Austin City Council wants limited local stimulus package to help small businesses outlast pandemic, not just pay rent

Austin City Council unanimously supported aiming its local stimulus package toward the long-term viability of local at-risk businesses. (Courtesy ATXN)
Austin City Council unanimously supported aiming its local stimulus package toward the long-term viability of local at-risk businesses. (Courtesy ATXN)

Austin City Council unanimously supported aiming its local stimulus package toward the long-term viability of local at-risk businesses. (Courtesy ATXN)

Aiming to slow the wave of permanent closures brought on by the pandemic for the city’s music venues, legacy businesses and child care facilities, Austin City Council has redirected its stimulus package created two weeks ago to focus on helping the businesses outlast the pandemic and possibly beyond.

The mayor and City Council unanimously decided Oct. 15 that its $15 million Saving Austin’s Vital Economic Sectors program, or SAVES, they created with tax dollars would be used to ensure the long-term viability of businesses within the three categories. What long-term viability looks like, or how its achieved, remains vague, but with its vote, City Council directed city staff to get moving on the program.

Austin Mayor Steve Adler said he wants the child care facilities, music venues and legacy businesses helped by the program to end up better off than they were before the pandemic hit the city in March. Many of these businesses were at risk of closure long before the pandemic due to skyrocketing property values and thin margins.

Instead of simply paying rent owed by the businesses, the city plans to offer help through technical expertise. Adler said, more than cash, many business owners need professional help in renegotiating long-term leases or reorganization. He said, through the program, the city will call on private attorneys and certified public accountants to assist small-business tenants at the negotiating table with their landlords. The hope is the technical assistance and help with some capital will set live music venues, legacy businesses and child care facilities up to outlast the pandemic.

Although City Council agreed the goal should be long-term sustainability, some voiced concern that this renegotiating or working legal issues out could take time many struggling businesses no longer have as they move into month eight of the pandemic economy.

During the same meeting, City Council unanimously approved creation of a new Business Preservation Fund, which set aside $2.3 million, mostly pulled from the transportation department’s budget. Unlike the SAVES funding, the preservation fund can be used by city staff to dole out rental and emergency assistance to qualifying businesses to help hold them over for the next few months.

The shift to reserving SAVES money for long-term viability happened earlier this week after city staff proposed a program that aimed to offer effective short-term assistance to as many qualifying businesses as possible. The $5 million child care facility program would cap grants at $60,000 per business; the $5 million live music venue program was proposed to provide a maximum $40,000 per month for four months; the $5 million legacy business program would offer one-time grants of $40,000-$60,000 to locally owned businesses that have operated for at least 20 years.

City Council said the limited funds of the program had to do more than provide short-term relief and aim more at ensuring the businesses are able to outlast the pandemic, which has already shut down several iconic Austin businesses, from Threadgill’s and Shady Grove to I Luv Video and Magnolia Café. Local and federal health officials expect the pandemic to last well into 2021.

Calls to help the music venue sector, which, unlike many other industries, has remained completely shut down since March, have reached City Council since the city canceled South By Southwest earlier this year. Those calls have ramped up in recent months as many worry the city could lose its self-proclaimed title as the “Live Music Capital of the World” without some kind of government intervention.

City leaders acknowledge its $15 million stimulus package is not enough and have called on state and federal officials to send needed financial assistance.

“This is not easy,” District 6 City Council Member Jimmy Flannigan said just prior to voting for the programs. “There is not enough for everybody because we’re just not built to have enough for everybody.”
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.


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