Austin City Council finds $15 million to lighten pandemic pain on music venues, child care, legacy businesses

Pictured here is a concert at the Mohawk on Red River Street. (Christopher Neely/Community Impact Newspaper)
Pictured here is a concert at the Mohawk on Red River Street. (Christopher Neely/Community Impact Newspaper)

Pictured here is a concert at the Mohawk on Red River Street. (Christopher Neely/Community Impact Newspaper)

Almost seven months into the pandemic, local businesses who have held on in the child care, live music and service industries could receive some financial aid from the city; however, many industry members have said that the $15 million in aid from the city represents a pittance as compared to what is needed to save the local industries.

Austin’s mayor, City Council members, bureaucrats, small business owners and workers acknowledged as much ahead of the unanimous vote to pool together the money from corners of the city budget.

Austin Mayor Steve Adler said the scale of the “enormous” challenge would require state and federal assistance.

The city has not seen much funding from Washington since receiving the CARES Act money in the spring. With that money already spent, scant progress from U.S. Congress and no indication of additional assistance from the state, two weeks ago, City Council told City Manager Spencer Cronk to leave no stone unturned in a scramble to find aid dollars for some of the local industries on the brink of collapse.

In the “Live Music Capital of the World,” music venues and child care facilities as requiring the most targeted assistance—two types of businesses that, if lost, would be difficult to replace, officials said.

After a week-and-a-half dive into the budget’s couch cushions, the city manager's staff came back with $15 million. The city will likely divide the $15 million into three funds with $5 million each: a music venue preservation fund; a child care provider relief grant; and a legacy business relief grant, which will be available to a range of businesses determined to meet the standard of being a “legacy” business.

City Council spent the morning listening to service industry workers and business owners, music industry artists and employees, and child care facility managers describe their dire situations nearly seven months into the pandemic’s economic devastation. Some aggressively urged City Council to “do [their] jobs and get us the money we need,” while others said the money was needed, but was not nearly enough. Some criticized the federal government’s lack of assistance for what they said was “giving us an eight-week solution for an eight-month problem.”

A common refrain over the last two weeks was the city’s economic development department’s choice of the Better Business Bureau to administer CARES Act funding to local businesses in need. Many complained that the city needed to choose an administrator with local roots that understood local nuance. However, city staff maintained that the BBB was the right choice at the time. The city has not determined the mechanism for choosing recipient businesses and distributing City Council’s $15 million stimulus.

To amass $15 million, City Council unanimously approved pulling $6 million initially budgeted for the city’s human capital management system and $500,000 from “less critical” maintenance projects. City Council said it would pull another $8.5 million in sales tax revenue with a vote in two weeks, which was initially proposed to come from a program to house the homeless and an increase to the city’s transportation user fee. However, City Council decided funding it through sales tax revenue, which, so far, is $12 million ahead of early pandemic projects, would make more sense.

Deputy Budget Officer Ed Van Eenoo said his office was still examining other funding sources. The $15 million presented to City Council represented what staff could pull together within council’s two-week deadline.

At one point, Council Members Leslie Pool and Kathie Tovo floated proposals to look into the city’s existing corporate tax incentive agreements. Van Eenoo said the city is set to pay $10.2 million to corporations, such as Apple, Samsung and Visa, for meeting agreed-upon performance metrics in 2019.

Pool and Tovo tried to gain support from City Council to look into these agreements and see whether it would be possible to delay the millions in payments for next year in order to fund aid for local businesses; however, a majority of City Council members, led by Adler, disagreed with touching the corporate tax incentive deals. Adler further said that doing so would send a bad message.

Adler said he was encouraged by some of the progress made in recent days by the federal government. Carried by a Democratic majority, the U.S. House passed a $2.2 trillion stimulus package bill Oct. 1, according to reports. That bill was opposed by House Republicans; a successful stimulus package will require approval from the Republican-led U.S. Senate. According to reports, U.S. Treasury Secretary Steve Mnuchin has said the $2.2 trillion package is too high and countered Oct. 1 with a $1.6 trillion package.
By Christopher Neely
Christopher Neely is Community Impact's Austin City Hall reporter. A New Jersey native, Christopher moved to Austin in 2016 following years of community reporting along the Jersey Shore. His bylines have appeared in the Los Angeles Times, Baltimore Sun, USA Today and several other local outlets along the east coast.


The U.S. Food and Drug Administration’s Vaccines and Related Biological Products Advisory Committee recommended Johnson & Johnson’s one-shot vaccine for emergency authorization use Feb. 26. (Courtesy Adobe Stock)
Johnson & Johnson COVID-19 vaccine recommended for emergency authorization use by FDA

This is the third COVID-19 vaccine that has been approved for emergency authorization use after those produced by pharmaceutical company Pfizer and biotechnology company Moderna.

Josh Frank, owner of Blue Starlite Mini Urban Drive-in for more than a decade, holds up a Blue Starlite-branded mask. (Photo by Olivia Aldridge/Community Impact Newspaper)
Long-time Austin theater Blue-Starlite Mini Urban Drive-In takes on new life in pandemic

Drive-in theater Blue Starlite found itself in a unique position in 2020: After more than 10 years as a small business “just getting by,” demand for drive-in movies exploded, owner Josh Frank said.

The University of Texas Radio-Television-Film department will be offering virtual camps this summer. (Courtesy The University of Texas)
2021 Central Austin summer camp guide: 44 options including virtual and in-person offerings

Our list of camps happening in Austin this summer includes options focusing on academics, arts, sports and language.

Samsung's proposed $17 billion chip-making plant would dwarf other recent megaprojects that sought tax incentives in the region.
Samsung’s request to pay no property tax on $17 billion plant tests Austin’s incentive policy

Samsung is asking for 100% property tax reimbursement over 25 years, which would mark the most aggressive corporate tax break in Austin history.

A new Johnson & Johnson COVID-19 vaccine could help expand vaccination availability in Travis County, according to local health officials. (Courtesy Pexels)
Johnson & Johnson vaccine could mean additional supply, easier distribution rollout in Travis County

If approved, the Johnson & Johnson vaccine will be a valuable weapon against the ongoing pandemic, according to local health officials.

Austin ISD students will begin the 2021-22 school year Tuesday, Aug. 17. (Nicholas Cicale/Community Impact Newspaper)
Take a look at Austin ISD’s newly approved calendar for the 2021-22 school year

Austin ISD trustees have approved the academic calendar for the upcoming 2021-22 school year.

Snow covers I-45 in Houston during a winter storm that hit Texas the night of Feb. 14. (Shawn Arrajj/Community Impact Newspaper)
Legislators probe energy officials over power failures, lack of preparation heading into winter storm

The Texas Legislature held hearings Feb. 25 with energy companies including Oncor Electric Delivery and the Electric Reliability Council of Texas in response to last week’s historic winter storm, which left millions of Texans without electricity for days.

Austin ISD students are scheduled to return to classrooms March 1 for the first time since Winter Storm Uri. (Courtesy Adobe Stock)
Winter storm damage could prevent 10 Austin ISD campuses from reopening next week

Austin ISD students are scheduled to return to classrooms March 1 for the first time since Winter Storm Uri.

A tree's branches fell on a car in North Austin in the midst of Winter Storm Uri in February. With downed tree limbs and burst water lines causing property damage across Austin, the city has directed additional funds into programs to help some homeowners with emergency home repairs. (Iain Oldman/Community Impact Newspaper)
Still in crisis mode, Austin City Council initiates recovery following winter storm

With 200 to 400 apartment and condo complexes in Austin still without water, City Council is aiming to direct aid and relieve some of the financial burden felt by residents following the devastating winter storms.

Photo of a knife cutting through brisket
La Barbecue heads to new home on East Cesar Chavez Street

The popular barbecue joint will move to its new location in May.

Jo's Coffee opened a North Austin location in January. (Courtesy Chad Wadsworth)
Jo's Coffee opens in Central Austin; new restaurant coming to Georgetown Square and more Central Texas news

Read the latest business and community news from the Central Texas area.