bit of a compromise with an item that directs the city manager to identify income at the Austin Convention Center that is not generated from hotel occupancy taxes and present options to use the funds for relief programs identified in the SAVES resolution. That item passed.