Prime Time Irony?
The Future of Liberty Lunch
By Louisa C. Brinsmade, Fri., Jan. 30, 1998
This activity seems born out of Mayor Kirk Watson's proclivity for city planning and citizen input. Watson is interested in extensive new downtown residential development deals for city land, all of it near Liberty Lunch. The push is on, then, to quickly determine what to do with the rest of the city's downtown property - in particular the lot upon which Liberty Lunch stands.
As a result, Pratz and his partner J'net Ward were told during recent negotiations with the city over the renewal of their five-year lease that a clause allowing the city to evict them at any time with six months notice would probably go into effect during the next two years.
When Pratz and Ward took over Liberty Lunch in 1993, following a long history as employees under the previous management, they delivered on a promise they made to their landlord and to themselves: They remodeled the bare, broken-down building into a modern indoor/outdoor venue, replacing the roof with actual salvage from the famous Armadillo World Headquarters, and thereby completing physically what has been felt spiritually since the Armadillo was torn down in 1981 - that Liberty Lunch carries the torch of this town's live music culture and live-and-let-live sensibilities. Liberty Lunch embodies the very soul of Austin - loud, live, and homegrown - enjoying the kind of public support reserved for the best of Austin's music institutions: the Armadillo, Soap Creek Saloon, and Antone's. For such an unassuming venue born out of a gutted warehouse, Liberty Lunch has public support for its plight as a mere short-term lease holder with a six-month eviction clause - citizen protest over its destruction tends to knock the wind out of any new city plan, which, until just recently, included public buildings on the site, such as a convention center, city hall, or even a city hall/retail "mall." Those "master plans" for the acreage failed in part because the public process itself includes some serious deal-killers. Democracy, for one. Standards like city council discussion, bid-taking, citizen input gathering, and bond votes often take upwards of a year before even preliminary approvals for a project go through. That lengthy process, which ensures fair bidding and public approval before the expenditure of public funds, did nothing to help the city compete as a developer in Austin's real estate market.
Which begs the question of whether the city should pose as a developer at all - a question that the present city council might at this point answer with a resounding shrug. Because finally, after 10 years of wondering how to sell expensive public projects for this land to the public, this city council finally decided to go private with the whole issue, starting a city block east of Liberty Lunch, on Second Street between Lavaca and Colorado.
The city is currently negotiating a lease agreement with a Chicago development firm called AMLI eager to build residential apartments on that block. The normal bidding process to acquire city land is not required under lease conditions, according to Assistant City Manager Jim Smith, who oversees all downtown issues. Apparently, the council jumped on the coattails of development plans already in progress between entrepreneur John Wooley, who owns an entire block across the street from city property, and AMLI. Wooley signed a letter of intent, giving the Chicago firm exclusive rights to investigate the development of his property and come up with a price.
Smith says the city had no previous development plans for city acreage down there, aside from a general consensus among city staff and council that residential housing was a good idea for downtown revitalization. His senior city planner for the downtown area, Mike Knox, says the city had to make some quick decisions about the block upon finding out about Wooley's plan. "We approached them and said we have an interest in doing downtown residential," says Knox. "Now, we're looking at co-developing the land in a public/private partnership with AMLI."
And apparently, the city is close to sealing the deal. "We are getting close to signing a letter of intent to begin negotiations between us and AMLI," says Knox. Asked what was attractive about a piggyback deal with Wooley and AMLI, Knox explains that "some economies of scale can occur if we can do the two residential projects at the same time. We can have joint facilities, such as a shared leasing office and health club."
As for the city's return on the investment, Knox has no figures yet, but as part of any lease agreement, he says, the city will share in the profits. "Naturally, we'll be receiving funds in exchange for the lease, and we'll get a certain percentage of AMLI's revenue."
Leasing is perhaps the wave of the future for Austin. A similar arrangement is in the works for the Pole Yard blocks behind the Seaholm electric substation - just a stone's throw from the Electric Lounge. The city is currently negotiating another residential development/lease plan with Post-West Properties from Dallas on those two blocks. As an ironic aside, it should also be noted that the city is working on expanding the convention center at San Jacinto and Third Street. One thing stands in the way of that, however: the Railyard Apartments, a popular downtown residential spot that was at Fourth and San Jacinto 10 years before the convention center was even a gleam in the city's eye. What will the city, now the great downtown residential benefactor, do about this conflict of interest? Tear down the portion of the Railyard Apartments that's in the way, of course. In any case, the sweetness of these lease deals, for all parties, is so tasty it's questionable the city will be able to resist a similar public/private venture on its much-sought-after lakeview property. What's to stop them? Leasing cuts out all that nasty public process bureaucracy that's tied the property in knots for years, and negotiations can begin with anyone the city chooses - with little notice, and no competitive bidding. Plus, the city is adding much-needed cash flow to the general fund in the form of lease payments. And the reality is, the city could end up being far more competitive with its valuable property than ever before. Knox agrees that this AMLI arrangement is attractive so far, and that leasing the rest of the city's property, particularly on the two blocks that house city council chambers, Liberty Lunch, and the historical Schneider building next door to Liberty Lunch, is definitely a possibility.
In fact, the AMLI deal created a palpable momentum toward developing the rest of the city property. During negotiations over the Liberty Lunch lease, Smith says he asked the city's Real Estate department to arrange for a "reasonable amount of time to give the council a chance to put out an RFQ [request for queries] or RFP [request for proposals] on those lots."
So, what is a "reasonable" amount of time? Smith says he left that up to the Real Estate division to determine. For its part, the Real Estate division was reluctant to give out any details, and the lease agreement has not yet been released. But Pratz confirms that Liberty Lunch was given a similar lease as in the past: five years, with the normal clause that states the city is allowed to evict the club at any time if Liberty Lunch is in conflict with development plans on the site.
"We've always had that clause," says Pratz, "and we've always been given a five-year lease, with five-year renewable options, but this year, [the Real Estate division] told me that we wouldn't get near the five-year renewable again, and that we probably wouldn't be allowed to stay longer than another two years."
"Liberty Lunch has always been a sticking point," admits Senior Planner Knox, "in that it would be torn down. Yes, it could be incorporated into whatever we do with the lot, and there's a lot of possibilities. I just don't know, and I don't want to speculate. That site is in the path of development which is spreading in that direction. There's a possibility that it would have to relocate, or it could stay and be incorporated. And there's the possibility that nothing will happen for a long time."
The Cedar Door, by the way, was once in the path of similar development - the convention center - and it was given public funds to help relocate the entire building to its current site at Lamar Boulevard and Cesar Chavez. If given the funds to relocate, would Pratz and Ward move Liberty Lunch to another site? Pratz just smiles and looks at Ward. He's just explained that no matter what happens with his club, he's headed for steadier waters in a new career as an education administrator. He's just finished his degree and is looking for a position as an assistant principal in the public school system.
"I've always known that I only had one or two more years with this club, so I've prepared myself for another career," he laughs. He says he's ready to make that change now. That means Ward will be left to decide the future of Liberty Lunch. She's cautious in her answer, in part because she's always been the silent partner, but also because the future is so unclear.
"It takes a lot of money to relocate," says Ward, "and we've sunk a lot of what we had into this location already... I'd move, if possible, because I've always enjoyed challenges, but I believe I can work with the city in keeping Liberty Lunch a viable operation the city can be proud of."
The whole situation with Liberty Lunch makes Austin Music Hall and La Zona Rosa owner Tim O'Connor very nervous. "It's an unfortunate situation, and it's going to be tough for them. I fear the same for myself. We lease some parking space near the Austin Music Hall from the city. It's a year-long lease, and it wouldn't be the end of the world if we lost it, but it might hurt us if they put residential there." For O'Connor, whose clubs on Third (Music Hall) and Fourth (La Zona Rosa) and Nueces, along with Liberty Lunch and the Electric Lounge on Bowie, form the westernmost border of the warehouse district. It's the West End's own "music district," which so far is free of conflict with neighborhoods - a conflict keenly felt by club owners on Sixth Street most recently with the sound ordinance controversy.
O'Connor sees the area as a burgeoning club and commercial center, where growth could include diverse arts and retail outlets to complement the night scene already there. Pratz and Ward share his vision, but so far the three stand alone in what is quickly becoming an unstoppable wave of downtown redevelopment enthusiasm that seems hell-bent on throwing up sweeping tracts of residential apartment complexes all over the western border of the district. All the residential deals being cut right now, says O'Connor and Pratz, are in direct opposition to what is already happening there with their clubs and with the rest of the West End.
And yet, it's also the area most discussed by all those scribbling architects planning Austin's downtown future. One such architect, Matt Kreisle, heads up the Heritage Austin Program, which was just awarded $90,000 by the city council to continue his ongoing plan to come up with a downtown redevelopment plan. His group is looking intently at the warehouse district as a home for downtown residential, in part because much of the land is underutilized or completely undeveloped - which is precisely the reason O'Connor, Pratz, and Ward felt so comfortable locating live music venues there.
Kreisle is a key architect with Page Southerland Page, which designed the Austin Convention Center, and as a consequence, Kriesle wants to focus downtown on the Capitol building, the convention center, and on the future city hall, the site of which is discussed for a city-owned block north of Second Street between Lavaca and Guadalupe. Kriesle denies having any plans in mind for the Liberty Lunch and Schneider Building site.
"We haven't even gotten that far," he explains. "We're in the stage of just trying to get our office open later this month." The Heritage Austin Program is planning to operate out of a Congress Avenue storefront to gather more public input for any final development plan to present to the city council. "As a general statement, however, I don't think it's a problem having clubs and residential mix in the same area. But I'm not saying that we've recommended any land uses in that area at this point. We do, however, want to encourage a broad range of uses, from residential to retail and arts outlets."
And yet, for O'Connor, Pratz, and Ward, even the Heritage Austin Program's preliminary vision plans don't include them. According to them, at a public session offered by the downtown redevelopment group six months ago at Page Southerland Page offices, Kreisle displayed drawings of downtown, several of which displayed broad tracts of land west of Liberty Lunch, and surrounding the Austin Music Hall and La Zona Rosa that were marked "Residential." In fact, says Pratz, Liberty Lunch wasn't even displayed on the map.
"They had already done away with us," he laughs.
O'Connor says he addressed Kreisle during that session about his concern that so much residential in what is already a burgeoning music district would probably cause quite a lot of future noise conflict. And what about the fact that all this new development would price established businesses out of the market? Kreisle recalls the conversation, and says he reassured O'Connor that "one reason to do planning is to see those type of cultural things survive, to help them succeed through diversity of living. I told him we needed to talk about how you maintain the affordability of Austin now, before it happens."
O'Connor was not appeased.
"We certainly support growth and re-urbanization," he says. "Our only thing is, that it doesn't appear we have a voice. We go down into an area that has been totally forgotten, and we put lots of years of experience and dollars and people to work and fight the element of decay, and we turn that area around. Not single-handedly, but with lots of people. Then, without any consultation or way of communication that bears fruit, they stick other elements that fly in the face of what's already there. For instance, why would you put housing right next to live music when we have Sixth Street, where we have noise issues already?
"Someone is going to fail under the banner of mixed-use," O'Connor concludes. "That's my concern, and that there be some way to communicate and really be heard and have a vote."
In response, Kreisle says he would "love to put together a group of music entrepreneurs from Austin to sit in and get involved with this project. We'd like to see them succeed in the area, because entertainment is critical to Austin's economy."
Asked about Liberty Lunch's future, Councilmember Jackie Goodman says she is well aware of the value of the land that the club sits on, but doesn't know where all the rumors about the club's closing are coming from. "I keep saying, `Who told you this?'" says Goodman. "We've got to keep Liberty Lunch and we have to keep the historic building on the corner, otherwise I'm not going to go for it."
Goodman admits that she does worry about Liberty Lunch's future if she and the other liberals are voted out of office in May 1999. Meanwhile, the mayor himself, talking about how Austin doesn't always have to opt for the "highest and best" use for its property, had this to say when asked about the future of Liberty Lunch. "Liberty Lunch is a classic example," says Watson. "If we have a strict policy guideline of dollars, there ain't no Liberty Lunch."
For Pratz, having Liberty Lunch planned right out of existence is a burden he's lived with for years, and he's positive it's only going to get tougher. "I used to get anxious and uptight about this, and maybe I've been beaten down to the point where I'm grateful the City of Austin has let us go on for so long on this site. I've also realized it's hard to stop the wheels of progress, but the problem is, we'll just be the first to go, and then the rest of the area will follow."
O'Connor understands that point, and realizes that it's important to gather forces and do a lot of preliminary support-building. He's planning a meeting with the mayor, and he's considering the fact that putting together a coalition with other clubowners like Pratz and Ward is important to making their case to the council, to Kreisle, and to the public.
"We want some kind of parity," he says. "We want it so that whatever they plan to develop doesn't put us out of business, and that we have some input into the matter. If we don't have a voice, then at the least we should have a damn good lawyer..."