Empire concert venue gets city dollars to buy land, plan expansion

City funds have helped to preserve another live music venue, with the Rally Austin economic development organization announcing Wednesday it had completed a deal to help Empire Control Room & Garage acquire all of the property it has used since opening in 2013 on East Seventh Street.

In a post on LinkedIn, the organization noted, “The community’s investment also supported the intention to expand Empire Control Room and Garage to increase capacity at the venue in the future.”

The post did not note how the deal was structured or funded, though it does have control over the funding remaining from the 2018 city bond package that secured $12 million for the creation and preservation of creative spaces.

The venue, which actually comprises two parcels, was nearly displaced in 2018 when its 2,200-square-foot indoor portion was nearly sold to World Class Capital Group, the company formed by troubled real estate magnate Nate Paul. Prior to that unsuccessful acquisition, Paul had purchased the buildings that held the downtown dance clubs Kingdom and Ethics and evicted both, causing worry that Empire would also close if Paul took control of the property. Venue co-owner Stephen Sternschein and partners Lou Ellman, Steven Kalil and Jeff Speck raised the money to buy the building, securing its future along with the neighboring 3,000-square-foot “garage” space that prior to the sale had been owned by Trey Spaw, co-owner of the neighboring Side Bar.

Sternschein declined to disclose the purchase price or terms of the deal for the property, which most recently was appraised at $2.8 million by Travis County. The combined venue spaces, which sit on 15,000 square feet of property, have a total occupant capacity of 1,300 people.

Plans for expanding capacity and making other improvements will be announced in the coming months, Sternschein said, adding that having ownership of both parcels makes it possible to confidently invest in the venues.

“In most cases, the venues that do well are the ones that have good relationships with their landlords. We’ve had a great relationship with our landlords here for many years, and that’s why we’ve been able to do it,” he said. “By doing this, we are committing to keeping the place a music venue for the foreseeable future.”

The Empire deal is the fourth major venue investment in just over a year for Rally Austin, which has been working to deploy about $19 million in city funds ID’d to preserve and create music venues and arts spaces. Previously, the group has helped secure properties or long-term leases for the Hole in the Wall music venue, Austin Playhouse theater and Museum of Human Achievement arts space.

Rally Austin didn’t respond to an interview request regarding the deal.

Sternschein said the demand for commercial and residential space downtown and the thin profit margins yielded by concert spaces make it harder each year for the surrounding Red River Cultural District to remain stable. With ownership of the property now secure, he said he and his partners don’t have to worry about if the business will exist past their existing lease.

“It would be impossible for us to have done what we have done and invest what we have in the space without owning the dirt,” he said. “If you do terrible as a business, you leave and then the next person gets the benefit of all the money you put into the space along with the landlord. And if you do great, when your term’s up you have to fork over pretty much all that improvement and value to the landlord or move the business because that’s just a cycle. That’s the cycle that creates high-rises and destroys creative cultural districts.”

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