Event Horizon

Chris Richards is the pop music critic for the Washington Post. For the past four springs, his gig ushered him south into the warm civic embrace Austin offers its South by Southwest guests. Like all major event attendees, Richards brings with him the prospect of patronizing local businesses, amplifying city and state sales taxes, and other ancillary coffer-filling actions. As a respected cultural critic, he also brings his laptop – and the prospect of securing for the city a hefty portion of the valuable but impossible-to-quantify hipness market: Through SXSW, Austin City Limits, Formula One, and other such events, Austin has made itself into a cross-genre cultural mecca; the place to hold your special event.

(Full disclosure: Richards and I go way back, but not quite as far as South by Southwest and the Chronicle.)

In one of Richards' dispatches from this year's Festival, he took a minute to write about what may be a worrying trend for the most popular portion of SXSW. "More than 2,000 acts have swarmed Austin for this six-night musical feeding frenzy, all hoping to touch the grail of buzz, even if that means playing over it," he wrote. "This year, newcomers and nobodies are trying to lure ears from Prince and Justin Timberlake, two galactic pop stars expected to materialize in Austin for cred-grabby concerts on Saturday night."

Two days later, Richards returned to that theme. "Thousands arrived in Austin last week seeking moments of spontaneous sonic combustion ... but quickly found themselves in a city that had pitted pop stars against peons," he wrote. "Like so many energy drink and snack food brands before them, Depeche Mode, Smashing Pumpkins, Green Day, Iggy Pop and other marquee names had all come to town to leech some cred from America's most vibrant music festival, which drew more than 2,000 acts this year."

Thus the happy, if intractable, problem for the city of Austin: With staff calling for more resources to handle special events, especially SXSW, and those events seeming to grow every year, Austin, say the people who work the events, is approaching the point at which – like Red Adair at a runaway gusher – the city has to gingerly cap what is becoming an uncontrolled explosion.

Gingerly is the operative word. As implied by Richards' words and position, the cultural relevance – and thus, survival – of SXSW, ACL, and every other ATX-bound attempt to make and define taste depends to some degree on everyone's ability to convince the world that Austin remains the place to be. Too much pressure from the city over SXSW and the event could lose some of the spontaneity that makes it what it is.

Yet the city can't simply do nothing, hoping that spontaneity and controlled chaos lead inexorably to more tax dollars; at a minimum, there are public safety concerns. And lurking underneath it all is a basic set of numbers: There are only so many streets to close, only so many lanes of traffic to divert – only so far east that an event can creep.

Come, Spend, Leave

"Austin: Live Music Capital of the World" is a mantra chanted from City Council and Chamber of Commerce offices, reinforced by everything from airport signs that welcome visitors to Austin to the subhead of the website for the Austin Convention and Visitors Bureau. "What you hear," puns the ACVB site, "is true." The mantra's embodiment has produced a massive and expanding entertainment district that may be civic gold, but also threatens to oversaturate the sensitive neighborhood ears of longtime residents.

Rodney Gonzales is deputy director of the city's Economic Growth and Redevel­op­ment Services Office. He points to the significant growth of the city's population over recent years. "We've had a lot of in-migration," he says. "In-migration plays a large part in the increase we've seen in festival attendance." When people move to the city, they want to show off their new civic digs to friends and family back home, and they want the city to be at its best. The city is frequently at its best – at least so far as stuff to do is concerned – when there's a festival in town.

SXSW brand development honcho Brad Spies has his own, SXSW-informed take on all of this. "Austin has been an events hub for a long time – Aquafest, Eeyore's, the ROT [Republic of Texas] Biker Rally, UT football, Pecan Street – it's been this way for a while," he writes in an email. "ACL, F1, Fun Fun Fun Fest, Pachanga, Chaos in Tejas, SXSW, Psych Fest, Food & Wine ... have just made it more so. But SXSW was the first Austin-based event to attract attendees and media from around the country and around the world. Lots of those folks got their first inkling of Austin's potential at SXSW."

In a 2012 study, resident economist Jon Hockenyos considered the growth of the creative sector between 2005 and 2010. In the economic equivalent of putting a photo of Sixth Street during SXSW '06 next to one taken this year, the change is dramatic. "The role of the creative sector in Austin's economy has grown substantially, accounting in 2010 for just over $4.35 billion in economic activity (about one-third more than the revised baseline figure for 2005), over $71 million in city tax revenues, and almost 49,000 jobs," he wrote. "To put these results in context, the creative sector (as measured by employment) has risen by about 25% over the past five years, a pace more rapid than the 10% growth for the local economy as a whole."

Hockenyos also looks specifically at music tourism – the rough category of major music festivals. "About a third of the economic impact (and more than half the city tax revenue generated) of the creative sector," he calculates, "is attributable to tourism."

ACVB spokesperson Shilpa Bakre offers another impressive set of figures, putting the overall economic impact of SXSW 2012 at $190 million. ACL, she says, came in at $102 million that year – a number she says could theoretically double with the addition of a second weekend. (No economic impact numbers are yet available for the 2012 F1 race, though a postmortem report produced by the city of Austin touted "global media coverage" valued at $191.2 million, and an "advertising value equivalent" of $150.9 million from the branding stuck to the race cars themselves.)

The numbers are, of course, meant to illustrate Austin's grandeur, and they may be generous – but they're not a simple calculation. Bakre noted that, though events are a major economic driver for the city, "it is hard to narrow down how much of the economy is driven by tourism/visitors, and how much locals contribute during major events. ... Visitors do travel here for major events like SXSW and ACL, but not necessarily for smaller festivals like Pecan Street."

For civic entities, tourist dollars are the best dollars. Although there are plenty of short-term public expenditures associated with big events, visitors generously drop gobs of cash on local businesses while requiring a fraction of the sort of municipal investment required of full-time residents. They come, they spend, they leave.

SXSW alone, says Spies, is responsible for a raft of financial benefits. "SXSW is positioned to bring in over a billion dollars in revenue and income for Austin businesses and individuals over the next five years. That translates into many tens of millions in tax dollars for the city and state each year – sales tax, HOT [hotel occupancy tax], etc. A conservative reckoning of the economic impact in 2012 was $196 million," he writes in his email. "SXSW has a somewhat unique economic impact since we don't have a fence and don't profit much at all from food or alcohol sales. SXSW happens all over the city, and one of our big priorities is to drive sales at our venues, and to local businesses in general. We fill up every hotel room in town with people from all over the world, and those people each spend a good deal of money on hotels, meals, cabs, bars, souvenirs, etc. SXSW is the biggest two weeks of the year for many local businesses."

Media is another key factor. In his pitch to bring the 2014, 2015, and 2016 ESPN X Games to the city of Austin, Circuit of the Americas President Steve Sexton cited an economic impact study about that event prepared for the city of Los Angeles. There, Sexton says, officials concluded that $20 million worth of the economic impact offered by the games came from four days of televised ESPN coverage beamed across the United States and the globe.

That works as well for South by Southwest. "[W]e had 8,000 members of the media at this past SXSW, so it's a ton of media for Austin and stories about Austin – as well as bringing tens of thousands of people to Austin each year for the first time," Spies continues. "So there's a longer-term impact as well just because Austin is such a fantastic city and when people come here, a lot of them fall in love with it."

There's another less quantifiable bonus offered by rosy media depictions of the events hosted by the city. If Richards and his colleagues go home and write about the phenomenal experience they had during SXSW or ACL or F1, the city looks more attractive to other events that might want to bring their tax dollars to Texas' capital. That logic also contributes to the financial feedback loop that Gonzales sees with special events – the more events come to Austin, the more events will come to Austin.

Nevertheless ... how much is too much?

Skating on the Edge

These days, the city's Parks and Rec­re­a­tion Department alone counts more than 160 events a year, which translates to more than 230 calendar days, according to Assist­ant Parks Director Cora Wright. These and other activities fill the city's calendar with street closures, extra duty assignments, and cleanup responsibilities. (A "Major Events" list compiled by the city lists 251 events in all, spanning the entire year.)

Many of the events benefit from the tradition of "fee waiving" – a council act that serves as a nice thank-you gift to event organizers, a sort of handy patronage opportunity that dovetails with the city's mission. Fee waivers are also one way of measuring an increase in the city's hosting duties. From the beginning of fiscal year 2012 through May 7, 2013, council members waived just over $2 million in fees to support events ranging from the annual Turkey Trot footrace to the Austin Farmers' Market. By contrast, in a period that covered the 2009, 2010, and most of 2011 fiscal years, council members waived $1.3 million.

SXSW regularly takes home the largest fee waiver, presumed to be more than compensated by the consequent income to businesses and, eventually, the city. According to figures produced during council's annual budget review, the event received more than $1 million in fee waivers – for everything from the use of Auditorium Shores to extra litter patrols (see "SXSW 2013: Fee Waivers," left) – in fiscal years 2012 and 2013. That number accounts for more than half of the waivers offered to events through May 2013.

Of course, SXSW is also the city's marquee special event. It accounts for the most calendar time, the most staff time, the most public attention, and the largest attendance. Says Don Pitts of the city's Music Division – who put in over 100 office hours during SXSW 2013: "I know that for our little office ... it requires more attention than most other events."

In late summer 2012, management consolidated representatives from most departments involved in hosting major events into one group called the Austin Center for Events. Included are the Austin Police Department, the Austin Fire Department, EMS, the Austin Transportation Depart­ment, and the city's Music Division. The city's Code Com­pliance Department and Health and Human Services Department maintain what city spokesman Kyle Carvell calls a "part-time presence" in the office. A host of other city divisions – including Resource Recovery, Parks and Recreation, Planning and Development Review, and the Convention Center – also participate in weekly meetings alongside officials from Capital Metro, the Texas Department of Public Safety, TxDOT, UT, and the Long Center. In other words, anyone who might have any kind of stake in major events.

In mid-May, officials from many of the city departments met at a roundtable discussion requested by the Chronicle to address the resource issues raised by special events. The conversation quickly took on the tenor of a city budget debate, and a clear picture emerged: Though the city may currently be able to handle the growing scope of South by Southwest, it is very near the outer edge of Austin's capacity to do so.

The starkest example of this may also be the least obvious. Marcel Eli­zondo represented the Austin Health and Human Services Depart­ment at the May meeting; his team is responsible for inspecting food establishments and signing off on the permits that allow them to operate. "Back in 2007, we were issuing permits for over 2,800 individual booths, and then in 2012 we were over 5,400," Elizondo said. "For us there are events every single weekend. I have to schedule a rolling schedule of two to three inspectors ... for South by [Southwest], it's going to be three to four inspectors every single weekend." This, says Elizondo, stresses his staff of 30 to 40 inspectors and its limited amount of available overtime. Elizondo, whose department does not have the resources to send a representative to the Austin Center for Events office at One Texas Center, said that to inspect every event, he would need "at least four to five more [inspectors]."

Frances Hargrove manages the city Transportation Department's Office of Special Events. She noted that street closures account for the bulk of costs associated with special events, and said that the city has what it currently needs along those lines.

South by Southwest does pick up the tab for a portion of city dollar costs associated with the event. But money isn't the only factor. APD Commander Bill Manno says that event coverage also forces the department to take detectives off their working cases, among other interruptions of normal police activity. "For the Police Department, the more larger events we get, it's becoming more difficult to use on-duty resources," Manno said. "When we pull detectives from their work week, and they're out working an event for a whole week, that's a week that cases aren't being investigated, victims aren't being called, sometimes video evidence is lost because they didn't inquire in time. So there's an impact not just in the overtime cost but just in the loss of productive man hours."

The Fire Department, too, appears stretched to the limit. Much like the Health and Human Services Department, AFD sends inspectors out to sign off on venue safety, capacity, and other such occupancy issues. Battalion Chief David Brietzke notes, "Every one of these venues, when it is set up, requires an inspection and a permit issued to them." That, he says, "is where the biggest strain on my department comes."

Brietzke also pointed to his department's participation in the city's Public Assembly Code Enforcement (PACE) team – the group that handles wide-ranging field enforcement. "The more events that happen, that takes away more time that I could dedicate to PACE ... that's one of the drawbacks," he said. "PACE is an important part of what we do out here, making sure that [after we issue the permit], the next day they don't come back and change everything up again."

As for service, Britzke says AFD is "at the point where we can manage what we've got going on." But, he continues, "it would be hard to take on any more without additional [staffing] resources."

Overtime Working?

With budget season in full swing, both APD brass and Austin Police Association President Wayne Vincent have used the increasing number of city special events to call for more staff. APD Chief Art Acevedo told the city's Public Safety Commission on June 3 that special events had a major impact on regular police operations. "We are taking officers who are paid for by the people of Austin to keep the neighborhood[s] safe and putting them to one specific space."

That echoed statements from Vincent, who told the same body at its April 1 meeting that special events were changing the scope of what line officers have to cover. "We're becoming one of the biggest special events venues around. And we are being stretched very, very thin," he said. "When you talk about investigators, when you talk about the entire operation of the police department, they are interrupted for all these special events now, and people are taken away from case loads ... to perform these special events basically for some promoter."

Vincent pushed commissioners to consider these duties when deciding how many officers the city truly needs. "Any consideration we make as to what is the sufficient number ... has to now start taking these special events into account," he said.

Council Member Bill Spelman – who is locked in a perpetual debate with police officials over how many officers are sufficient to the city's needs – is skeptical. "There's a whole bunch of ways of dealing with the problem of what do you do during South by [Southwest]," he offers. "You need more cops during South by [Southwest] than you've got available, so you can pay overtime – to some extent that helps. You can also use cops from Travis County ... you can establish long-term relationships with other jurisdictions that you feel comfortable with the training and the experience of. So I can imagine us importing cops from Houston if – and only if – we have established a long-term relationship with Houston or fill-in-the-blank city [and] we're comfortable there."

Comfort, says APD, is key. Officer Brian Robinson, who helps facilitate APD's relationship with the city's Special Events office, notes that any potential interlocal partnerships have to come with a uniform level of enforcement. "As this event has grown, you start to see other agencies that are outside the general Travis County area working, which really complicates the matter for communication and other [issues]," says Robinson. "Just general practices [of] the way they enforce laws. There are times when we have gotten blamed when someone did something, and [they] had 'police' [written] on a dark shirt, and they said it was Austin Police Department, and it turned out to be somebody from Burnet County."

Details aside, Spelman sees change coming. "Theoretically, there is a limit, obviously," he says. "There is a point that South by [Southwest] gets to be so big that there is no way that we can reasonably handle it."

Later, Spelman added that boundaries might need to be established. "I don't know that we've worked through a reasonable way of defining an envelope for South by [Southwest], but it seems to me that a good argument for doing so is [that] South by [Southwest] all by itself, without the additional marketers who come in to try and sell stuff, is big enough [that] if you bring any more stuff to it, that's what causes it to go over the edge."

When asked how the city might establish clear boundaries for the Festival, Spelman offered a simple answer. "We can say no," he said, referring more to individual, unsanctioned events during South by Southwest.

Getting to No

Would it be that easy? The massive growth of the major events industry, coupled with existing city infrastructure problems and the basic question of just how much more, all raise an important question made more so by the impressive economic impact numbers: Is it all sustainable?

For his part, Gonzales isn't willing to offer any predictions about whether the fiscal growth and importance of the major events revenue stream will continue. "The impact has grown from 2005 to 2010, but what the future holds – who knows?" he says.

Whether or not the dollars continue to flow, it appears that something has to give. Even South by Southwest – despite the rosy economic picture – acknowledges that infinite, expansive growth is increasingly unmanageable. Spies frames the picture with two questions. "Is there room for us to grow as an event? Creatively, yes. We are constantly looking to showcase new things, simply because there is so much amazing stuff going on in the world. We grew into Film and Multimedia [the original name for Interactive] in 1994. We are constantly growing into new venues in addition to the incredible venues we work with year after year. In the past few years we have made concerted efforts to branch out into Education, Environmental Solutions, Light­ing, Fashion, Comedy, Food ... even Space Exploration," he writes.

But then his tone takes a turn. "Can the city support the growth of the event? That is a different question entirely and a very difficult one to answer," Spies continues. "I can answer it physically by saying that we have maxed out both the available meeting room space and the available hotel room space in the city. We contracted 72 hotels in the Austin area this year, and used meeting space at 15 different Downtown venues (mostly hotels) for conference programming – in addition to using the entire Con­vention Center. The new hotels that are on the horizon will help, but not for a few years."

South by Southwest, it appears, has run out of room. But then Spies turns to the specter of the free and unofficial events that crop up each year around the main South by Southwest frenzy. For years, rumors had it that SXSW was intent on keeping unaffiliated activities to a minimum – and would call in city code com­pli­ance officials to help – and not only because of brand dilution, but also for the real risk of an unofficial event endangering participants, and SXSW getting the blame. Of late, the attitude had reportedly changed, with organizers working with the tag-alongs. Spies did not comment directly on that notion. But observers will note the broader reach of the SXSW brand, which has brought in such previously unofficial events as those hosted by Hype Machine, Vice magazine, and Filter, among others.

Still, when it comes to infrastructure, Spies sees overload. "I can also say that the city can definitely support growth of the main SXSW event, but cannot also support all of the other events that come in and piggyback on SXSW, nor the people coming in solely to attend 'free events,'" he writes. "South by [Southwest] maxes out almost all of the city infrastructure: from APD officers to fire marshals to security guards to traffic infrastructure to sound engineers and bartenders. When you add hundreds of other events to the equation – most of them free and some of them in 2,000-capacity pop-up venues that require dozens of security guards and APD officers – and a hundred thousand people coming into Austin just to go to these free events ... there's just no way."

He continues: "Up until two years ago, the city did not have the ability to deny a permit. Which is terrifying, because if SXSW is already using 95% of the city infrastructure, and then you factor in all of these other events and their needs ... well, it's 10 pounds of manure in a 5-pound bag," he wrote. "And it's not just SXSW. With all of the other major events that happen in town – ACL, F1, ROT, FFF, the Relays – the city needs to take a hard look at how they not only permit and allocate city resources for events, but how they protect the events in a competitive market."

Music Program Manager Pitts confirms that the ancillary events – the sideshows that set up shop in the wake of an official happening – can indeed strain resource limits. "Different sponsorships, different marketing and PR firms from New York and L.A., and they show up two days before ... South by [Southwest] and they claim, 'Oh I didn't know I needed [a permit]' or 'I've been doing this for five years' – I mean, just a number of things. Those, I think, are the problematic activations because you don't have any way of reaching them," he said.

Spelman notes that SXSW officials would like the pop-up events to remain outside whatever "envelope" officials draw for the festival. That goes with the idea of the city simply saying no, to limit what goes on along the fringes of events. For SXSW, Spel­man suggests that "If some scavenger marketer wants to come in and create an event, well, we're going to put you on a waiting list ... after we understand what all of the South by [Southwest] stuff is going to look like and see if there is any space for you."

Shark-Jumping Ahead?

City staff has engaged in a series of public meetings aimed at soliciting stakeholder feedback for a major rewrite of the city's special events ordinance, now being worked over. Pitts says the changes would merge the split worlds of events permitting into a streamlined process. Council Member Mike Martinez's office is at the center of that effort. "We have for so long held so many events and we are now at this point where we have signature, worldwide events. Over 70 countries were represented at South by Southwest last year alone," says Martinez. "We have decided to comprehensively create one department, one organization to handle these issues, instead of, as we traditionally have, letting each department be in charge of their areas of expertise. I really think it's going to improve the process, it's going to help us learn from issues that come up at these events."

Whatever the city does to its ordinance – or any other action it might take in the direction of special events – be certain that there is a lot at stake. Not just in terms of the economic numbers associated with Austin's role as events central, but in terms of its international reputation as the place to be. Some of this is beyond anyone's control. No one, of course, can successfully tell the masses that they shouldn't come to an event. And that's not just a practical question – at least not for Austin. Not any more; since it made itself into the place to hold a festival, the city is dependent on the economic impact that comes with those events. If we say no now, we'll have to go out and look for many millions of dollars for our economy tomorrow.

Saying no, of course, can come in many different forms. Spelman's no is a series of controlled boundaries for the biggest festival we see. Martinez's no is a promise to de-clutter a process that leads to three weeks of controlled chaos every spring.

And then there is the cultural no. That's when a critical mass of the very people the city is seeking to accommodate turns against an event; the shark-jumping factor that anyone dependent on arts dollars lives in fear of hitting.

Chris Richards and I engaged in a May email exchange that mirrored a conversation we had over breakfast tacos in March. "I've attended SXSW for the past four years – five times total in the past decade – and yes, the hordes seem to grow and grow," he wrote. But he went on to note that, from his perspective on the ground during South by Southwest Music, "it seems like the city is capable of handling even bigger crowds." Then, prompted, he offers a prediction. "SXSW won't reach that gnarly breaking point until attendees can't find places to eat, sleep, or use the loo. But I suspect it won't have to come to that point before people start turning away from it. The increasing commercial presence seems to have become a real turn-off to the acts and the attendees, and I hear more and more artists asking, 'Why are we even here?' each year. So I'd venture to say it won't be about infrastructure – it'll be about people no longer having fun."

Is there such a thing as too much fun? That's a question Austin can only hope never needs an answer.