Council to Finalize Aid Programs for COVID-Hit Businesses

Photo by David Brendan Hall

City Council meets today, Dec. 3, to take up a 75-item agenda featuring its final votes on guidelines for granting financial relief to small businesses devastated by the COVID-19 pandemic, through the city's Save Aus­tin's Vital Economic Sectors (SAVES) fund.

In the nine months since COVID came to Austin, the city has awarded about $27.2 million to businesses and individuals through seven relief programs. Only $861,000 has been awarded to 34 music venues, something that Council and staff hope to change with Thursday's adoption of guidelines for the Live Music Venue Preser­va­tion and Legacy Business Relief grant programs. Later this month, staff expects those two programs, and one for child care providers, to begin accepting applications; each fund is expected to be seeded with $5 million.

Under proposed guidelines for the Legacy Business grant, companies that have operated at a physical location in Austin for at least 20 years will be eligible for an immediate grant of $20,000 if they're facing closure within one or two months of submitting an application. Grant recipients will be required to participate in a technical assistance program aimed at paving a path toward long-term sustainability. That might include group and one-on-one coaching with an accountant or attorney, a benefit that Council directed to be included with SAVES funds.

Some businesses could also qualify for enhanced support through monthly payments of up to $40,000, not to exceed $140,000 over six months, calculated based on businesses' monthly operating expenses. The Legacy Business program is open to art galleries, bars and restaurants, live music and performance venues, or any business that has operated a physical space in the city for at least 20 years.

The Live Music Preservation Fund will operate under similar guidelines. Eligible venues include those that have been closed due to pandemic guidelines or that have operated at 75% capacity or below, and face a substantial likelihood of imminent closure. Recipients will be eligible for the same grant amounts and will also be required to participate in the technical assistance program. Applicants will need to submit a "Live Music Venue Equity Strategic Plan," which aims to reduce systemic inequities in the arts space, with special attention to "business ownership, employment, artist of color and genre development, and audience outreach and development," per a staff memo.

Neither the Live Music nor Legacy Business program has been allocated funding officially, but staff notes that funding is available in the General Fund Emergency Reserve Fund and thus will not be contingent on any federal relief. City staff are still searching for third parties to administer grants from the two relief funds.

Guidelines for the child care relief program were established in October, and staff has selected the United Way for Greater Austin to administer the child care grants. That funding is coming from Austin's share of the federal CARES Act, and United Way is expected to begin accepting applications within the next two to three weeks.

In addition to the SAVES funds, businesses may also be eligible for local relief through property tax abatements, as Council is slated to approve modifications to its existing Chapter 380 agreement program (a reference to the state tax code), typically used for economic development incentives. Under the temporary program changes, commercial property owners will be offered tax reimbursements in exchange for renegotiating long-term lease agreements with their tenants.

Under this Recovery Lease Incentives Program, property owners would need to offer at least a 50% reduction in rent for a minimum lease agreement of 14 months; in exchange, the city will reimburse their city property tax payment in full. For every additional 10% by which a property owner reduces rent payments, the duration of the 100% abatement will increase by two months, so a 100% reduction in rent would rebate two years of city taxes to the landlord at the end of the revised lease. Tenants need to demonstrate that they have suffered an annual revenue loss of at least 25%, are headquartered in Austin, and employ no more than 75 full-time workers.

Elsewhere on the agenda, Council will approve a resolution declaring official support of House Bill 84, filed by state Rep. Gina Hinojosa, D-Austin, for the upcoming 87th Texas Legislature, that seeks to overturn a statewide ban on inclusionary zoning. The resolution, and Hinojosa's bill, are mostly symbolic; there is little chance the GOP-controlled state government would let cities require developers to include income-­restricted housing in their projects. But the ban on inclusionary zoning – a common tool in other states – is often cited as a major hindrance to building new affordable housing in Texas cities, and Council has consistently supported overturning it.

Staff has withdrawn an item that would have relocated the Downtown Austin Com­munity Court to a site on Second Street in East Austin. The move was opposed by Council Member Pio Renteria and state Rep. Eddie Rodri­guez, whose districts include the area, in response to pressure from neighbors. Staff will instead look for an alternative site for the DACC, which provides services to people experiencing homelessness and has been looking for a new permanent home since 2013; it currently operates temporarily at the Terrazas Branch Library.