FEATURED CONTENT
 

news

Then There's This: Even More Reason to Buy Local

City may reinstate indie biz group's funding after breaking contract

By Amy Smith, Fri., Aug. 23, 2013

Then There's This: Even More Reason to Buy Local

In the larger scheme of a city budget, $60,800 to help market Austin's local business community is chump change compared to the millions the city doles out each year in economic development incentives. Next year, for example, the city is projected to spend $17.6 million in economic incentives, up from $10.8 million in the 2012-2013 budget year.

Against this backdrop of big-money giveaways, the Austin Independent Business Alliance has spent most of this year in a quiet wrangle with staff over the city's decision to torpedo the group's five-year funding contract just seven months before it was set to expire. Now, after a good deal of negotiations, followed by a flurry of letters from local business owners to Council members last week, the wayward conflict may finally be resolved today (Aug. 22) pending a Council vote.

Council is expected to approve restoration of AIBA's funding in the form of a new nine-month contract for $50,000 to help manage and support eight specially designated IBIZ districts – shorthand for Independent Busi­ness Investment Zones. The funding is already budgeted in the city's 2012-2013 fiscal package and does not require digging around for more dollars to add to the 2014 till. Council Member Laura Morrison, who has also spent the better part of the year trying to negotiate a resolution on this matter, is sponsoring the measure along with CM Bill Spelman.

AIBA was in its fifth and final year of an agreement that was due to end on a positive note in September. Instead, the city's Small Business Development Program pulled the plug early, without providing AIBA with a contractually required 30-day notice. According to AIBA Executive Director Rebecca Melan­çon, a representative of the city's SBDP notified her in April that their contract had been canceled in February. That explained why AIBA had not received outstanding reimbursements for marketing expenditures, but the sudden breakup caught Melançon and her board flat-footed. Where would they get the funds to cover their marketing and outreach expenses?

By most accounts, the reasons for the annulment seem extraordinarily petty and apparently stem from a control issue over the commercial success of the group's eight IBIZ districts, which AIBA launched in 2004. The city began its partnership with the IBIZ endeavor in 2008, starting with a $64,000 boost, which was later cut to $60,800 as part of a citywide belt-tightening during the downturn. The IBIZ districts include the following areas: North Drag (Guadalupe from 29th to 32nd streets); East End (East 11th from I-35 to Nava­sota), South Lamar (from Goodrich to Oltorf), North Loop (from Avenue F to Chesterfield), South First (from Barton Springs Road to Oltorf), West Lynn (from Sixth to 13th streets), East Sixth (from I-35 to Comal), and Lo-Burn (Burnet Road from 45th to North Loop).

Looking back in time, the first clue of a break in relations between AIBA and SBDP came in the fall of 2011, when the IBIZ district concept won an award from the Interna­tional Economic Development Council. City economic development officials trumpeted the award in a press release – with no mention of AIBA as the creator of IBIZ – and then trotted out to North Carolina to received the award at the international group's annual conference. Shortly thereafter, AIBA obtained a registered trademark for IBIZ.

New Demands

Melançon said that late last year, a month after signing the 2012-2013 funding contract, SBDP put forth several new requirements for the indie group to fulfill, including: developing a communication plan for informing IBIZ district members about SBDP's role in supporting the districts, submitting marketing materials to SBDP for approval before distribution, providing SBDP representatives a guided tour of each IBIZ district for introductions to the businesses, and providing SBDP with email addresses for business owners in each IBIZ district. AIBA agreed to comply with most of the requirements, but since releasing member email addresses would have been a violation of AIBA privacy policy, Melançon and the board instead suggested that SBDP use each district's listserv addresses to locate the businesses. That wasn't sufficient for SBDP (which later clarified that it had only sought email addresses for members in three IBIZ districts – West Lynn, East Sixth, and Lo-Burn; Melan­çon says that's irrelevant).

Once it was clear that AIBA couldn't achieve resolution on its own, Melançon asked CM Morrison for help. Morrison said an Aug. 5 letter from the city law department convinced her that there was no legal mechanism for reinstating the original AIBA contract because it had already been canceled. That's when she decided to move forward with a new contract. "Hopefully this will get things back on track," Morrison said.

Assuming the new agreement wins approval at Council, that still leaves the question of whether AIBA and SBDP will be able to patch up their marriage – at least for the next nine months of the contract.

share
print
write a letter