Austin City Council’s Initial Relief Fund Proposal Isn’t Enough for Local Restaurants

This week, the City of Austin shared its initial recommendations for funding allocation from its Save Austin’s Vital Economic Sectors (SAVES) resolution. The result is a $15 million fund meant to help keep the city’s local restaurants, bars, venues, child care businesses, and arts-focused organizations afloat during the COVID-19 pandemic. The $15 million is broken into three $5 million buckets and designated by business type.

While Good Works Austin (GWA), the local nonprofit advocating for the city’s small businesses, is pleased that there is some sort of financial support being offered, the group doesn’t believe this is enough to keep restaurants, bars, and venues operational.

The city committee, which includes assistant city manager Rodney Gonzales, deputy chief financial officer Ed Van Eenoo, chief equity officer Brion Oaks, and chief economic recovery officer Veronica Briseño, presented their findings for the SAVES fund during a work session meeting on Tuesday, September 29. The three $5 million categories are:

• The Austin Music Venue Preservation Fund, dedicated for live music venues, which is something that had been in the works well before the pandemic.
• The Austin Legacy Business Relief Grant, intended for what the city deems as iconic live music venues, restaurants, and arts-focused organizations (the latter is a newer addition)
• The Austin Childcare Provider Relief Grant, for child-care businesses and providers

However, GWA contends that Austin’s restaurants and bars deserve separate funding. As it stands, restaurants and bars will be grouped together with iconic venues and arts organizations to fight over access to a pool of $5 million, as the group, led by founder and general manager of Mueller Italian restaurant L’Oca d’Oro Adam Orman, wrote to the city council in response to the recommendations on Tuesday.

Without substantial funds, many of Austin’s restaurants and bars “will be out of cash by the end of the year without future assistance,” reads the letter, “and will have to lay off staff again in order to get even that far.” If the ultimate goal of SAVES is to revitalize the city’s economy, restaurants and bars need to be able to bring back their employees. But this will be difficult — near impossible — to achieve if businesses are not provided funding and resources allocated with their long-term survival in mind.

The group emphasizes that funds should be distributed based on the urgency level for individual businesses rather than the more broad designation of business type. “Lots of venues will rise to the top of that list because they haven’t been able to open at all,” notes the letter. They also underline the importance of giving priority to BIPOC-owned businesses.

The possibility of another surge of COVID-19 cases and hospitalizations, increasingly probable as more restrictions are being lifted throughout the state, could further complicate the city’s proposed funding plan. A third shutdown to mitigate the virus would “further damage bars and restaurants,” the group writes, “many of whom will not recover from a third reduction of capacity by the state.”

Earlier this month, GWA put forth its own relief fund proposal of $75 million, which would use money intended for the Austin Convention Center expansion. The group feels that it doesn’t make sense for the city to invest in the convention center project right now; the first focus should be ensuring that local small businesses are supported before a development meant to attract out-of-town businesses and tourists.

The group also takes issue with the fact that a source of the city’s proposed funds is a program that provides assistance to the homeless in the city: $4,800 will be pulled from the Pay for Success Reserve Fund, which encourages investors and businesses to financially aid projects for the homeless. GWA has been helping to feed the homeless during the pandemic already, and, as the letter notes, “will not participate in a program that involves borrowing money from them.”

GWA notes that the SAVES proposal doesn’t include any other methods of help. While, yes, restaurants and bars would first need enough money to stay somewhat stable, offering avenues of deferring or reducing rents, utilities taxes, and/or personal property taxes would help relieve financial pressure from business owners. “We are shocked that there is no mention of other assistance,” the group writes. Another potential resource, they say, is awarding food contracts, like those feeding the city’s food insecure communities, to local restaurants rather than national catering chains.

The city’s presentation did include questions to be considered from the Government Alliance on Race and Equity, a network of local governments devised to work on racial equity. It cited an NPR report about FEMA payouts, where white homeowners benefitted more across the board than Black and Latinx homeowners. The presentation also included questions designed to stimulate thinking about who and what organizations are ultimately benefiting from these funds, but doesn’t provide any answers.

“I hope that you will take these recommendations into consideration,” GWA writes, “and increase the size of the fund created by SAVES to reflect the amount of businesses affected and the depth of hardship they are facing.”

The city’s proposal outlines potential non-monetary ways of supporting businesses, which include hosting virtual performances with local artists and musicians through the city; initiating a marketing campaign to promote small independent businesses; engaging third-party companies to offer lease mediation services for at-risk businesses; and creating comprehensive guides for businesses on new ways to make money, like pivoting to online sales or hosting virtual events.

The ordinance is on the Austin City Council’s agenda for approval during the meeting being held on Thursday, October 1.

• Save Austin’s Vital Economic Sectors (SAVES) Program Recommendations [City of Austin]
• Memorandum [City of Austin]
• Austin Restaurants Need Financial Relief Sooner Than the City Council Can Get Funds Together [EATX]