Crowdfunding Austin Music Venues

Mayor Adler announces new mini-bond plan to preserve at-risk venues

On Thursday morning, Mayor Steve Adler took to the dais and announced plans to utilize a new mini-bond program to preserve local live music venues. His hope is to crowd-source a $10 million fund and use it to purchase select properties, protecting them from the rent increases we’ve seen plague Austin clubs in recent years.

Mayor Steve Adler at the 2015 Austin Music Industry Awards (Photo by David Brenden Hall)

The proposal comes as a result of Austin being named one of five cities to win assistance from public finance company Neighborly. The San Francisco-based online investment endeavor sought for its Neighborly Bond Challenge to engage municipal agencies interested in offering their communities investment opportunities in local projects. Austin winning essentially means it gets to use Neighborly’s bond-selling platform for free.

Adler noted that the campaign includes technical, legal, administrative, and marketing services. Mini-bonds are a form of financing that allows companies or public entities to source-fund through a diverse array of investors instead of borrowing from banks. Investors receive regular interest payments.

The mayor called the concept of applying the model to saving music venues “a creative solution for the creative class.” He also stressed that the project comes at no risk to taxpayers, nor is it funded by the government.

“This is going to give us in Austin the support and opportunity to try something that’s never been tried anywhere else,” he said.

Shortly after the announcement, “Playback” sat down with Adler’s Communications Director Jason Stanford to discuss how the mini-bonds will work toward preserving Austin’s live music destinations.

Austin Chronicle: Explain specifically how this program can be applied to venues?

Jason Stanford: The mayor would want me to point out that the details haven’t been worked out yet. We still have to figure out how it’s going to be guaranteed, how much each bond is going to cost, and what the return is going to be.

Say you’re going to buy one of these bonds for $500. The market has a certain return on bonds. This one will probably be less because it’s what’s called a socially responsible investment. Meaning you’re doing it for not just the money, but rather to achieve a certain policy outcome.

In this case, it’s to preserve music venues.

One way it’s been suggested it could work is to buy these properties and hold them in a land trust. In effect, it would be a lot like permanently affordable housing. The value of the land would be kept artificially low by the owner, which would be this bond, so the rent wouldn’t keep going up, and these guys wouldn’t be forced out of business.

AC: At the time this might be put into application, how are you going to let the public know? Are you going to issue an announcement saying, “Help us buy the Hole in the Wall?”

JS: No. You wouldn’t buy a bond to specifically save the Hole in the Wall. You’d buy a bond to save music venues. Everyone’s going to invest in this. They don’t have to, but this is going to be pretty popular. People are going to say, “Hell yeah, I’ll invest in this,” because you’re going to get some money back.

It’s a pretty safe investment. It’s not wildly speculative. So when you buy the bond, you won’t be buying for a specific club. You’ll be buying for the cause. This will create an investment vehicle that will find the best way to preserve the affordability of these music venues.

Now they might not buy them. They might be co-investing – all those details haven’t been worked out – but the goal is permanent affordability for music venues. Not all of them, certain ones, so there’s going to be choices that have to be made.

AC: Will your office make those decisions?

JS: No, the mayor’s not going to be sitting around saying “White Horse, but not Barracuda!” It’s going to be some sort of board, a group of people who are qualified to make these decisions in a professional way. There might be people in government on the board, but it won’t be a government board. It’ll be a board administering this bond.

So we’re going to have to figure out who chooses which music venues to get it. This is intended to preserve our iconic venues: Broken Spoke comes to mind, Hole in the Wall is always going out of business, back in the day the Armadillo World Headquarters would have been the thing that we’d want to preserve. Liberty Lunch is obviously a different case because it was city owned.

This creates an investment vehicle and then there would be a process to determine which of the music clubs we can’t afford to lose.

AC: Is there any sense right now of when this could be established?

JS: We want to move very, very quickly obviously, but today is the first day when Neighborly said it’s going to be possible to figure out if we can. We have to figure out a lot of details, so it’s going to be a few months before people have a chance to buy the bonds.

AC: Do you know of any other municipalities using this in a music capacity?

JS: No, I don’t know of any other cities that have mini-bond programs, but usually they were parts of big municipal bonds. You know, how we have the big $720 million mobility bond coming up. Most cities have used this mini-bond idea to say, “You can invest in this big bond,” not as part of the election, but as they periodically sell bonds.

Denver said, “Okay we have $12 million to sell, we’re going to reserve $1 million of that so regular folks – the people of Denver, instead of Wall Street – can buy it.” It sold out in less than an hour. This is the first time it’s been done for something this cool.

A note to readers: Bold and uncensored, The Austin Chronicle has been Austin’s independent news source for over 40 years, expressing the community’s political and environmental concerns and supporting its active cultural scene. Now more than ever, we need your support to continue supplying Austin with independent, free press. If real news is important to you, please consider making a donation of $5, $10 or whatever you can afford, to help keep our journalism on stands.

Support the Chronicle  

More Omnibus Resolution
Rio Rita Moves to Badlands
Rio Rita Moves to Badlands
Was Chicon venue pushed, or did they jump?

Richard Whittaker, Sept. 16, 2016

Save Our Spaces March:
Save Our Spaces March: "Give Us the Keys!"
Creative Alliance leads artists on a second line down Second

Robert Faires, Sept. 15, 2016

More by Kevin Curtin
Listen to This: David Beck Breaks Down Bloom & Fade
Listen to This: David Beck Breaks Down Bloom & Fade
Family ties and looking at life, track-by-track

Sept. 22, 2022

Crucial Concerts for the Coming Week
Crucial Concerts for the Coming Week
Carrie Rodriguez's Laboratorio, itchy-O, Fontaines D.C., Ash Lauryn, Nas & Wu-Tang, and more

Sept. 23, 2022


Omnibus Resolution, Neighborly, Steve Adler, Jason Stanford, Broken Spoke, Hole in the Wall, White Horse, Barracuda

One click gets you all the newsletters listed below

Breaking news, arts coverage, and daily events

Can't keep up with happenings around town? We can help.

Austin's queerest news and events

Eric Goodman's Austin FC column, other soccer news

Behind the scenes at The Austin Chronicle

Information is power. Support the free press, so we can support Austin.   Support the Chronicle