Downtown business report finds problems for daytime demand, music venues

A new report on Austin’s downtown economy finds that there is a persistent weakness in weekday business, and that entertainment businesses concentrated around East Sixth and Red River streets have been slow to recover from effects of the Covid-19 pandemic.

Downtown Austin Alliance produced the report, which supports earlier findings this year that the ongoing absence of office workers who are now working remotely represents the most significant soft spot for the 532 businesses identified as currently operating. The report found 36 new businesses and a total of 740 occupied storefronts, with a 64 percent increase in active businesses compared to a similar study conducted in February.

Recent pedestrian counts along South Congress Avenue, the main north-south artery for the district, were found to be at 80 percent of 2019 weekend counts, but only 60 percent of comparable weekends in 2019.

Looking at the state of entertainment businesses downtown, the report notes, “Total monthly alcohol sales and weekly visits to East Sixth Street and Red River have consistently lagged their counterparts in recovering. This highlights the economic losses these businesses have experienced during the pandemic as live music stages, the key driver to these districts, were closed throughout most of 2020.”

Jenell Moffett, DAA’s associate vice president of strategic initiatives, said the ongoing strong demand for office space downtown is likely to result in a gradual strengthening of daytime business as companies move into available spaces and bring more workers into the area regularly.

“This is such a big experiment with new behaviors coming into play. The office space is still there and the demand is still there, so it’s a matter of how to leverage that demand,” she said. “Once you realize the business you’re in and demands of employees then you make the decisions about what kinds of office space you need and if being downtown is the right fit.”

On the issue of weeknights and other ongoing softness, Moffett said DAA is putting together a new marketing program likely to launch early next year that will encourage Austinites to reconnect with downtown.

To help live music venues in their recovery, DAA staffers are working to identify funding sources and other assistance programs that can provide some cushion for the historically thin-margined industry.

While some nightlife districts have already seen their business pick back up, Moffett said the clubs that operate entirely around music programming were unable to resume normal activity because of the summer surge in Covid-19 infections.

“What we’re finding is that lull in not being able to have live concerts or host events is a unique challenge to those districts, whereas on West Sixth Street or Rainey Street, live music is not the main selling point and there is a customer base that goes there to partake in different activities,” she said.

“For East Sixth Street and Red River it is concerts and live music and there’s a different entertainment setup where you have to limit people coming through the door, book talent that may have to fly in … and all of those things may have been impacted by the Delta variant, and that makes it more complicated in terms of what it takes to make those districts function well.”

Cody Cowan, executive director of the Red River Cultural District, said the report confirms the precarious state of the city’s signature nightlife areas. He mentioned a ray of optimism in the new sidewalks, lighting, planters and banners slated for installation by early next year that are expected to make the area more inviting for tourists.

He also said recent conversations with developers eyeing vacant spaces on Sixth Street between Interstate 35 and Red River Street have come with promises of incorporating music venues into some of those projects, adding more stages and music jobs to the area.

“If you look at the report it has sad numbers for Red River, but also for historic Sixth, and there’s a lot of troubling stories that come out of Sixth and it is time for us to get excited about things changing there,” he said. “We structurally have a lot of things that need to change there.”

Photo made available through a Creative Commons license.

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