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Austin Restaurants Need Financial Relief Sooner Than the City Council Can Get Funds Together

A resolution to look for funds to provide support has been passed, but it’s no guarantee of financial relief

Casey’s New Orleans Snowballs
Mars Chapman, the owner of Casey’s New Orleans Snowballs, shared that the frozen sweets stand is “in danger of disappearing” because of the COVID-19 pandemic
Casey’s New Orleans Snowballs/Facebook
Nadia Chaudhury is the editor of Eater Austin covering food and pop culture, as well as a photographer, writer, and frequent panel moderator and podcast guest.

Austin restaurants, bars, and live music venues need money from the city in order to ride out the pandemic. On September 17, the Austin City Council approved a potential solution — agenda item 62, or Save Austin’s Vital Economic Sectors (SAVES) — wherein City Manager Spencer Cronk will allot funding from the budget to help the industries and businesses struggling most with the fallout from COVID-19. These include restaurants (which can currently stay open with 75 percent indoor dining capacity), bars (which have to remain closed, but can reopen with new food-related permitting), live music and arts venues, and child care businesses.

This approval, though, is just the first part. Now the city manager will have to figure out where the funding will come from within the city’s budget. Small-business advocacy nonprofit Good Work Austin proposes using the money slated for the Austin Convention Center expansion; Council Member Kathie Tovo wants to explore using various downtown permitting and business-related fees. The council is meeting again October 1 to discuss these options.

During the city council meeting, several Austin restaurant owners, bar owners, venue owners, and artists shared their stories about why they need assistance. Many are struggling to earn a profit and maintain staff while adhering to strict safety measures that aren’t conducive to bustling business.

Mars Chapman, the owner of North Loop sno-ball stand Casey’s New Orleans Snowballs, is only accepting online orders; sales are down by 55 percent compared to last year and he had to reduce his team by 10 people. “Casey’s is an Austin institution in a shoddy little wood building in a changing neighborhood,” he said during the meeting, “and because of the fiscal strain of COVID-19, we are in danger of disappearing.”

Jodi Mozeika, the business team leader of Crestview brewpub Black Star Co-op, echoed Chapman’s position: “We recognize that continuing to operate without assistance will have short- to long-term consequences not just for Black Star, but for the cultural integrity of the city.”

If small businesses like Casey’s and Black Star end up closing, Austin will lose a major component of what makes it distinctive. Its unofficial motto is, after all, “Keep Austin Weird,” a sentiment that, while commercialized, still reflects the independent spirit of the city: one where freewheeling people and businesses make a go at whatever it is that they want to do, and where small independent operators, as opposed to, say, another national chain, are given opportunities to thrive. It’s what makes the city attractive to locals, tourists, and potential residents.

During the meeting, Brian Stubbs, owner of hospitality industry services Genuine Article Bookkeeping and Consulting and a member of Good Work Austin, shared financial information from his clients that depicted just how crucial these funds are for the survival of these businesses.

Among Stubbs’s 45 clients, there has been a 46 percent reduction in the number of employees from January to September based on payroll, despite all receiving Paycheck Protection Program loans. His clients made over $20 million in sales during the second quarter of 2019, but these numbers have diminished by 55 percent during the same quarter this year. Average monthly rent is $10,000 for his clients.

The patio at Black Star Co-op
The patio at Black Star Co-op
Black Star Co-op/Facebook

In order to stay operational, Stubbs’s clients have had to lay off employees, cut wages, and completely shift or rewrite their business models. The Paycheck Protection Program funding “will be exhausted by the end of this month,” he says.

Without any relief, “one-third of small businesses say they will be out of cash reserves by the end of the year,” Adam Orman, a Good Works Austin founder and the general manager of Mueller Italian restaurant L’Oca d’Oro, tells Eater.

To help substantially support Austin’s small businesses, Good Works Austin proposed the creation of a $75 million fund. “We have zeroed in on this amount to determine need and urgency,” Orman said. “The goal is to reach as many locally owned establishments as possible,” emphasizing restaurants that haven’t received previous aid and BIPOC-owned businesses.

Good Works Austin has determined that the proposed $75 million would cover 1,500 businesses with an average grant/low-interest loan of $50,000 (some businesses would receive smaller amounts around $30,000; others would receive larger ones, depending on specific operational needs). This would help these companies survive for several months, ideally from October 2020 through February 2021. The amount was determined based on the average difference of sales losses from quarter two in 2019 to 2020.

Without any relief on the horizon, it’s hard for restaurant owners to plan for the future when it comes to reopening, expanding dining rooms, and even rehiring staff, “because they don’t want to promise something they can’t deliver,” Stubbs says. The pandemic is ever-changing and unpredictable; a potential surge in cases might lead to another shutdown, which would be even more costly.

The Austin Convention Center
The Austin Convention Center
Austin Convention Center/Facebook

Good Works Austin is also aware of of the need to make sure that the funds help everyone. There will be various conditions that establish which businesses get grants and which receive loans; this way, businesses that couldn’t feasibly deal with acquiring debt wouldn’t have to. The nonprofit especially wants to make sure that the city prioritizes giving grants to businesses that didn’t receive any sort of government funding in the first place, while also taking into consideration BIPOC ownership, historical value, and longevity.

That’s because these two categories, the ones that didn’t receive government relief and ons run by BIPOC, tend to overlap, as Orman points out: Businesses that don’t usually receive aid are often those that are BIPOC-owned or -run. He acknowledged that the city is a “segregated restaurant community,” where restaurants exist in factions, and the ones that receive help and attention are the ones that know how to work the system. These businesses often don’t reflect the diverse communities — including those that are traditionally Latinx, Black, and Asian — that exist in the city.

To aid in those diversity outreach efforts, Good Works Austin joined various chambers of commerce across the city to raise awareness of its work, but Orman knows it will take further action: “We’re not going to bridge decades of obstacles in four months.” It’s not an easy or quick fix because these communities have been systematically marginalized for quite some time, well before the pandemic hit.

Now that the resolution has been approved, though, Good Works Austin is calling attention to what it believes is an obvious source for money: the Austin Convention Center expansion. “There is no other bucket or trough that is that significant,” says Orman. The expansion was discussed during the same meeting, and will proceed into the negotiation phase. Austin Monitor reports that the city will begin with a fund of $6.3 million with the goal of buying up two blocks down Trinity Street.

A question lingers, though, about why the city is investing in the convention center when small businesses across Austin are in danger of closing. If these businesses disappear, Austin loses its very Austinness. The end goal of a revamped convention center is to attract major conferences, trade shows, and festivals, and bring out-of-towners who spend money to the city, thereby injecting funds into the local economy. If chain restaurants outnumber small independent eateries, Austin isn’t a culinary destination anymore. If the city doesn’t have a wide range of live music venues, it can’t remain the live music capital of the world.

The city’s priority should be ensuring that Austin’s independent businesses stay viable before embarking on a long-term project to expand the convention center. But Good Works Austin members don’t believe the convention center expansion should be nixed completely — just that the plan should be paused. By offering loans as part of its proposed $75 million fund, Good Works Austin says that the collected interest could go back into a future convention center expansion fund during a time when the city’s small businesses are safe.

Likewise, Austin music venues are in danger of shutting down permanently, and many already have, from Barracuda to the North Door to Shady Grove to Threadgill’s. A staggering 90 percent of Austin live venues will probably close permanently this fall, according to a July survey conducted by the Austin Chamber of Commerce with the Central Texas Business Task Force.

Advocating for this community is Jeanette Gregor, who helped organize a rally for the live music community. on Wednesday, September 16, ahead of the council meeting. The rally was attended by people involved in all facets of the live events industry: bartenders, venue owners, sound engineers, and musicians among them. Gregor works in music festival and event production and is a bartender at Red River music venue the Mohawk.

“In the live music capital of the world, the city council and the mayor have this opportunity now to lead by example,” tells Gregor, “and say, ‘We value our artistic community’ — which is overwhelming in the music sector — and, ‘We want to retain that because that is part of our identity.’ We haven’t seen that yet.” They’re asking for a fund dedicated to the city’s live music industry.

During the city council meeting, John Ables, the owner of South Lamar bar and venue Saxon Pub, shared that he didn’t receive any of the grants he applied for. “I assumed that all of the true music venues in the city were going to get some help,” he said during the meeting, “but that didn’t happen. There wasn’t enough money to go around. But there should have been enough money to go around, you would think.”

As with independent restaurants and bars, if Austin’s music venues disappear, the city will lose its other moniker — the “Live Music Capital of the World,” referring to the strong music scene and high number of venues. “If the City of Austin does not act now to save our venues,” musician Zack Morgan said during the meeting, “then the worldwide appeal of Austin will be destroyed, and the live music capital of the world will become the abandoned music venue capital of the world.”

The loss of bars and music venues affects the livelihoods of the people and families that keep those businesses running. Compounding this difficulty is the fact that earnings for those in the live music and events industry aren’t as steady as in other fields. “We’re a messy financial industry,” Gregor says, citing how the live music and events industry often runs based on contract work and tipped minimum wages, a dynamic that affects how much unemployment people receive. “The desperation for any kind of funding within that is very real and very critical.”

One of the numerous signs during the Come and Save It rally at Austin City Hall
One of the numerous signs during the Come and Save It rally at Austin City Hall
Cris Casper/#ComeAndSaveIt Rally for the SAVES Resolution/Facebook

But Gregor doesn’t want the city to rush to reopen music venues amid the pandemic, either. She says that Austin should better address the very real public health and safety issues involved with running live events and music venues. Venues have to stay closed for the public good, and these businesses are “carrying that responsibility and that sacrifice of making sure people are safe,” she says.

“I don’t want Mohawk to open back up,” she continues, “because I don’t want 1,000 people smooshed into one area, because there’s a pandemic and people are going to get sick.”

It’s because of that uncertainty over when venues can and should reopen safely, and when concerts and big events can and should happen again, that the city government should provide relief to tide over these businesses. “We’re hoping that the city really does concentrate on the sustainability of our industry,” Gregor says, “which is by giving it direct funding.”

Gregor is also working on building out a mental health coalition to help those in the live music industry impacted by the pandemic. “Not knowing if you have a place to go back to work,” she says, “is the most terrifying aspect of all of it.”

It’s crucial that Austin’s small businesses — the restaurants, bars, and music venues that help shape the city’s identity — remain open. And it’s now up to the city government to save them with a major influx of money, especially during a time when businesses can’t operate in normal ways due to public health and safety concerns. The funding needs to be substantial, the process to access these funds needs to be easy, and the criteria for acceptance needs to be transparent and fair.

If not, these restaurants, these bars, and these music venues will have to close, one after another, as is already happening. If that occurs, it would forever change the identity of the city. Austin, in effect, will lose the charm of being Austin.

Post-punk band Priests performed at the Mohawk during SXSW in 2019
Post-punk band Priests performed at the Mohawk during SXSW in 2019
Travis P Ball/Getty Images for SXSW