City Council takes steps toward relief for live music venues and ‘legacy’ businesses

Austin’s struggling live music venues, restaurants, bars and longtime businesses are a step closer to getting some Covid-19-related relief from the city, but some are still holding out hope for quicker relief.

City Council approved Thursday the guidelines for two grant programs that total $10 million set aside for ailing businesses under the Save Austin’s Vital Economic Sectors (SAVES) resolution.

Council also OK’d measures to pump more Hotel Occupancy Tax revenue into businesses deemed “iconic” and approved a program to incentivize commercial landlords to lower rents for businesses.

Since the SAVES resolution’s passage in October, venues, musicians and other folks within Austin’s famed live music community have been awaiting substantial relief, as the outlook for federal relief is uncertain. The city doled out $800,000 in grants to more than 30 venues over the summer, but live music venues say they’re still struggling amid Covid-related closures.

The two grant programs – the Live Music Preservation Fund and the Austin Legacy Business Relief Grant – will allow businesses to apply for an immediate grant of up to $20,000 if they can prove they’re at risk of closure. They can also apply for monthly grants of up to $40,000 that could last six months or until they reach the $140,000 cap.

Legacy businesses must have been operating within the Austin city limits for 20 years and can include creative spaces like theaters and galleries, bars, restaurants and live music venues. Though venues are included in both programs, they can’t double-dip: A longstanding venue that applies for money from one program can’t apply for the other program.

With the guidelines in place, the city now must find a third party to distribute the money, with the hopes of launching the programs by February.

The passage of the guidelines caps an interim in which musicians and venues expressed frustration over how much time the Economic Development Department took to iron out the requirements for the grant programs.

Cody Cowan with the Red River Cultural District said he hopes the grant applications come online sooner, especially since venues, many of which have been closed for the better part of a year, need relief before the new year.

“We expect the same thing that we expect from government that we expect in private business, which is accountability and delivery on a reasonable timescale – not excuses or pushbacks,” he told KUT. “They can do this. Nashville got a million dollars out to venues in 15 days and another million out in another 15 to 20 days. So, city of Austin, what gives?”

Rebecca Reynolds of the Music Venue Alliance told Council members she was glad the Economic Development Department ironed out the details, but that she hoped for more clarity on the overall timeline of the two grant programs. Reynolds also called on the city to extend its moratorium on commercial evictions, which expires Dec. 31.

“We have many iconic venues relying on that moratorium,” she said.

All businesses applying for the grants must undergo mandatory “technical assistance.” While the details on that assistance haven’t been firmed up, the city’s Economic Development Department has suggested it could include guidance on lease renegotiations and evaluations of a business’ long-term planning and budgeting, with an eye toward keeping businesses open long after the pandemic ends.

For Live Music Preservation money, venues seeking money outside the $20,000 emergency relief must comply with the city’s equity plan, which would require venues to commit to promoting and cultivating artists of color within Austin’s music scene, along with undergoing staff trainings on systemic racism and equitable hiring practices.

Council also approved a measure to reapportion tax revenue from hotel stays to support ailing iconic music venues and restaurants. Texas’ tax code allows cities to pull as much as 17 percent of that revenue and dedicate it to businesses that promote tourism, with a portion going back to the state.

Last August, Council members decided to raise Austin’s tax rate on hotel stays, and then OK’d a plan to set aside some of that money to assist venues via a Live Music Preservation Fund. The city also sets aside a portion of that tax revenue to support cultural arts and historic preservation projects.

Thursday’s action would pull some of that unused revenue to supplant venues and directs City Manager Spencer Cronk to come back to Council next month with a plan to draw $2.4 million out of that revenue to assist venues and restaurants. The resolution also directs Cronk to come up with a plan to mete out $2.5 million in payments over the next five years to the fund.

As a starting point, the resolution suggests that applicable businesses could include those already designated as “iconic” on the city’s tourism website. Those businesses include Hole in the Wall, the Scoot Inn, Stubb’s, the Elephant Room, Joe’s Bakery and Coffee Shop, and Sam’s BBQ, among others.

Council members also approved the future creation of temporary rent relief programs by retooling the city’s so-called Chapter 380 program. Historically, the program has been used to attract and incentivize corporations to move to Austin, provided they create a certain number of jobs in the area, among other conditions.

Council directed the city manager to tweak that program to provide property tax reimbursement to landowners in exchange for reducing rents on commercial properties that host live music venues, restaurants, bars, arts venues and child care operations.

This story was produced as part of the Austin Monitor’s reporting partnership with KUT.

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